Designing Effective Supply Chains in Strategic Alignment with Demand Characteristics and Market Requirements
By Mojtaba Mahdavi, University of Auckland, New Zealand, m.mahdavi@auckland.ac.nz | Tava Lennon Olsen, University of Auckland, New Zealand, t.olsen@auckland.ac.nz
Abstract
A key challenge in operations management is how to effectively design a supply chain structure that is in alignment with the company’s business model. The supply chain management literature provides a number of techniques and guidelines for developing effective supply chain strategies. Fisher’s (1997) famous article profoundly influenced the literature by suggesting a framework which matches product type (i.e., functional or innovative) with supply chain strategy (i.e., efficient or responsive). This taxonomy initiated a large number of studies in product-driven supply chain strategy. While reviewing the studies, we found that the extent to which they empirically support the framework is very different and contradicting in some cases. Also, there is little modeling work that directly contributes to this area. This monograph describes the state of the literature in supply chain strategy and, in particular, how to best match supply chain strategy with product type. It takes a careful look at Fisher’s (1997) canonical framework and describes the studies that have been done to model and/or validate this framework. Moreover, an analytical exploration of the framework is conducted in two steps. First, we examine what two key existing inventory models, namely the newsvendor model and a continuous review system, say with respect to the framework. Second, we develop a basic inventory model to explore the impact of additional factors, i.e., product life cycle, obsolescence, and lead time, on supply chain strategy decisions. This monograph also describes research on general product-driven strategies, i.e., lean, agile, and leagile supply chains, mass customization, and postponement.
Designing Effective Supply Chains in Strategic Alignment with Demand Characteristics and Market Requirements
Designing Effective Supply Chains in Strategic Alignment with Demand Characteristics and Market Requirements examines supply chain management from a strategic point of view. It aims to provide a holistic exploration of existing supply chain strategies with most of its emphasis on product-driven strategies, and Fisher’s framework in particular. The authors explore the literature regarding the framework to present a picture of how it has been considered by researchers, and how it can best develop/improve. Due to the strategic role of inventories in supply chain management, the authors also analyze the framework from a mathematical view to investigate the extent to which it conforms to two existing inventory models, namely, the newsvendor model and the continuous review model, and to see how different product characteristics affect supply chain decisions. Furthermore, other product-driven supply chain strategies, such as leanness, agility, leagility, mass customization, and postponement, are reviewed.
