Understanding the Different Types of Supply Chain Models

Setting up and managing a global supply chain planning is a complicated process. Choosing the incorrect supply chain management consulting can expose an organisation to risks and delays, drive up costs, and even jeopardize its reputation. Thus, choosing the appropriate supply chain management services for your company's needs is a crucial responsibility.

Your company's success in terms of product and transportation costs, working capital demands, customer perception of service, lead times, and other elements that determine your competitiveness in the market are significantly affected by how you administer your global supply chain link with effective procurement and supply chain management.

Four major factors influence a company's supply chain operations model are

• The industry structure

• Your company's special selling point

• Internal methods for logistics and supply chain management

• Administration tactics

The 6 types of supply chain models are:

• The continuous flow models

• The fast-chain models

• The efficient chain models

• The custom-configured model

• The agile model

• The flexible model

The "Continuous-flow" Model

For sectors with high demand predictability, this model is perfect. A continuous-flow model's production procedures are created to produce a predictable production frequency and information flow. With a low change in the consumer demand profile, this supply chain architecture is best suited for established sectors.

Providing a continuous replenishment system that guarantees excellent service levels and low levels of inventory at clients' facilities is crucial for this model's competitive advantage.

The Fast-chain Model

This supply chain strategy works best for businesses that produce contemporary goods with brief lifecycles.

Businesses that use the fast supply chain model focus on reducing the time it takes for an idea to reach the market and increasing forecast accuracy to cut down on the expense of market intervention.

The Efficient Chain Model

The ideal sectors for an efficiency-focused supply chain model are those that operate in highly competitive marketplaces with several producers and customers. These are often mass consumer industries where pricing is essentially the only factor in competitiveness, and production is planned based on predicted sales for the duration of the production cycle.

The primary goal of the efficient supply chain model is to emphasise increasing end-to-end efficiency, including high rates of leverage, in an effort to reduce costs.

The Custom-configured Model

The assembling and production processes require special setups for the custom-configured model. It combines agile and continuous flow approaches with the need that the created product must operate end-to-end with possible additional modification.

The Agile Model

The agile supply chain model is ideal for businesses producing goods to meet client specifications. This strategy is primarily employed in sectors where demand is erratic. The concept employs a make-to-order decoupling mechanism, which entails producing an item after receiving purchase orders from clients.

The Flexible Model

The firms that exhibit strong demand surges followed by prolonged duration of low demand are best suited for this supply chain paradigm. This model has a high degree of versatility, with the capacity to change internal production procedures to satisfy particular client requirements or address customer issues.

Conclusion

Understanding which supply chain model best fits your company is crucial since supply networks are elaborate systems with best practices that fluctuate from industry to industry. Many firms prefer the features of the 6 distribution models in the supply chain for their supply chain solutions. However, creating parallel supply chain services inside the same company makes more sense, with each model centered on solving a certain market need or expertise.