(Solved Homework): 1. In what ways can the design of a firm’s supply chain network affect its…

1. In what ways can the design of a firm’s supply chain network affect
its ability to create value for customers through efficiency,
effectiveness, and differentiation?

Expert Answer

The supply chain network enables a linkage of the flow of goods from the raw materials to its end-users thereby including a broad network of Company’s various parties such as the suppliers, the intermediaries and finally the customers. When this network is managed with Enterprise Resource Planning (ERP) systems, then the flow of goods as well as money from one end to the other alongside flow of information in a unified way becomes more feasible. With such activities in the designing of a firm’s supply chain network, there is higher efficiency established in the system that gives rise to the income generation power of the firm and adds value to the end product that reaches to the customer.

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The firm’s supply chain network design would include effective marketing channels that could be typical to countries or regions. It is to be also noted that a Company’s supply chain network can never be static and evolves in response to various scope available in a specified regions and the conducive conditions helping the same.

The supply network designing needs to consider various crucial decisions. The distribution could be intensive or selective or exclusive. Intensive distribution is aimed at maximum market coverage; selective distribution is aimed at making the product available to selected dealers or retailers only in a given territory while an exclusive distribution is most restrictive form of market coverage. Based upon the category of classifications, the firm’s supply chain design helps in easier differentiation of its offered products to the target audience. It further takes into consideration the Target market factors, product related factors and Company-related factors more efficiency and effectiveness of the supply network channel so resorted to. Further it also enables to manage the channel relationships by empowering the channel, controlling the same and undertaking the channel leader role. In case of the service channels, minimizing the waiting time, managing service capacity and improving service delivery mechanisms also help in making the network efficient, more effective and differentiated from that of the others.

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