Supply chain management based on stages


supply chain development stagesSupply chain management is not static. A company's supply chain changes as it develops and the firm grows around it. Supply chain expert Nyasha Chizu recently wrote for NewsDay that logistics programs can be organized into four rough groups based on their complexity and effectiveness.

He focused on the differing opportunities that each level presents, with new strategies, technologies and focuses coming to prominence as firms spread out due to their geographic locations and capabilities.

Development in stages

The least established of Chizu's supply chain stages is "developing." Companies in this group are small firms, faced with both low demand for their products and scant ability to produce. These young companies, he stated, should take the opportunity to make strong partnerships with other companies and gather information on the state of the market. Building up capacity to serve the customer should be the primary focus of these organizations. B2B integration could help small companies make their partnerships work.

If a company's supply and demand are the same, but not as low as a developing firm's, Chizu would deem them "steady." These organizations have a fairly stable place in the market, with no immediate needs to address. Chizu stated that their best chance to improve operations is through internal improvement, building efficiency from within. Heavily automated systems, such as new warehouse management options, could be ideal tools to make companies agile.

Chizu's final two types of supply chain are defined by their imbalances. "Growth" supply chains have more demand for their products than they can fulfill. Their best chance to grow lies in improving their delivery and customer service arms, helping their products make it to the eager customer base as quickly as possible. "Mature" supply chains have more product than demand and, according to Chizu, can collaborate closely with their allies to make sure that they are reaching as many markets and potential customers as possible, offering a wide range of products.

Seeing opportunity

Executives seeing supply chain procedures as a chance to build up strong company processes is a good sign, but, according to Retail Week, not always the case. The source stated that many retailers see intense challenges in making their supply chains into effective organs of the company, rather than the great possibilities if they succeed. The source found that board members at companies are largely hesitant to enlarge the role of logistics departments and officials as they are mostly aware of the disruptions that could come from poor supply chain management.