Question

Discuss effective means for coping with huge variability of consumer demand in a supply chain.

Answer 1

Answer: When the demand in the supply chain is highly volatile then the companies need to develop a proactive approach towards the management of the supply chain. The companies should develop a proactive strategy for management of supply chain and redesign its strategies instead of using strategies like buffering. The companies need to actively keep track of the consumer demand and maintain their stock accordingly. The companies in such situations should not just rely on their internal capabilities but they should also focus collaborating with the external parties for catering to the demands of the customers. They need to form strategic partnerships in order to deal with the changing demands of their customers. The companies also need to look into the power structures that are present in the supply chain and make them flexible in order to develop flexibility in the supply chain. The companies should not just rely on the traditional strategies like buffering of inventories for management of volatile customer demand but should develop new innovative proactive approaches and flexibility in their supply chain.