Question

1. What is responsive supply chain strategy, and for what type of product fits responsive supply chain strategy?

2. what are the prerequisites of responsive supply chain strategy?

3. where do you think push-pull boundary should be located in a supply chain?

Answer 1

Answer 1.

A responsive supply chain is one of the strategies to be used by the manufacturing firms that are more sensitive to meet customer requirements. The customer demands are being changed in the last few years and they want to choose from multiple options and want them delivered as soon as possible. The responsive supply chain is the way to understand the demand and fulfill the demand on time.

The responsive supply chain is the supply chain strategy and the ability of the supply chain to respond quickly and purposefully and within the timeframe as per the customer demand.

There are two objectives of a responsive supply chain, one is to be responsive to the needs of the manufacturer, and the second is to be responsive to the needs of the customers. The responsive supply chain is so much attractive when the new product introduction is frequent and there are so many varieties of the product as it responds quickly as per the market demand.

Answer 2.

Prerequisite of a Responsive Supply Chain:

The main prerequisite of a Responsive supply chain is per below:

a. Customer Satisfaction: Customer satisfaction and customer service are some of the requirements of the Responsive supply chain. The customer wants its product as soon as possible and the company has to provide the product within the time frame requested by the customers. Many times customers order the wrong product or wrong product delivered to him and he wants to return or exchange it in the shortest period of time. A responsive supply chain could be helpful in providing the best customer service.

b. Delivery of accurate order: The customer did not like the wrong product delivered to him, it could be whatever reason but if the customer gets the wrong product then the company could lose that customer forever. Customers are ready to pay a premium price but they want to fulfill their requirements and needs properly. A responsive supply chain is the best option to provide a better quality product within the timeframe requested by the customer.

c. Scalability as per the demand:  Demand is not a fixed element and it can be high or low that depends on various factors, the brand name, season, price, competitive products. In one season the demand for the product could be high or a newly launched better quality product would have a high demand. A responsive supply chain will be dealing with the high sales volume and have the demand fulfilled with better supply chain strategies.

d. Communication process: A responsive supply chain will have better communication strategies between the manufacturer and the customers. It is the requirement of a responsive supply chain strategy.  

Answer 3.

Supply chain management is one of the requirements of any successful business. For example, Amazon and Walmart the successful companies in the world because of the best strategies for the supply chain. The supply chain is required innovation every time, no one strategy would be helpful for another organization.

Pull- Push Boundary strategy is used in the supply chain by many organizations in the world.

Pull Supply chain refers to the strategy when the manufacturing and supply chain process is driven or influenced by the demand of the customer. The supply chain methods and logistic methods are used as per customer demand. It could be high or low. This will help in reducing waste and excess inventory when there is less demand for the product. But the main disadvantage of this strategy is that when demand is high the manufacturer will face major issues in production or supply chain to fulfill the customer demand. It is a demand-driven approach.

Push Supply Chain strategies use the long term projection and historical data to analyze the demand of the product. This strategy is having more advantages where the company can project its future demand for the product and have enough and effective plans for production and supply chain to fulfill the needs of the customers. The company could have a proper strategy to have logistic plans when they know the demand in advance. It is a forecast driven approach.

There is no company in the real world that uses only Pull or only Push supply chain strategy but the mixture of both strategies would be used by the companies. A supply chain will always a combination of Pull and Push supply chain strategy and its interface between Pull base and Push base supply chain strategy that is called the Pull-Push boundary.

In this Pull-Push Boundary strategy, the raw materials or inventory level would be analyzed and determined by the forecasting and historical demand/sales volume but the final production or assembly would be started when the company has a customer order. Pull-Push Boundary is used to improving the effective and efficient use of the supply chain where it can help in analyzing and understanding the actual demand from the customers and help in offsetting uncertainty. It is helpful in determining the level of inventory in the production process and if it is required to order raw materials, from where and when should we do order.