COMPARISON OF EFFICIENT & RESPONSIVE SUPPLY CHAIN

Question 1

Primary Goal

Answer 1

Efficient Supply Chain: Supply demand at the lowest cost
Responsive Supply Chain: Respond quickly to demand

Question 2

Product design strategy

Answer 2

Efficient: Maximize performance at a minimum product cost
Responsive: Create modularity to allow postponement of product differentiation

Question 3

Pricing strategy

Answer 3

Efficient: Lower margins because price is a prime customer driver
Responsive: Higher margins because price is not a prime customer driver

Question 4

Manufacturing strategy

Answer 4

Efficient: Lower cost through high utilization
Responsive: Maintain capacity flexibility to buffer against demand / supply uncertainty

Question 5

Inventory strategy

Answer 5

Efficient: Minimize inventory to lower cost
Responsive: Maintain buffer inventory to deal with demand / supply uncertainty

Question 6

Lead time strategy

Answer 6

Efficient: Reduce but not at the expense of cost
Responsive: Aggressively reduce even if the costs are significant

Question 7

Supplier strategy

Answer 7

Efficient: Select based on cost and quality
Responsive: Select based on speed, flexibility, reliability and quality