Unit – II

Types of supply chains:

The six common models are:
 Continuous flow
 Fast chain
 Efficient chain
 Agile
 Custom-configured
 Flexible
An important distinction to make is that each model will focus on achieving one of two larger
ideal goals:
Efficiency
Responsiveness
The reality is that each type of supply chain management philosophy includes
elements of both efficiency and responsiveness. And that makes sense if you think about it. If
your supply chain is extremely efficient, it won’t be able to respond to disruption. On the
other hand, if the supply chain does nothing but respond to individual or small requests, it
won’t be very efficient at turning out much volume.
The Continuous Flow Model
The continuous flow model is built around efficiency. It offers stability in high-
volume environments. This classic model is best suited for manufacturers who produce the
same product repeatedly, with little design fluctuation or alteration.
This model is ideal for commodity manufacturing. Its high level of efficiency is
reflected in low product prices. For manufacturers, margins are based on raw material prices.
That sounds like science to me.
The Fast Chain Model
The fast chain model is built for responsiveness. It’s ideal for manufacturers who
change their product line frequently. This model is the best suited for trendy products with
short life spans. In this example, the manufacturer that can flood the market before the trend
cycle ends is the manufacturer that wins.
This model emphasizes the competitive advantage of the first adopter. But the true
driver of the fast chain is the designer—and the marketing department. Put another way, if
you can create your own trend, you’ll be the first to market. In short, this model is driven by
art.
The Efficient Chain Model
 The efficient chain model is for hypercompetitive industries where end-to-end
efficiency is the ultimate goal. This model relies heavily on production forecasting in order to
properly burden and sweat machinery assets.
The efficient model also relies heavily on commodity and raw material prices. In the
post-pandemic world, efficient chains are struggling with capacity issues. Drivers for this are
labor shortages, material shortages, and delays.
The Agile Model
The agile model is ideal for manufacturers that deal in specialty items. This model is
finely tuned for small batches of product. That requires less automation and more expertise.
And that additional value-add in turn allows businesses using this model to command higher
prices.
Agile-model businesses can ramp up volume. But past a certain volume threshold,
they typically prove uncompetitive. Compared with efficient-chain-model businesses, at
higher volumes agile businesses get blown out of the water from a pricing standpoint.
The Custom-Configured Model
The custom-configuration model focuses on providing custom setups during
production and assembly. Most often, this setup time occurs at the beginning of a lengthier
production and assembly run process. For example, certain prototype or limited-production
builds fall into custom-configured manufacturing.
This is a higher-touch model that can include quicker turnaround times and small
batches of products. In essence, the custom-configuration model is combination of the agile
and continuous flow models.
The Flexible Model
The flexible model tries to be the best of all worlds. It can react to high volume
demands during a peak season. On the other hand, flexible model businesses can manage and
absorb stretches.
To pull off the flexible supply chain model, a business requires the right tool for the
job. This model also requires a broad supplier network or personnel who have a broad
knowledge base.

Advanced planning and Structure of advanced planning:

Advanced planning systems are computer supported planning systems that put
forward various functions of supply chain management, including procurement, production,
distribution and sales, at the strategic, tactical and operational planning level.
These systems stand for a quantitative model-driven perspective on the use of IT in
supporting Supply Chain Management, for exploiting advanced analysis and supply chain
optimization methods.
 In terms of APS architecture, according to Meyr&Stadtler (2004), a typical system is
organized though combinations of a set of building blocks encompassing decisions at three
levels: strategic (long-term decisions), tactical (mid-term decisions), and operational (short-
term decisions levels). In more specific terms, some typical building blocks are suggested by
Meyr&Stadtler(2004):
Strategic network planning: long-term planning normally dedicated to plant allocations and
to designing the physical distribution network. In addition, other strategic decisions related to
market strategies can be supported, such as determining which products to position in certain
markets.
Demand planning: represents sales forecast for long, medium and short terms, based on a set
of quantitative and qualitative approaches. This results in expected demand, which acts as an
input for several other building blocks.
Demand fulfilment & ATP (available-to-promise): an interface for the customers in which
orders are tracked from order entry to delivery. It includes order promising, due dates settings
and shortage planning.
Master planning: aims to balance demand and capacity over a medium-term planning
interval, coordinating procurement, production and distribution.
Production planning and scheduling: while master planning coordinates the planning
activities between sites, production planning and scheduling is done within each site.
Production planning is dedicated to lot-sizing, and scheduling is dedicated to two planning
tasks, machine sequencing and shop floor control.
Distribution planning: deals with materials flows in a more detailed manner than master
planning, taking care of transport of goods directly to customers or via warehouses and cross-
docking.
Transport planning: aims to sequence customer locations on a vehicle’s trip though vehicle
routing.
Purchasing & material requirement planning: a step further compared to traditional bill-
of-material explosion and ordering of materials done by an ERP. It performs advanced
purchase planning using alternative suppliers, quantity discount and lower/upper quantity
analysis.

Strategic network planning:

Strategic networking is about enlisting the support of people who can help you to
achieve your strategic business goals. Essentially, it refers to the practice in transport logistics
of strategically mapping out transport networks (i.e. hubs, warehouses, trucks, routes, yards,
containers, delivery points, and everything else that goes into operational transport plans) and
adjusting them to align more effectively with specific business.

Coordination in supply chain management:

 Supply chain coordination (SCC) is an effective approach to improve supply chain
(SC) performance.
 The coordination can be achieved when interdependent entities work together by
sharing resources and information to achieve common objectives aligned to
maximise customer value for the entire SC.
 There are a number of mechanisms by which the SC members can coordinate, e.g.
contracts, information sharing, information technology and collaborative
initiatives.
 To communicate frequently and effectively, the partners are required to have good
information systems and capability to share information.
 To coordinate with each other the SC members are required to have capabilities to
implement coordination mechanisms effectively.
Integration in supply chain management:

Supply chain integration is a process where all the parties involved with the fulfillment
of a product are integrated into a single system. This requires significant coordination and
alignment in order to ensure everyone is effectively working toward the same goal at all
times.

Having the parts required for a product show up where they are needed, when they are
needed, helps to not only prevent delays in the manufacturing process, but also eliminates a
lot of wasted time, storage space, and more. When done properly, supply chain integration
will bring parties that are often at odds together with a single focus.

All of the materials and components from along the supply chain are needed, and by
integrating everything into a single system, it is much easier for effective product creation.
Collaborative planning:
Collaborative planning is a set of practices in which trading partners plan key supply
chain activities to efficiently meet customer demand at the lowest possible cost. The model is
broadly organized into four quadrants comprised of

 Strategy & Planning,

 Demand & Supply Management,
 Execution and
 Analysis.