Hull University Business School: Creating Resilience by Aligning Product Design and the Supply Chain
|
|
WHEN it comes to creating resilience in the supply chain the fashion industry has much to teach the industry, writes Dr Omera Khan, senior lecturer in the Logistics Institute.
One of the barriers to promoting the effectiveness of product design is that it is often managed in isolation from other functions in the supply chain and there is a danger that supply chain considerations will not be taken into account prior to product launch, which can prove costly.
Product design has long been recognised as a key driver of competitive success in the marketplace. Research estimates that up to 80% of the total costs in the supply chain are determined at the product design stage, but much of the focus in design-driven companies has been on the aesthetic appeal of the product. However, product design also has significant implications across the product life cycle, for example, the availability of components or materials and capacity constraints must be thought about. Considering logistics management early in the design process can help in identifying potential problems if the product could us components or packaging materials with long replenishment lead times. Controlling logistics management costs also helps in anticipating constraints on product development and managing the supply chain and can improve customer service levels and logistics performance. The integration between logistics and product design should be acknowledged as crucial to improving supply chain efficiency. However, many companies are unaware of the potential impact that design decisions can have on profitability and decisions on new products are often taken without a full understanding of the wider implications. The fashion retail industry has seen an unprecedented shift from product-centric to customer-centric strategies and this has had a major impact on the changing risk profile and responsiveness of fashion retailers. Customer-centric businesses are designed to close the gaps between supply chain planning and execution, enabling suppliers to match demand and reduce the risk inherent in supply chain execution. From source to store, the supply chain is not just about the distribution of the finished product, but the supply of raw materials. Growing unpredictability of supply chains, shorter product lifecycles and increased product proliferation has made time-to-market critical to avoid obsolete inventories and this has meant businesses have had to take a more co-ordinated approach to their supply. For example, in the fashion retail industry, the basis of an effective response to the market place is not just having the design competence to identify what the customer want, but the ability to work with suppliers to ensure that they can deliver it at the right time, to the right quality and at the right cost. Therefore, the alignment of product design with the supply chain is important in improving competitive advantage but also has a significant impact in improving supply chain resilience and responsiveness. More articles in
Sectors
CommentsIf you'd like to leave a comment, please register now for free or login
|
