HOW TO APPLY THE RIGHT SUPPLY CHAIN STRATEGIES WITH PRODUCT UNCERTAINTIES ?

a.Why Should We Align Supply Chain Strategy?

b.Supply Chain Strategies in the Information Era

c.Setting Up a Right Supply Chain Strategy to Match Product Uncertainty

Products which have different characteristics may face different demand and supply uncertainties.So , how can we identify?The Uncertainty Framework

How to reduce uncertainties?

a.Demand uncertainty reduction strategies Sharing demand information and synchronized planning across the supply chain with the internet Cases: Barilla & Nabisco and Wegmans

b.Supply uncertainty reduction strategies 1. Free exchanges of information along with product life cycle 2.Early design collaboration Cases: The Micro-Compact Car 3. Supplier hubs Cases: Fritz

a. Efficient Supply Chains (Cutting costs as much as possible)Maximizing cost efficiencies on cross transmission of information in the supply chain by refusing non-value added actions, reaching a scale economy, and using optimization techniques, etc. b. Risk-Hedging Supply ChainsPooling and sharing resources in a supply chain to diversify risks in supply disruption.

c. Responsive Supply ChainsBeing responsive and flexible to the changing and diverse needs of consumersBuild-to-order and mass customization models

d. Agile Supply ChainsA combination of responsive to consumer needs and risk diversification

a. Functional products with stable supply processesFor products which have both low demand and supply uncertainties, efficiency is the only competitive advantage and costs and information coordination are two elements of efficiency.

b. Functional products with evolving supply processesThose products which have low demand uncertainty but a high supply uncertainty, represent a high risks in supply chain, so a Risk-hedging supply chain can contribute to reduce the risks.

c. Innovative products with stable supply processesWith a highly unpredictable demand and short product life cycle, excessive inventory can cause a significant storage cost.

d. Innovative products with evolving supply processesProducts with both high demand and supply uncertainties should reduce the uncertainties from two sides. The Agile supply chains are the best choice!

References:a. Hau L. Lee, California Management Review, VOL.44, NO.3,

Spring 2002b. Google images