7 Types of Supply Chain Business Models PDF

define how businesses source materials, manage BUSM2267 Supply Chain Technologies production, and deliver products to customers 7 types of business models Here are 7 types of business models: 1. Continuous flow This is a supply chain model for stability and consistency. It is b...

define how businesses source materials, manage BUSM2267 Supply Chain Technologies production, and deliver products to customers 7 types of business models Here are 7 types of business models: 1. Continuous flow This is a supply chain model for stability and consistency. It is best suited for industries with a steady, predictable demand for their products. Applicability: Ideal for businesses with a consistent manufacturing process, like automobile manufacturers or food producers. Pros: Maximizes efficiency, reduces the risk of stockouts and maintains a steady production rate. Cons: Less flexible in responding to sudden changes in demand or disruptions in supply. Example: A dairy company that processes milk continuously to meet consistent consumer demand. 2. Fast chain It is tailored for industries characterized by short product life cycles, high demand variability, and a need for rapid response. Applicability: Particularly useful for fashion retailers, electronics manufacturers, or businesses dealing with seasonal or trendy products. Pros: Enables quick response to market trends, reduces the risk of excess inventory, and adapts easily to changing consumer preferences. Cons: Can lead to higher costs due to the need for agility and speed. Example: A fashion retailer that quickly designs, produces, and ships clothing based on the latest trends. 3. Efficient chain This model in supply chain management focuses on maximizing cost efficiency through streamlining operations and minimizing waste. Applicability: Ideal for large-scale manufacturing processes where high volumes and low-cost production are prioritized. Pros: Leads to lower costs, maximizes efficiency, and reduces waste. Cons: Can be less adaptable to changes in market demand or supply disruptions. Example: Large consumer goods manufacturers who rely on high-volume production to keep prices competitive while maintaining quality. 4. Agile This is designed to respond rapidly to market changes and customer demands. It is characterized by its flexibility and adaptability. Applicability: Essential for businesses dealing with high variability in customer demand, such as fashion or technology. 1  Pros: Allows rapid response to market changes, high levels of customer service, and the ability to manage unpredictability. Cons: Can lead to higher operational costs and requires a sophisticated forecasting and response system. Example: Tech companies must adapt quickly to technological advancements and consumer preferences. 5. Flexible The Flexible model blends elements of both efficiency and agility. It aims to adapt quickly to changes while maintaining cost-effectiveness. Applicability: Suitable for businesses that frequently see seasonal peaks or need to adjust production levels. Pros: Balances cost efficiency with adaptability and responds well to seasonal changes or demand fluctuations. Cons: It can be challenging to manage due to balancing efficiency and flexibility. Example: Tech and logistics companies that manage global component sourcing and real-time inventory tracking to quickly adapt to market demands and disruptions. 6. Custom configured This model is tailored to meet specific customer or market requirements. It allows businesses to offer personalized products or services. Applicability: Best for businesses that deal with specialized products or services, where customization is a key selling point. Pros: Offers high levels of customization, leads to increased customer satisfaction, and allows differentiation in the market. Cons: It can be more complex and may incur higher costs. Example: Automotive manufacturers that offer customers the option to customize their car’s features require a supply chain capable of handling varied specifications. 7. Virtual supply chain This model is characterized by using virtual technology, such as cloud computing and data analysis, to improve supply chain operations. Applicability: Suits e-commerce, technology, logistics, and companies with global or complex supply chains. Pros: Enhanced efficiency, real-time data, cost savings, scalability, flexibility, and improved supply chain visibility. Cons: Cybersecurity risks, high initial setup costs, reliance on technology, and potential data integration challenges. Example: Procter & Gamble implemented virtual supply chain technology to increase supply chain responsiveness and reduce costs. 2