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Responsive Supply Chain


Source: Procurement Glossary
Author: Paul Rogers
Institute: CIPS - UK

Courtesy of


 

A responsive supply chain is one that is sensitive to meeting customer requirements.  For example, an online computer hardware assembler may update their product range every 90 days, when the new models, which may have increased performance, will be at lower prices than the models they replaced.

If the supply chain included component suppliers who produced six months’ inventory in one production run, this would be chronically inefficient. Inventory levels would be many times what was needed, and the stock on hand would be obsolescent, or obsolete, leading to discounting and waste.  What is needed instead is small lot manufacturing, minimal inventory, and a quality system that is focused on aligning the technology road map of the supply chain participants.  The computer assembler would share their 90-day promotional cycle, and the supply chain participants would align their research, design and production processes around the rhythm of the whole supply chain, to create a more customer responsive supply chain.  See also Agility, Bullwhip Effect, Obsolescence and Supply Chain.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




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