Unit-2 Supply Chain Structure

Factors affecting Supply Chain Structure

• Uncertainty Aspects
• Information technology
• Communication tools
• Planning tools
• Relationship with suppliers
• Relationships with customers
• Value added process
 Efficient (Supply-to-stock)
• A supply to stock is one where the supply
channel is set for maximum efficiency.
• That is, inventories are used to achieve good
economies by allowing economical production
runs, purchasing quantity, batch order
processing and transporting in large shipments.
• Demand usually met from inventories, but
careful control holds inventory levels to a
minimum.
 Responsiveness (Supply-to-order)
• A supply to order one where the supply
channel is set up for maximum responsiveness.
• The channel features are excess capacity,
quick changeovers, short lead times, flexible
processing, premium transportation, and single
order processing.
 Supply
Chain Type Channel Design Characteristics

Efficient Economical Production runs

Supply Chain Finished goods inventories
(Supply-to- Economic buy quantities
stock)
Large Shipment sizes
Batch order processing

Responsive Quick Changeovers

supply chain Short lead times
(Supply-to- Flexible processing
order)
Premium transportation
Single order processing
 Selecting the Right Supply Chain Strategy
Functional Innovative
Products-- Products--
Predictable Unpredictable
demand demand
Low
margin
Efficient Staple food
supply chain products

Electronic
Responsive equipment
supply chain
High
margin
 Push-Based Supply Chain
• A push-model supply chain is one where
projected demand determines what enters the
process
• Manufacturer demand forecasts based on orders
received from the retailer’s warehouses
• Under a push system, companies have
predictability in their supply chains since they
know what will come when – long before it
actually arrives
• In push systems, work release is based on
downstream demand forecasts.
• Keeps inventory to meet actual demand
 Pull-based supply chain
• A pull strategy is related to the just-in-time
school of inventory management that minimizes
stock on hand, focusing on last-deliveries.
• Under these strategies, product enter the supply
chain when consumer demand justifies
• One example of an industry that operates under
this strategy is a direct computer seller that waits
until it receives an order to actually build a
custom computer for the consumer.
 Commodity centric supply chain

• Commodity chains cover a range of steps from

the primary producer to the final producer,
through collection, primary processing,
wholesale, export and import, further
processing or packaging and retail.
 Supply chain for emergencies
• In order to make the affected areas receive urgent relief service
timely accurately after disasters, the effective operation of
emergency logistics and quick response to the urgent demands in
the affected areas is very critical.
• Some of the critical points in the supply chain emergencies are:
• The urgent relief services are very diverse and urgent
• The accurate and real-time urgent relief demand information is
almost inaccessible
• The benefits of emergency logistics operation are always weakened
• Government and the market participate in the emergency logistics
service together