Aligning Product Strategy to Supply Chain Practices
Read this article. The authors study whether organizational products are aligned with optimal supply chain types. Besides the product, what other aspects must be analyzed when selecting a specific type of supply chain?
Conclusion
What has emerged from the research conducted is that a
significant gap (of supply chain alignment) exists between the creative
and innovative products produced by craft businesses in Gauteng and a
correspondingly creative and appropriate SCM strategy. A number of craft
businesses simply 'grew beyond their boots' and struggled to match
their successful product strategies with their 'not-so-successful' SCM
strategies. This lack of supply chain alignment became even more acute
as the craft businesses grew and required an even greater number of
products to be distributed or sold through outbound channels of
distribution (once successfully produced). Certain craft businesses
interviewed even revealed inbound supply chain weaknesses where the
volume of raw materials, and speedy access to their raw materials
required for production, did not match the actual production targets.
Simply put, they often lacked the appropriate levels of raw materials
needed to make an ever-expanding repertoire of popular products
produced.
Some of the producers in the craft industry copy
products from competitors. As a result, the majority of products are
similar with little differentiation. Those producers who have unique
designs have greater competitive advantages over those who do not. They
are able to differentiate themselves from competitors and to attract
those customers that look for something different in the market in order
to satisfy their individual and unique needs.
In terms of supply
chain and logistics efficiency of the small craft businesses
interviewed, it was discovered that they had very poorly defined and
coordinated logistics systems in general and could either not afford or
utilise transport and storage optimally. The researchers also conclude
that these businesses could easily have made significant savings by
managing their inventory and by forecasting more effectively, by
transporting products more cost-efficiently using longer-term agreements
with either one or fewer suppliers, by optimising inbound supplies in
terms of planning and quantities required, as well as by optimising the
outbound movement of products to international customers.