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What Is the Right Supply Chain for Your Product - Summary

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What is the Right Supply Chain for your product?
-Marshall Fisher
Summary prepared by Sunny Bhambhwani for Great Lakes Institute of Management Chennai
Need for the Right Supply chain
Before judging the correct supply chain for your organisation, we first need to understand what a supply chain is. A supply chain is a system of moving a product/service from supplier to customer. It involves organisations, people, technology, resources and activities.
Hence, a right supply chain would be the one that not only delivers the product/service to the customer, but also helps the producer match the demand of the product/service to his supply, thereby causing no excess or shortage of inventory. In the current competitive marketplace, a producer cannot afford to lose any customer due to unavailability of the product when the customer needs it, nor can he afford to bear excess cost for inventory surplus which might be unsold for a long time. Hence, deciding the right supply chain is of prime importance in the operational functioning of the organization.
Types of products
To judge the right supply chain, the producer first needs to identify his product as functional or innovative. A functional product is the one that generally satisfies basic needs, has a long life cycle and has a predictable demand. Basic commodities fall under this category. Due to the stability in the demand, competition is fierce for functional products and hence, producers tend to differentiate their product from others by using innovation for the same. In due course of time, a functional product tends to become more and more innovative.
Contrary to the functional product, the innovative product has short life cycles and it is very difficult to predict its demand. Generally new products, made-to-order products fall under this category. As time passes and the familiarity of the customer with the new

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