What are the 6 types of supply chain management?
The logistic business, entrepreneurs, and analysts would start their involvement in the logistic industries by covering the basics of the supply chain models.
Understanding the supply chain models is really a great start for all of the professionals in the logistic niche. It will give you a fundamental understanding of the principles since you are going to get involved in business for many years in the future.
In the modern world, the supply chain is a crucial component for every business. The comprehensive awareness of its role and models can be an important key to the success of any business.
The logistic experts and professionals recommend six categories that build a solid and effective supply chain management. But some experts might argue that there are only four categories of models. On this occasion, we are going to dissect the 6 models of the latter topic.
The Six Types of Supply Chain Management
Before going further into the six categories that we’d promised before, it is important to understand the real definition of the supply chain itself.
There are various definitions proposed by the experts out there. But in a nutshell, it is about the procedure or set of standards that governs the products moving from the manufacturers to the markets.
The parties who are joining the supply chain are people, transportation, equipment, and technology. Those are the most important parties to move the supplies from one point to another.
No matter what industry your business has been working in, it must have a supply chain.
The simplest way to understand this is to take a look at the “product” journey itself. So, it would work like this:
Back then, the phases above could take forever because of various challenges, such as communications, regulations, geo-politics, demographics, and so on. But nowadays, with the help of technology, supply and logistics can work faster and more efficiently.
We shouldn’t neglect the existence of supplies and logistics because those are the main components of every business on earth. However, if it is not used properly, it could lead to pitfalls.
Currently, there are at least six models of supply chains that are adopted by a wide array of industries. There have been many debates about which model is the best. But the answer leads back to the basic: there is no one-size-fits-for-all solution. Each business might be suitable for a particular model that is not feasible for other businesses.
For instance, one model benefits from efficiency. Meanwhile, the other focuses on responsiveness. Each supply chain model has its own objectives and features to take a look at. That’s why it is always advisable for all entrepreneurs and business owners to get familiar with each model before deciding which one to use for their business practices.
Business needs are the root factor in choosing the supply chain model objectively. After all, the solution should be the best for the particular business.
But, what factors? We have asked Agistic experts about this. And here are the most important driving factors in choosing the model for the business supply chain:
The SOP or framework of the industry
The role of business in the market
There are many factors that could help you narrow down the choices of the models. However, the four factors mentioned above turned out to be the most significant by far.
The continuous flow models
By keeping a steady flow of supplies, a stable supply with little volatility is maintained during times of high demand. Continuous flow methods benefit manufacturers who produce the same items on a regular basis. It is highly important for markets to focus on the primary needs of customers. For instance, staple foods, raw materials, etc.
Because of its conventional architecture, this supply chain model is suitable for commodity production.
If your business is related to commodities, you could consider this particular model.
The fast chain models
The fast-chain model is perfect for makers of fashionable, fleeting goods. If your company’s inventory is constantly changing, an e-catalog is ideal since it accelerates the process of getting products out before the craze wears off. This is a multifunctional tool.
The efficient chain models
The efficient chain model is optimum in highly competitive markets. The highly competitive markets have been challenging for local and national businesses. If the owners do not take an aggressive approach, it would be hard to compete in the global market. Using a high amount of capital is not the only solution. Using an efficient chain model, one can save on operational costs.
The custom-configured model
For customized models, unique settings are unavoidable. These are maintained during the assembling and manufacturing.
It is a hybrid of agile and continuous delivery. Perhaps this model is still a bit challenging for a conservative group of industries. But for those who are ready for a change, it is worth trying.
The agile model
The agile method is an effective supply chain management technique for businesses that deal with custom-ordered products. It focuses on the supply chain’s capacity to ramp up fast when needed while remaining stable when not. Ones will need to use this model to take quick action to meet the specific requirements of their clients and market.
The flexible model
Because of the method’s adaptability, businesses may respond to major increases in demand while also weathering long periods of low demand. It’s simple to turn on and very straightforward to turn off. The flexible model has tons of room for improvement. This model can work both for old-fashioned industries and for newcomers. As we know, starting from early 2020, there have been a lot of new industries that have transformed digitally. The flexible model might be the best choice for new businesses or existing businesses that need more agile and effective supply chain management. All in all, this model opens up any possibilities to the most extreme level.