How Do I Maximize Supply Chain Efficiency?
Effective supply chain is to convert raw materials into parts, semi-finished products, and products at the lowest cost, and to effectively realize the supply chain based on supply at the lowest possible price. It mainly reflects the physical functions of the supply chain. Suitable for situations where demand and supply are relatively stable. [1]
Effective supply chain
- Efficient Supply Chain
- Effective supply chain is also called efficient supply chain. It is to convert raw materials into parts, semi-finished products and products at the lowest cost, and to effectively realize the supply chain management system based on supply at the lowest possible price. The demand for such products is generally predictable, and we strive to minimize inventory in all links of the supply chain and form them through efficient logistics processes.
- The purpose of an effective supply chain is to coordinate material and service flows, minimize inventory, and ultimately maximize the efficiency of manufacturers and service providers in the supply chain. This supply chain model is more suitable for demand with higher predictability and lower forecast error rate.
- Effective supply chain design is in line with competition priorities that focus on low-cost operations and on-time delivery.
- Effective supply chain design features include assembly lines, low inventory buffers, and low inventory investments.
- The effective supply chain mainly reflects the physical function of the supply chain, that is, the raw materials are converted into parts, semi-finished products and products at the lowest cost and transported in the supply chain.
- The reactive supply chain mainly reflects the market intermediary function of the supply chain, that is, distributing products to markets that meet user needs, and responding quickly to unpredictable demand.
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