The Traditional Supply Chain Model

2671 Words Dec 10th, 2014 11 Pages
Introduction
The purpose of report is to discuss the traditional supply chain model. The different management principles that have been implemented in other organizations to improve flow within the supply chains, the strength and weakness of each method, similarities and differences between these methods, and a final recommendation for change.

Traditional Supply Chain
Traditional supply chains are push based systems. Meaning goods are manufactured and pushed through the supply chain to the end users or customers. This push based system uses forecasting from historical data provided by the retailer to set production goals. This happens with little feedback and information from the consumer regarding any requirements or specifications that could improve the product or services provided. A basic model of this supply chain model is shown in the diagram below:

Traditional supply chain model – The Leading Edge Group participant workbook 2009

Demand in a traditional supply chain is projected though forecasting by historical data which can use exponential smoothing, moving averages, regression analysis, and trend projection. But these start with assumptions based on management judgement and experience. These assumptions can often have gaps from supply to demand that can produce shortages or overages of finished product because of longer response time to demand changes. Longer response time to demand in push based supply chains can also result the overstocking of unfinished goods,…
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