Supply Chain Management
3-1
Part 3
Drivers of Supply Chain Performance
Efficient VS Responsive Supply Chain
3-2
•An efficient supply chain strives to do more with less.
(Large-scale facilities, longer production lead times,
and larger batch sizes that allow the efficient firm to
produce at a low unit cost).
•A responsive supply chain is more flexible and
operates with the ability to change and adapt to
changes in the surrounding environment. (Small-scale
facilities, short production leadtimes, and small batch
sizes that allow the responsive firm to adapt quickly
to market demand).
Efficient VS Responsive Supply Chain
3-3
Drivers of Supply Chain Performance
3-4
•A company’s supply chain should achieve the balance
between responsiveness and efficiency that best
supports the company’s competitive strategy.
•A supply chain’s performance in terms of
responsiveness and efficiency is based on the
interaction between the following logistical and
cross-functional drivers of supply chain
performance: facilities, inventory, transportation,
information, sourcing, and pricing.
Facilities
3-5
•Facilities are the actual physical locations in the
supply chain network where product is stored,
assembled, or fabricated.
•Flexibility, location and capacity are the main
components of facilities decisions.
•Remember Toyota strategy.
