How Supply-Chain Decisions Impact Strategy

How Supply-Chain Decisions Impact Strategy - 1 How...

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Unformatted text preview: 1 How Supply-Chain Decisions Impact Strategy Low-Cost Strategy Response Strategy Differentiation Strategy Process Charact- eristics Maintain high average utilization Invest in excess capacity and flexible processes Modular processes that lend themselves to mass customization Inventory Charact- eristics Minimize inventory throughout the chain to hold down cost Develop responsive system with buffer stocks positioned to ensure supply Minimize inventory in the chain to avoid obsolescence Table 11.1 2 How Supply-Chain Decisions Impact Strategy Low-Cost Strategy Response Strategy Differentiation Strategy Lead-Time Charact- eristics Shorten lead time as long as it does not increase costs Invest aggressively to reduce production lead time Invest aggressively to reduce development lead time Product-Design Charact- eristics Maximize performance and minimize costs Use product designs that lead to low setup time and rapid production ramp-up Use modular design to postpone product differentiation as long as possible Table 11.1 3...
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How Supply-Chain Decisions Impact Strategy - 1 How...

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