(CMR - Hau Lee) Aligning Supply Chain Strategies with Product Uncertainties.pdfVIP

Aligning Supply Chain Strategies wit h Product Uncertainties Hau L. Lee upply chain management has emerged as one of the major areas for companies to gain a competitive edge. Managing supply chains effec- tively is a complex and challenging task, due to the current husiness Strends of expanding product variety, short product life cycle, increasing outsourcing, globalization of businesses, and continuous advances in informa- tion technology. The Internet has contributed to both the increasing needs and opportunities for improved supply chain management. With the Internet, com- panies in a supply chain can be connected in real time with information and knowledge shared continuously, new products and services can be designed to fit special market segments, and new supply chain structures can be developed to serve customers in a more direct manner. When a company faces the pressure of excessive inventory, degraded customer service, escalating costs and declining profits, or a poor return on assets, its supply chain is out of control. On the other hand, when a company moves in to new markets or new technologies, it must have its supply chain prepared for the new business challenges and opportunities. Although there are many new supply chain concepts and fads designed to exploit the advantages of the Internet, successful companies understand that the right supply chain strat- egy is dependent on a number of factors: ? The strategy needs to be tailored to meet specific needs of the customers. ? A product with a stable demand and a reliable source of supply should not be managed in the same way as one with a highly unpredictable demand and an unreliable source of supply. CALIFORNIA MANAGEMENT REVIEW VO L 44, NO , 3 SPRING 2002 105 Aligning Supply Chain Strategies with Product Uncertainties ? The Internet can be a powerful tool for supporting or etiabling supply chain strategies for products with different d