meet its customers\' needs. Therefore, a responsive supply chain strategy is bes
ID: 343132 • Letter: M
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meet its customers' needs. Therefore, a responsive supply chain strategy is best suited to meet the needs of Dell's targeted customers. Now, consider a pasta manufacturer such as Barilla. Pasta is a product with relatively stable customer demand, giving it a low implied demand uncertainty. Supply is also quite predictable. Barilla could design a highly responsive supply chain in which pasta is custom made in very small batches in response to customer orders and shipped via a rapid trans portation mode such as FedEx. This choice would obviously make the pasta prohibitively expensive, resulting in a loss of customers. Barilla, therefore, is in a much better position if it designs a more efficient supply chain with a focus on cost reduction. From the preceding discussion, it follows that increasing implied uncertainty from customers and supply sources is best served by increasing responsiveness from the sup- ply chain. This relationship is represented by the "zone of strategicfit" illustrated in Figure 2-5. For a high level of performance, companies should move their competitive strategy (and resulting implied uncertainty) and supply chain strategy (and resulting responsiveness) toward the zone of strategic fit. The first step in achieving strategic fit is to assign roles to different stages of the supply chain that ensure the appropriate level of responsiveness. It is important to understand that the desired level of responsiveness required across the supply chain may be attained by assigning different levels of responsiveness and efficiency to each stage of the supply chain as illustrated by the following examples. IKEA is a Swedish furniture retailer with large stores in more than 20 countries. IKEA has targeted customers who want stylish furniture at a reasonable cost. The com pany limits the variety of styles that it sells. The large scale of each store and the limited IKEA stocks all styles in inventory and serves customers from stock. Thus, it uses inventory to absorb all the uncertainty faced by the supply chain.The presence of inventory at IKEA variety of furniture decrease the implied uncertainty faced by the supply chain Responsive Supply Chain Responsiveness Spectrum Efficient Certain SupplyCernd Spectr Demand Uncertain i FIGURE 2-5 Implied UncertaintyDemand inding the Zone of Strategic Fit- pectrumExplanation / Answer
Green distribution strategy is one of the evolving fields in the supply chain management. It is based on the principle of minimum utilization of resources whereas impacting the output to its fullest. The supply chain strategy followed by H&M is based on the fact that utilized minimum SKUs and variety of apparels while having a fixed turnaround time. This leads to stability in the supply chain strategy of the organziation. The leakages in the supply chain process or operation is reduced due to the considerable amount of predictability in the entire operations of the organziation. All these factors put together leads to a green distribution strategy for H&M so that it can utilize its resources to the fullest.
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