Article Review- What Is the Right Supply Chain for Your Product?

1173 Words Jul 5th, 2011 5 Pages
Article Review- What is the right supply chain for your product? by Marshall L. Fisher

What is the right supply chain for your product ? is the question asked by Marshall L. Fisher in his article titled, “What is the Right Supply Chain for Your Product ?” published in March-April 1997 issue of the Harvard Business Review. Author raises the question stating the fact that new ideas and technology implemented haven’t lead to improved performance. Performance has not become better but rather in at least some cases, has worsened due to costs rocketing to unprecedented levels.

Based upon his ten years research on supply chain issues in diverse industries such as food, fashion, apparel and automobiles he devises a framework which will
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These products usually depend on current fashion and life-style and tend to generate supply headaches because of the uncertain market reaction.

Mr. Fischer states that although the distinctions between functional and innovative products are obvious, the fact that some products which are physically the same can be either functional or innovative, is the reason why many companies find it difficult to understand the exact nature of their product. Therefore to optimize the performance of your supply chain, the first thing you have to do, is to think carefully and decide in which category your product belongs.

The author continues to describe the ideal strategy for Supply Chains. According to him there are two types of supply chains: efficient and responsive. Efficient chains are applied to functional products and responsive to innovative. Also a supply chain performs two different functions: physical function and market mediation function. Each of these two functions incurs costs. Physical costs are those of production, transportation and inventory storage. Market mediation costs arise when supplies do not match with the demand.

Predictable demand of functional products makes physical costs much more crucial than market mediation costs. Stable production rate allows the companies to employ MRP software which organizes and supervises the ordering, production and delivery of supplies. As