Supply chain models are the heart of the global economy as well as any shipper’s business plan. In selecting the best supply chain model to meet the fluctuating demand of a modern market, it’s essential to consider the function and benefits of each supply chain model.
Steady demand—the continuous model
Built for a stable supply and demand environment, the continuous supply chain model is ideal for established companies with minimal variance in their demand, no matter what market conditions exist. The continuous supply chain model allows for continuous delivery of resources and a dependable flow of goods. Companies with strong brand loyalty often use this supply chain model to meet the steady demand.
Highly competitive—the efficient model
The efficient supply chain model maximizes inventory for competitive environments, seeking to reduce production costs along the supply chain wherever possible. Efficiency is a useful model for businesses in highly competitive markets, such as consumer staples. For example, while dairy products have steady demand, few customers have a milk brand preference, so purchases are often based on price. Competitors must be efficient in order to offer the most competitive prices possible.
Trendy fads—the fast model
A fast supply chain model is ideal for businesses that rely on trends and fads, such as clothing, footwear, or children’s toys. Fast models set up fast delivery for the high volume that will expire when a trend has passed. Once the trend has faded, the fast supply chain model will be replaced with another similar one, for whatever the next trend may be.
Market flux—the agile model
Agile supply chain models are a bit more complex than some of the other supply chain models, as they rely on real-time tracking of demand and supply. The agile supply chain model incorporates a combination of virtual integration, market sensitivity, process alignment, and equal contribution of every aspect of the supply chain. The goal with this type of supply chain model is for suppliers to adapt to markets with high demand fluctuation, such is the case with seasonal clothing. It’s also an ideal model for periods of overall supply chain crisis.
Varying factors—the custom-configured model
The custom-configured supply chain model combines the agile and continuous supply chain models, usually to benefit consumer-customized options. This supply chain model is common for fashion companies that allow consumers to personalize their products, such as Vera Bradley and their monogrammed apparel. However, even if market demand is consistent, some companies must factor in the varying demand for customization features.
Demand flux—the flexible model
The flexible supply chain model relies on flexible processes, predictive algorithms, and production automation to meet short periods of high demand and long periods of low demand. Companies with a flexible supply chain model ensure access to a wide range of suppliers, especially suppliers that are accustomed to seasonal traffic. For example, this supply chain model is ideal for companies that experience most of their demand during the holiday season.
Which supply chain model best suits a modern market?
In considering modern market demand fluctuation, most companies rely on a combination of the agile supply chain model and the flexible supply chain model. These supply chain models are adaptive to inconsistent supply chains, incorporating real-time integration and predictive analytics to adjust to fluctuating demand. A solid transportation management system is necessary for these supply chain models to be effective in a modern market.
Incorporating a robust TMS into your supply chain model
CTSI-Global’s HoneyBee TMS provides a real-time integration platform within a universally compatible digital ecosystem so that shippers can best automate their processes and manage access to over 20,000 carriers. This level of carrier access is imperative for an agile supply chain model.
CTSI-Global also works with content providers such as strategic technology partners and BI analytics to provide predictive analytics for demand forecasting. Robust algorithms are essential to managing inconsistent volume within a flexible supply chain model.
Contact CTSI-Global today to talk about how you can update your supply chain model.