6 Different Types of Supply Chain Models

Supply chain management is important to every business. It is generally divided into six different models. These models rely on the main components of the supply chain. Understanding the differences in each can help to determine which method is the best model for your particular business. These supply chain models are primarily focused on efficiency and responsiveness.

The Types of Supply Chain Models

The Continuous Flow Model

The continuous flow model is a traditional supply chain model. This model is best for both commodity and manufacturing companies that produce the same goods constantly. The continuous flow model works best in big industries. This model objective is to offer a replenishment system that ensures that low inventory is kept on-site for end customers.

The Agile Model

The agile model is best suited for businesses that deal in order items. This model gives the flexibility to manage supply chain components. It’s mostly used by companies with unpredictable demand. This model allows for the manufacturing of goods after receiving the order from a customer. This model works best for large orders and to complete the smallest purchase orders in batches.

The Efficient Chain Model

The efficient chain model is best for businesses that are in very competitive markets. This model is usually good for commodity-based businesses where production is based on expected sales. Where the length of the production cycle is based on price. The key objective of this supply chain model is often met by high rates of asset utilization in order to lower costs.

The Fast Chain Model

The fast chain model is used by manufacturing firms that manufacture finished products and deal with trendy products. This model is best for businesses that change their products frequently and get them to market quickly. Buyers of these types of products are concerned with how quickly a business updates its product range to keep up with the latest fashion trends. The main goal of this model is to maximize the level of inventory forecast accuracy to reduce market mediation costs.

The Flexible Model

The flexible supply chain model is best for businesses that have an extremely high demand for their goods. The objective of this model is to provide high levels of adaptability and capability to meet customer needs easily. The product-based firms that manufacture seasonal items benefit the most from this flexible model.

The Custom Configured Model

The custom-configured supply chain model allows for custom configurations during assembly and production. It is the combination of the agile and continuous flow models. And it is ideal to use in industries where multiple product configurations are required.

This model allows for a high degree of custom configuration in processes where the product is built before configuration. The agile model is best suited for downstream processes that look for certain customizable options, such as different hardware or styles.

In the End

It may be difficult to determine which supply chain model is best to use in a particular business due to the similarities. However, the variance in methods allows using a particular model in a particular industry. After determining the demand of customers, customization and configuration need for the product, you can select a supply chain model that best fits your business.