The three responsive supply chain models are the agile model, the flexible model, and the custom-configured model. These models are ideal for “on demand” situations. They are ideal when there is a level of uncertainty in the manufacturing of the product. The continuous flow model is based on efficiency.
Offers stability in high-volume environments. This classic model is best suited for manufacturers who produce the same product repeatedly, with few fluctuations or alterations in design. The fast chain model is designed for responsiveness. Ideal for manufacturers who change their product line frequently.
This model is best suited for modern products with a short lifespan. In this example, the manufacturer that can flood the market before the end of the trend cycle is the manufacturer that wins. This model emphasizes the competitive advantage of the first adopter. But the real drivers of the fast chain are the designer and the marketing department.
In other words, if you can create your own trend, you'll be the first to market. In short, this model is driven by art. The efficient chain model is for hypercompetitive industries in which efficiency from start to finish is the ultimate goal. This model is largely based on production forecasts to properly load and increase machinery assets.
The efficient model also depends largely on the prices of commodities and raw materials. In the post-pandemic world, efficient chains have capacity problems. The factors that drive it are labor shortages, material shortages and delays. The agile model is ideal for manufacturers who trade in special items.
This model is perfectly adjusted for small batches of product. That requires less automation and more experience. And that added value, in turn, allows companies that use this model to obtain higher prices. Companies with agile models can increase volume.
However, beyond a certain volume threshold, they tend to be uncompetitive. Compared to companies with efficient chain models, with higher volumes, agile companies are impressed from the price point of view. The custom configuration model focuses on providing customized configurations during production and assembly. Most of the time, this setup time occurs at the beginning of a longer production and assembly process.
For example, certain prototypes or limited production versions enter into custom-configured manufacturing. This is a more sensitive model that may include faster delivery times and smaller batches of products. In essence, the custom configuration model is a combination of continuous flow and agile models. The flexible model tries to be the best of all worlds.
Can react to high volume demands during peak season. On the other hand, flexible model companies can manage and absorb segments of low or no demand. This model is like a light switch. Turn it on or off as needed.
To implement the flexible supply chain model, a company needs the right tool (or automated machinery) for the job. This model also requires an extensive network of suppliers or staff who have an extensive knowledge base. The flexible model gives companies the freedom to meet high peaks in demand and manage long periods of low-volume workload. The production can be easily turned on and off.
As the name suggests, the main purpose of this model is to provide customized configurations, especially for assembly and production processes. It is a hybrid combination of the agile model and the continuous flow model. Let's understand this with the example of a car manufacturing process. Generally, processes involving intricate subsets, such as assembling gears in a transmission box, are complicated and time consuming due to the intricate interconnection of small parts.
However, connecting these multiple subsets to a final product is as easy as connecting and using. For example, connecting an assembled gearbox to the car's transmission. As simple as that, in cases where the final assembly is simpler compared to the initial assembly and other subsequent processes, the final assembly is managed according to an efficient supply chain or a continuous flow model. The intricate subassembly configurations and subsequent processes then work in an agile model.
A leader in sportswear fashion, Nike frequently establishes delivery systems for new supplies and information to create and then sell new shoes and other garments before the time of that particular trend passes. Let's say, for example, that XYZ Furniture makes high-end furniture and that a supplier provides metal handles and other accessories. A good example of this model is a manufacturer that produces products for different industries, but its supply chain is flexible enough to quickly change the raw materials and other supplies needed to meet the customized requirements of a specific customer. Staples expects high demand during the back-to-school season and supplies its stores with excess notebooks, paper, pens, pencils, rulers and other school supplies.
This model is well suited to markets flooded with similarly manufactured products, sold to the same type of consumers, and the value proposition is speed and cost reduction. That said, the reality is that every type of supply chain management philosophy includes elements of efficiency and responsiveness. To properly manage and protect supply chains, you need to know these six supply chain models to choose the type that best suits your organization's operations. .