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The current issue and full text archive of this journal is available at www.emeraldinsight.com/0957-4093.htm

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0957-4093.htm

Aligning products with supply chain processes and strategy

Euthemia Stavrulaki and Mark Davis

Management Department, Bentley University, Waltham, Massachusetts, USA

Abstract

Purpose – As supply chain management has become more strategic (rather than transactional) in nature the need for a more integrated perspective of how products, and processes should be aligned with strategic decisions to enhance competitive advantage has been amplified. The purpose of this paper is to provide a better understanding of how this alignment should be done. Design/methodology/approach – A conceptual framework was developed that emphasizes the need for alignment between the key aspects of a product and its supply chain processes and highlight, the links between supply chain processes and supply chain strategy. Findings – Products can be produced with one of four distinct supply chain structures: make to stock, assemble to order, built to order and design to order. Each supply chain structure is appropriate for different products based on their demand characteristics. Each supply chain structure orients its production and logistics processes differently based on its strategic priorities. Practical implications – High volume, low demand uncertainty products should be matched with lean supply chains enabled by efficient processes, whereas low volume, high uncertainty products should be matched with agile supply chains enabled by flexible processes. Medium volume and medium demand uncertainty products should use leagile supply chains that use a combination of efficient and flexible processes. Originality/value – After thoroughly reviewing and synthesizing important findings from existing literature, an integrated framework is derived that highlights how products should be best matched with their production and logistics processes. Also, the framework is compared with two well-known, process-oriented supply chain frameworks: the supply chain operations reference (SCOR) and the global supply chain forum (GSCF) models. Keywords Supply chain management, Operation management, Lean production, Agile production, Paper type Research paper

1. Introduction With the increasing advances in technology, and information technology in particular, manufacturing companies, their suppliers and their distributors can all be linked together in a seamlessly integrated organization. Supply chain processes that cross organizational boundaries can, therefore, be more easily defined, analysed and improved to provide companies with a sustainable competitive advantage. As a result, supply chain processes are becoming more strategic rather than transactional (Niezen and Weller, 2006). This growing strategic importance of supply chain management has motivated the need for managers to more clearly understand the links among products, the supply chain processes used to produce and deliver them, and the strategy used to manage the supply chain activities. To help managers better understand these relationships, researchers and practitioners often use simple but effective supply chain frameworks. Such conceptual frameworks can:

provide a dashboard view that, in conjunction with key performance metrics, can be used for overall performance assessment;

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assist managers in making rational strategic decisions;

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strategic decisions; Supply chain processes and strategy 127 The International Journal of Logistics Management Vol. 21

The International Journal of Logistics Management Vol. 21 No. 1, 2010 pp. 127-151 # Emerald Group Publishing Limited

0957-4093

DOI 10.1108/09574091011042214

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. effectively communicate the supply chain strategy to employees.

Given the complexity of supply chain management, it is not surprising that there exists a number of frameworks that attempt to provide insights into the relationships among products, strategy and supply chains (we review the relevant literatu re in the next section). Yet, the linkages between products, their resp ective supply chain strategies and respective supply chain processes have not been clearly delineated in existing frameworks. Beginning in the late 1960s with the work of Skinner (1969) early conceptual models focused primarily on understanding the relationships between products and production processes, whereas subsequent models focused on understanding how products and supply chains interact, with no focus on distinguishing between production and logistics. Nevertheless, as Lambert et al. (2005) acknowledges, there still remains a need for a broader supply chain framework that can "support the execution of corporate strategy by enabling the alignment of all necessary resources required to respond to the demands of the market". Our aim is thus to contribute to this stream of research by proposing a conceptual framework that can clearly and succinctly communicate a firm’s strategic vision as it relates to a product and its supply chain. In contrast to previous frameworks, we specifically focus on both manufacturing and logistics processes and discuss how they should be aligned to achieve the strategic objectives of the supply chain. Specifically, we highlight the need for alignment between the strategic capability of a supply chain (leanness, leagility or agility) and the operational objectives of its manufacturing and logistics processes (efficiency or flexibility). The foundation of our framework is based on indentifying four representative supply chains (build-to-stock (BTS), assemble-to-order (ATO), make-to-order (MTO), and design-to-order (DTO)) that are appropriate for different products depending on the product’s characteristics. We use the manufacturer as our focal point in the supply chain. As we later discuss in more detail, our framework can be used by researchers interested in empirically testing a product-supply chain matrix, along the lines of prior empirical tests that have established Hayes and Wheelwright’s (1979a, b) product-process matrix. Our framework can also benefit educators and managers in a number of ways, including:

emphasizing the need for appropriately mapping a product’s strategic positioning with both the corresponding production and logistics processes and also the supply chain capabilities available to the firm;

evaluating and comparing a product’s competitive positioning with that of similar products and supply chains;

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evaluating the need for agility, leanness or leagility in a product’s supply chain;

highlighting the strategic implications of changing the relative positioning of a product and its corresponding supply chain; and

facilitating the planning of a product’s growth strategy by selecting the appropriate supply chain processes for both existing and new products and markets.

We proceed by reviewing the pertinent literature and discussing our contributions and how they relate to existing work in section 2. Section 2 presents four well known supply chains that provide the building blocks for our unified framework. Section 2 describes our framework in detail, section 2 compares our framework with two prominent supply chain process frameworks and section 2 summarizes our findings and concludes.

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2. Literature review Several frameworks have been previously developed that classify and match products with processes and/or supply chains.

2.1 Products and the production process Hayes and Wheelwright (1984, 1979a, b) first introduced the now classic product- process framework shown in Figure 1 for aligning products with their corresponding production processes. The main objective of this framework was to assist managers in strategically matching a process type (for example, continuous, assembly line, batch, job-shop, or project) with a product based on its volume, mix, and demand variability characteristics. High volume, low variety products are best produced with a continuous process (for example, an oil refinery or a paper mill), medium volume and medium variety products are best suited for an assembly line or batch process (for example, an automobile assembly line or a fast food restaurant), and low volume, high variety products are best made with a job-shop or project-type process (for example, a printing shop or movie production). Aligning products with production processes in this way clearly highlights the problems that can occur when a product is produced with the wrong process. For example, if a continuous process is used for the production of low volume, high variety products, unacceptably high out-of-pocket fixed costs are incurred due to the high capital investment that continuous processes typically require and the lack of volume to justify those high fixed costs. At the opposite end of the spectrum, firms with growing product volumes that don’t make the necessary investments in capital in order to reduce their variable costs will find themselves with high opportunity costs as their customers shift their business to competitors that offer comparable but lower priced products. There have been many subsequent studies that have discussed and empirically tested the product-process matrix attesting to its continued influence and interest (see Devaraj et al., 2001; Kemppainen et al., 2008 for reviews). Several of the studies have found empirical support for the product-process matrix, while others suggest ways to enhance it. None of these studies, however, address the need for connecting the production process with other supply chain processes. Our proposed framework attempts to integrate

processes. Our proposed framework attempts to integrate Supply chain processes and strategy 129 Figure 1.

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Figure 1.

Hayes-Wheelwright’s

product-process matrix

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Figure 2. Fisher’s product-supply chain matrix

product characteristics with not only the production process, as does the Hayes and Wheelwright’s framework, but also with the supply chain process in general.

2.2 Products and supply chains As supply chain management continues to be a critical factor for achieving and maintaining a competitive advantage (see Lee, 2002; Mohammed et al., 2008), several authors have proposed alternative supply chain focused frameworks for the strategic alignment of products with specific types of supply chains based on their demand and supply characteristics. One of the most influential and often cited frameworks was proposed by Fisher (1997) who separated products into either functional or innovative categories based on their degree of demand uncertainty, their profit margin levels, and product mix. Functional products are typically characterized by low profit margins, low product variety, and high volumes, whereas the exact opposite is true for innovative products. Fisher suggested in his framework that supply chains for functional products should focus on operational efficiency (emphasizing primarily cost reduction strategies), in contrast to supply chains for innovative products that should focus on market responsiveness (emphasizing quick turnarounds for time to market) as illustrated in Figure 2. Fisher’s framework does not discuss how production and logistics processes may achieve efficiencies, nor does it clearly define responsiveness and its relationship to flexible processes; subsequent research has incorporated the notion of responsiveness within the more general capability of agility, as we later discuss in more detail. Rather than simply separating supply chains by the type of product offered (functional or innovative), we instead distinguish between four types of supply chains and discuss how they align with specific products. By specifically aligning the four supply chain types with product characteristics and their corresponding manufacturing as well as logistics processes, we provide a more complete picture of how managers should think strategically when managing their supply chains. Several authors have subsequently discussed and expanded Fisher’s framework. In addition to categorizing products as functional or innovative, Lamming et al. (2000) included the dimension of product complexity in their framework. Christopher and Towill (2002), Christopher et al. (2006) included the dimension of a product’s replenishment lead time and contrasted lean, leagile (hybrid), and agile supply chains. Huang et al. (2002), Lummus et al. (2006) also characterized products and supply chains based on leanness and agility. While not directly related to Fisher’s framework, Webster (2002) proposed a pyramid model that has its base rooted in product and process characteristics and its top leading to improved supply chain performance. Although all these efforts discuss how products should be matched with lean, agile or hybrid supply chains, as we do in this work, they do not methodically discuss how both the production and logistics processes should vary according to the type of product and supply chain considered. Lee (2002) also expanded Fisher’s framework by incorporating not only demand uncertainties but also supply uncertainties in his proposed framework, stating that the supply process can be either stable or evolving (unstable) for both functional and

proposed framework, stating that the supply process can be either stable or evolving (unstable) for both

innovative products. This suggests four different types of supply chains, which Lee defined as:

(1) ‘‘efficient’’, appropriate for functional products with stable supply processes such as non-perishable food products;

(2) ‘‘risk hedging’’, appropriate for functional products with unstable supply processes, such as hydroelectric power;

(3)

‘‘responsive’’, appropriate for innovative products with stable supply processes, such as fashion apparel; and

(4)

‘‘agile’’, appropriate for innovative products with unstable supply chains, such as new technology product introductions.

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Although supply uncertainty is an important distinction, we do not address it in our framework. However, despite the inclusion of supply uncertainty, Lee’s framework does not consider which production and logistics processes are most appropriate for each supply chain type, as we do. Furthermore, his framework does not consider when efficient or agile supply chains might be more appropriate for the more common supply chains with stable (certain) supply. Specifically, Lee’s framework suggests that responsiveness is the ultimate goal for innovative products with stable supply, but does not go into detail on how responsiveness relates to agility or flexibility. Reichhart and Holweg (2007) recently provided a clarification of the relationship between responsiveness, flexibility and agility, which they noted was lacking from prior literature. They defined responsiveness as a form of external flexibility (visible to the customer and triggered by a customer order). External as well as internal flexibility (which focuses on manufacturing and inbound logistic processes) are key prerequisites to a company’s agile capabilities. We incorporate this view of agility within our framework as we discuss in detail in section 3. Overall, the goal in developing these frameworks is to provide a better understanding of how product characteristics relate to supply chain characteristics, and the need for alignment between the two. Again, what appears to be currently lacking is a more unified view, from the manufacturer’s perspective, of how product characteristics should relate not only to production processes, but also to logistics processes, and based on these characteristics what the competitive priorities of the manufacturer and its supply chain should be. Our framework builds upon this literature by providing a clearer and more integrated perspective of these concepts.

2.3 Supply chain processes 2.3.1 Production and logistics processes within a supply chain. As we have suggested, the literature to date does not provide a supply chain process orientation. There is, however a growing interest in a process-oriented view of an organization (Davenport et al. , 1995) and of the supply chain in particular. Lambert et al. (2005) for instance emphasize the importance of relating supply chain processes to the strategic decisions within a firm. These authors provide a comprehensive review of five supply chain process-oriented frameworks, comparing two of the more developed and influential ones in detail: the global supply chain forum (GSCF) model and the supply chain operations reference (SCOR) model. As we discuss in detail in section 5, these two process frameworks clearly describe the key supply chain processes, but do not concentrate on how these processes relate to supply chain strategy and to a product’s characteristics, as we do in this work.

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2.3.2 Alignment of logistics processes with other functional areas. A separate research stream has focused on how logistics processes should be aligned or integrated with other peer functions that are both internal and external to a company. Empirical research in this area validates that internal and external integration among key supply chain processes (such as production and logistics) tends to improve firm performance (Droge et al. , 2004; Gimenez and Ventura, 2005; Fabbe-Costes and Jahre, 2008; van Hoek et al. , 2008). While this literature empirically verifies the benefits of integration, and the challenges associated with implementation, it does not identify what the focus of the integrative efforts should be as determined by a product’s characteristics. In other words, the focus of this research stream does not articulate the strategy of product/ process integration, but rather it explores the value of such integration in various industries. Our contribution here is that we focus on product/process integration from a strategic perspective that highlights when manufacturing and logistics processes should be efficient or flexible depending on a product’s characteristics.

2.4 Summary Existing literature on aligning products with processes has focused primarily on:

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the interface between products and production processes;

the interface between products and supply chains; and

descriptions of supply chain processes.

Figure 3 provides a summary of representative papers in the literature and the various subsets of issues they consider. The figure illustrates that the existing literature does not provide an integrated link between product characteristics, the transformation (or production) processes used to produce these products, the logistics processes required to source components and raw material and deliver the finished products to customers, and the strategic focus of the supply chains. The goal of this paper is to address this gap by providing such a link, which will ultimately lead to better decision making.

Figure 3. Literature summary and comparison

providing such a link, which will ultimately lead to better decision making. Figure 3. Literature summary

3. Defining four key supply chains Before introducing the four types of supply chains that provide the building blocks of our framework, we define the three key supply chain elements identified by Lambert et al. (2005) required to make products available to customers:

(1)

the supply chain network;

(2)

the supply chain processes the network operates with and supports; and

(3)

the supply chain decisions required for managing the network.

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Simchi-Levi (2006) defines a supply chain network as the infrastructure (suppliers, manufacturing centres, and warehouses) and the material (raw material, work-in- process, and finished goods inventory) that flows between the facilities to satisfy end- customer demand. Davenport et al. (1995) define a business process as a set of activities with specified business outcomes for customers. Accordingly, supply chain processes are defined as the set of activities used to carry out the movement of material through the supply chain network. As suggested by the Council of Supply Chain Management Professionals, supply chain processes include both production and logistics processes. In particular, logistics processes include the activities relating to the forward and reverse flows and storage of goods, such as transportation and warehousing. Finally, supply chain management represents the management (planning, organizing, implementing, and controlling) of supply chain processes. For brevity and convenience, we use the term supply chain to refer to the supply chain network, the supply chain processes, and the supply chain management for a given product. The relationships between these terms are shown in Figure 4. The objective of our framework is to provide a better understanding of supply chain choices from the viewpoint of a manufacturer that produces a single product or family of similar products. If a company has a large number of business units, each producing dissimilar products in terms of their demand and process characteristics, then its senior management should apply our proposed framework separately to each business unit. Our framework builds upon four well-known supply chains that are differentiated

by:

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the types of products they make;

their production processes; and

their logistics processes.

they make; their production processes; and their logistics processes. Figure 4. Relationship among supply chain terms

Figure 4.

Relationship among supply chain terms

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These four supply chains, each of which also has its own primary strategic focus, are:

BTS, ATO, MTO, and DTO. We recognize that these four supply chains represent four specific points on a continuum that ranges from the BTS process to the DTO process. Several operations management textbooks (e.g. Davis and Heineke, 2004; Krajewski et al., 2007) distinguish between ‘‘make to stock’’/‘‘build-to-stock’’, ‘‘make-to-order’’ and hybrid processes. There has also been recent interest in the academic literature in understanding and comparing these supply chain types. For example, Gunasekaran and Ngai (2005) reviewed the concepts and classified the literature relating to build-to-order supply chains as well as suggested directions for further research in this area. Skipworth and Harrison (2006) considered three supply chains, an engineer-to-order (which we refer to as DTO), a MTO, and a hybrid supply chain they term ‘‘form postponement’’ The SCOR model also distinguishes between three types of ‘‘products’’ (as opposed to supply chains): stocked products, MTO products, and engineer-to-order products, detailing in each case how each of five supply chain processes (plan, source, make, deliver, and return) vary depending on the type of product involved. While the four supply chains we discuss, and particularly the BTS and MTO, commonly appear in the press and in the academic literature, all four, to our knowledge, have not been previously brought together in a unified framework as we present here. We next discuss each supply chain in detail. The main characteristics of each supply chain are summarized in Figure 5.

3.1 Build-to-stock supply chain In BTS supply chains, the end consumer has no individual inputs into the configuration of the product, and typically purchases the product from a retailer or

e-tailer. While the end consumers may have a choice in products (e.g. whole milk, 2 per cent milk, 1 per cent milk, and non-fat milk), none of the products associated with this supply chain are made specifically for individuals. Examples here include groceries, books, appliances, toiletries, house wares, etc.

3.1.1 Build-to-stock product characteristics. BTS supply chains are very common

because they are appropriate for high volume, low profit margin, commodity products.

These low-cost products tend to have a relatively stable demand, which can therefore be forecasted with a low degree of error when accurate historical demand information is available.

3.1.2 Build-to-stock production process characteristics. The production processes for

these mature, highly standardized products focus primarily on achieving low-cost operations, which is typically accomplished with high volume transformation processes, such as continuous processes or high-volume assembly lines. Production is often highly automated resulting in little or no labour. Barilla SpA, for example, the largest pasta manufacturer in the world, manufactures its products with continuous

(when mixing, forming, and rolling the dough to the desired thickness) and large batch processes (when sizing and cutting the pasta) that are located in large dedicated facilities yielding thousands of kilos of pasta per day (Hammond, 1994).

3.1.3 Build-to-stock logistics process characteristics. Manufacturers in these supply

chains tend to push product onto retailers’ shelves based on end-product forecasts. The product flow relies heavily on distribution centres and retailers that deliver products to

consumers in the most cost-efficient manner. If the volume allows it, manufacturers may also make direct-to-store distribution agreements with large retailers such as Wal-Mart and Costco for their stable, high-volume products (Lee, 2002). The many layers and multi-ownership characteristics of BTS supply chains make efficient

Supply chain processes and strategy 135 Figure 5. Comparison of supply chain characteristics operations and

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Figure 5.

Comparison of supply chain characteristics

operations and information sharing challenging. Therefore, this type of supply chain is the most prone to the bullwhip effect (Lee and Whang, 1997). Another important characteristic of BTS supply chains is that direct contact with the end consumer happens only at the retail level. Therefore, since these commodity-type products are hard to differentiate from competitors, retailers tend to have significant power in these supply chains. For example, supermarkets charge slotting allowances to manufacturers in exchange for the space allocated to their products and large retailers such as Wal-Mart often dictate product delivery schedules, order payment terms and even quality levels for the products they carry in their stores (Facenda, 2004). As implied by Fisher’s (1997) framework, efficiency is the primary focus for both manufacturing and logistics processes of BTS supply chains. High volume manufacturing processes emphasize efficiency through automation (such as Barilla does with pasta production) and large volume assembly lines (such as those used by commercial bakeries). High volume logistics processes are likewise geared towards ensuring that sourcing, warehousing and transportation costs are minimized. For example, warehousing costs are reduced through the cross-docking concept developed by Wal-Mart, while transportation costs are minimized through the shipment of

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products in full truckloads. Purchasing in large volumes can further increase the efficiencies of BTS supply chains.

3.1.4 Build-to-stock supply chain strategy. BTS supply chains must relentlessly focus

on minimizing costs. For example, Posco, a Korean-based steel manufacturer, has become the largest steel processor in the world by emphasizing efficient BTS operations based on cost cutting lean principles such as JIT production (Lee, 2002). As the Posco example illustrates, efficient production and logistics processes are enablers of the lean paradigm. Lean principles originally aimed to improve manufacturing processes by eliminating waste and were first practiced in the Toyota Production System (Ohno, 1986). Goldsby et al. (2006) describe how the meaning of lean has been progressively expanded over the past two decades to apply to the extended supply chain enterprise. In addition to representing a set of production and associated logistics tools, it is now often regarded as a strategic capability. Christopher (2000) emphasizes that lean concepts work best when demand is relatively stable and product variety is low, as characterized by BTS supply chains. Moreover, Mason-Jones et al. (2000)

describe cost as the ‘‘market winner’’ (as opposed to just a market qualifier) for a lean supply chain. It is therefore within this context that our framework relates BTS supply chains with the lean capability and its emphasis on minimizing waste and costs. Lean supply chains typically mandate close collaborative relationships with suppliers (Choi and Wu, 2009). Such cooperative relationships are possible due to the large volume, long-term commitments that can be made among the manufacturer and its suppliers. Close supplier relationships allow for information sharing among supply chain members that can reduce costs and counteract the bullwhip effect (Agrawal et al., 2009). Therefore, information sharing initiatives such as quick response, efficient consumer response, and vendor managed inventory are common in BTS supply chains (Sharland et al. , 2003; Balakrishnan and Geunes, 2004). For example, in the early 1990s Marks and Spencer, a UK-based retailer instituted vendor managed inventory practices with key suppliers of its stable products resulting in significant cost savings for both the suppliers and Marks and Spencer (Storey et al. , 2005).

3.2 Assemble-to-order supply chain This supply chain provides customers with a limited number of choices in the configuration of the final product. Customers can pick and choose among various standard components that are available in arriving at their own product, but have no control at the individual level in determining the design of these components. In order to offer customers a number of options companies typically delay the final assembly of products until orders are received. Dell provides a well-known example of an ATO supply chain that offers customized desktops and laptops at relatively low prices to both businesses and individual consumers. Similarly, automobile manufacturers offer several options, such as air conditioning, power windows, or heated seats to their dealers; end consumers can also special order cars not immediately available at the dealerships, while end consumers in Europe may even have the option to order cars directly from the manufacturer.

3.2.1 Assemble-to-order product characteristics. ATO supply chains are typically

appropriate for higher priced consumer goods that are assembled to individual end customer specifications. These products are also frequently updated with the latest technologies, increasing their rate of obsolescence. With the ATO supply chain,

forecasting takes place at the component level where aggregate demand tends to increase accuracy. In contrast to the BTS supply chain, where the final product is

immediately available to the customer, ATO supply chains necessarily imply a certain amount of waiting from when an order is placed to when the product is actually received. However, in very competitive industries, or those with products that have a high rate of depreciation, such as the personal computer industry, the quoted delivery

lead time can be relatively short (for example, as little as five to seven business days).

3.2.2 Assemble-to-order production process characteristics. A modular approach is

often used in both the design and production of ATO products to address the trade-off between efficiency and flexibility. With modular production processes, standardized components are produced efficiently in appropriate batch sizes and then assembled to meet individual customer orders. For example, Dell’s assembly lines use state-of-the-art equipment that can assemble pre-made components quickly while achieving efficiencies in production. Similarly, Toyota is able to offer a relatively large variety of features and options for their Scion series of cars by producing basic vehicles on their assembly line

located in Japan, which are later customized based on dealer’s orders (Goldsby et al., 2006). In both examples, however, the standardized components used to produce the

basic product impose a constraint to the degree of customization each product can have.

3.2.3 Assemble-to-order logistics process characteristics. The ATO supply chain is

typically controlled by the firms doing the assembly (e.g. Dell (personal computers) and Toyota (automobiles)). There are often a small number of intermediaries in ATO supply chains with end products either going to retailers/dealers for delivery to the end customer, or directly to the end customer. Toyota, for instance, ships its basic Scion model from Japan to distribution facilities located near US ports of entry where they are customized before being shipped to various dealerships. Toyota also ships some inventories of these cars directly to their dealers who can accommodate simpler customization requests (Goldsby et al., 2006). Because ATO supply chains usually have low profit margins and tend to operate within very competitive environments, they need to maintain relatively efficient manufacturing and logistics (especially upstream logistics) processes. At the same time, ATO supply chains must maintain some amount of flexibility in their production and logistics (especially downstream logistics) processes so they can customize and deliver products quickly. It is important to clarify here how we use the terms flexibility and agility. As with the concept of lean, flexibility was initially only associated with manufacturing processes, beginning with Slack (1987) who described flexible production processes as those processes that can quickly react to changes in product mix and ramp up or reduce production volumes as required. In recent years, however, the term flexibility is often viewed from a company-wide or a supply-chain-wide perspective. There is a large amount of literature on the subjects of flexibility and agility and how they might relate to each other and to supply chains, but as Narasimhan et al. (2006) recently conceded ‘‘there is a considerable confusion over [lean and agile] paradigms as to their content’’. Similarly, Reichhart and Holweg (2007) acknowledge that the terms flexibility, agility, and responsiveness are often used interchangeably by both practitioners and academics. For consistency, we employ the term flexibility within the context of manufacturing and logistics processes (to highlight processes that have the ability to change quickly in response to production or logistics requirements). At the same time, we use the term agility to denote a business-wide capability to react quickly to market changes, enabled among other things by flexible processes. In section 3.4, we discuss in detail the characteristics of flexible production and logistics processes as well as agile

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supply chains that also apply for the final assembly and downstream logistics processes of ATO supply chains. 3.2.4 Assemble-to-order supply chain strategy. The major management challenge with the ATO supply chain is the need to carefully balance the pressures of achieving low cost, timely production and delivery (both of which are essential to remain competitive) while still offering a wide range of product variety. In other words, ATO supply chains must embrace both agile and lean elements in their capabilities. Such

hybrid supply chains are often called leagile (Christopher and Towill, 2001) and relate to

a postponement supply chain strategy (Feitzinger and Lee, 1997; Skipworth and

Harrison, 2006) since the actual production is postponed until individual customer information is available. Leagile supply chains separate their lean and agile focus in reference to a decoupling point (Naylor et al., 1999; Mason-Jones et al., 2000). The decoupling point determines where the lean emphasis stops and the agile emphasis begins. For some supply chains, this decoupling point is naturally the point where the assembly or final production takes place. For other supply chains, the decoupling point

can be time-based, as suggested by Christopher (2001), starting with the lean production

of base level demand prior to the selling season and then switching to flexible production

for restocking inventory during the selling season. This latter type of leagility is practiced by several fashion retailers such as the ski clothing manufacturer Sport Obermeyer (Fisher et al., 1994) and the fashion retailer Benetton (Meichtry, 2007). Like BTS manufacturers, ATO manufacturers tend to establish long-term relationships with their respective suppliers to achieve efficiencies in their manufacturing and logistics processes (Langfield-Smith and Greenwood, 1998). They also tend to encourage their suppliers to replenish consumed components on a just-in-time basis, following the

principles of lean manufacturing (Choi and Wu, 2009). Both Dell and Toyota have such close relationships with their suppliers (Magretta, 1998; Kraemer and Dedrick, 2002). Toyota, in fact, not only has close relationships with its suppliers, many of whom locate near its assembly plants, but also cultivates close relationships among their suppliers, thereby allowing them to share best practices (Dyer and Nobeoka, 2000).

3.3 Make-to-order supply chain The MTO supply chain provides consumers with the opportunity to have at least some part of the product uniquely built to their individual specifications. At the same time, the end consumer has no input into the overall design of the product, which remains fixed within the design parameters established by the firm. Examples of products that fall into this category include custom made clothing and shoes (e.g. as offered by Land’s End, Tommy Hilfiger, and Nike), pre-designed houses, commercial airplanes like those produced by Boeing, and custom made furniture, such as those offered by the Sherrill Furniture Company, located in Hickory, NC. Sherrill Furniture produces a large variety of MTO upholstered furniture. With its 9,600 sofa series, for example, customers can choose from four types of arms, two legs, five backs, five bases, five frames, three cushions, two back pillows, and more than two dozen types of toss pillows. In addition, they can select from ten different wood stains and more than 700 fabrics. 3.3.1 Make-to-order product characteristics. The MTO supply chain delivers customized, relatively expensive products that are specifically built to meet the needs of individual customers, although the actual design specifications have previously been established. These products are low volume and high margin products. Interviews with the management of one of Sherrill’s retailers, Jordan’s furniture, a retail chain with locations in eastern Massachusetts and southern New Hampshire, revealed

that Jordan’s has seen significant growth over the last several years in its customized, MTO furniture sales. The senior sales manager at Jordan’s Natick, MA store observed that ‘‘Even though the delivery time for customized furniture is typically six to nine weeks, most of our customers don’t mind the wait because they are getting exactly what they want’’.

3.3.2 Make-to-order production process characteristics. Customization with these

products usually consists of a combination of standardized modular components and additional elements that are specifically produced to meet individual customer requirements. Some MTO supply chains are highly automated using flexible manufacturing equipment, while others are more labour intensive. Higher labour skills are usually required in these production processes compared to the ATO and BTS production processes. In MTO supply chains, forecasting is primarily done for raw materials and standardized components. The raw material and components may be on hand to ensure quick customization, but actual production does not begin until the customer’s order is received, a characteristic typical of a pure pull process. As Gunasekaran and Ngai (2005) point out, MTO supply chains can have longer lead times than ATO supply chains because components and parts may not be as readily available to assemble the final product. Project or job-shop type processes tend to dominate here. Sherrill Furniture, for example, operates as a job shop beginning the construction of the various components

of a sofa (arms, legs, backs, frames, etc.) only after an order is received. Sherrill aims to strike the right balance between efficient and flexible production by designing the various components of a sofa with a modular approach in mind, thus allowing for different sofa designs to be produced from a smaller number of components.

3.3.3 Make-to-order logistics process characteristics. The control of a MTO supply

chain lies primarily with the builder or the product manufacturer (e.g. The Boeing Company). There may be no distributors or retailers in MTO supply chains. The smaller number of supply chain intermediaries allows for a faster response to customer requests, as well as easier sharing of information among the supply chain members.

To ensure satisfied customers, the logistics processes of a MTO supply chain must minimize delays. Although customers of Sherrill furniture need to wait for several weeks before receiving their orders, unnecessary delays are avoided by purchasing raw lumber in large quantities from various suppliers and maintaining a large inventory of fabrics and various other components, such as wooden sofa legs, purchased from outside vendors. Unlike the case of Sherrill furniture, competitive pressures often dictate that custom-made products be produced and delivered within a short amount of time. For example, manufacturers that supply Marks and Spencer with exclusive, short-life-cycle, designer products are required by Marks and Spencer

to deliver such products in as little as four days (Christopher et al. , 2006)[1]. In such cases, manufacturers must not only ensure they have the appropriate raw materials on- hand, but they must also pay close attention to their delivery schedules, which are often optimized with the help of reliable outbound logistics partners.

3.3.4 Make-to-order supply chain strategy. Because of the relatively low volumes and

high profit margins associated with MTO products, firms here focus primarily on attracting and maintaining new customers, ensuring customer satisfaction by producing a high quality, customized product, and being sufficiently flexible to address the demand uncertainty inherent in this supply chain. Similar to ATO supply chains, MTO supply chains are leagile, only the decoupling point that separates the lean from

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the agile emphasis is moved upstream to the beginning of the production process where raw materials are processed (rather than at the start of the assembly where components are processed). With the decoupling point between lean and agility shifting towards the raw materials, a larger proportion of key supply chain processes begin to focus on flexibility. MTO supply chains may therefore have less opportunities to practice lean principles (e.g. they may be forced to carry large amounts of raw materials inventories, as Sherrill Furniture does), although they should still attempt to gain efficiencies as much as possible. One way to achieve efficiencies is through collaborative relationships with key suppliers. As many authors have attested to, long term, collaborative relationships has been a growing trend over the last decade (Storey et al. , 2005; Choi and Wu, 2009) regardless of the type of supply chain used. It is thus important for MTO manufacturers to establish long-term relationships with suppliers of standardized components and materials whenever possible, especially for strategically important components (Tang, 1999). Close relationships with key suppliers cannot only ensure reasonably priced, high quality raw materials, but they can also help with their timely delivery. For example, with highly customized, low volume networking products, Cisco maintains close relationships with their suppliers and chooses them based on their proximity to the main markets rather than solely on their ability to provide the cheapest price (Lee, 2004). Although establishing close supplier relationships has many benefits, there can also be several barriers to attaining them in MTO supply chains. One such barrier is that MTO manufacturers must have a sufficiently flexible supplier base to be able to explore alternative sources of raw materials that may be required for certain orders. In addition, given the large demand variability of customized products, MTO supply chains may find it beneficial to use more than one vendor for key raw materials in order to ensure their availability during sudden or seasonal surges in demand. Another barrier can be the small order volumes for some components, which reduce the manufacturer’s bargaining power with suppliers. Tang (1999) describes several criteria that a buyer should have to achieve higher bargaining power with a supplier. These include having in-house capability to produce the part, incurring low supplier switching costs, and being an important customer to the supplier. Tang (1999) also develops a supplier relationship map based on a buyer’s bargaining power and the importance of a part to the buyer. Accordingly, MTO manufacturers should carefully map their supplier relationships to ensure the right balance of efficiency and flexibility with their supplier base.

3.4 Design-to-order supply chain The ability to completely customize a product is the key characteristic of the DTO supply chain, resulting in the customer having the greatest amount of input into the finished product. (Products produced with this process are often referred to as bespoke products.) In addition to having unique individual characteristics built into the product, as is done with the MTO process, the DTO process allows customers to design the products to meet their unique individual tastes. Products made with the DTO supply chain represent the ultimate in customization, as there are virtually no constraints on the customers with respect to incorporating their individual preferences and requirements into the final design of the product. Examples of products in this category include designer dresses for women that may be used for special occasions (e.g. weddings, or special awards ceremonies), custom made men’s suits like those made on London’s Savile Road, original architecture house construction and large luxury yachts. The Electric Time Company, located in Medfield, MA, provides another

good example. Most of Electric Time’s clocks are one-of-a-kind that are designed and built to meet specific architectural requirements for the buildings in which they are installed. Often these clocks need to be fully integrated into the building itself, both

because of their physical size as well as their individual electrical requirements. These customized clocks, which typically range in price from $4,000 to $50,000 each but can sometimes cost more than $100,000 and be up to 30 feet in diameter, often require 12-15 weeks to build, but can run as long as 25 weeks.

3.4.1 Design-to-order product characteristics. Such products are by definition low

volume (often volumes of one), with highly variable characteristics, and very high

priced. Forecasting is hardly done at all in the DTO supply chain, as the raw materials are either commodities readily available in the market place or must be individually sourced based on the specific needs of the product’s final design.

3.4.2 Design-to-order production process characteristics. Project and job-shop type

processes tend to dominate the DTO supply chain to ensure flexibility in production. Much work has been done in the literature in identifying important characteristics of these flexible manufacturing processes (see Oke, 2005 for a review). At Electric Time, each customized clock is treated like an individual project. While the company tries to incorporate standard components wherever possible, it will customize any clock to whatever degree a customer requires, including customized controllers and clock movements. In fact, it is the only clock manufacturer that produces its own controllers and clock movements, which it considers to be one of its competitive advantages. Process flexibility is accomplished through the use of computerized machine tools that can adjust to a wide range of sizes and thicknesses of sheet metal, and through the use of highly skilled workers in fabrication and assembly operations. There is typically no finished goods inventory in DTO supply chains. As with our MTO example of Sherrill Furniture, maintaining inventories of only commodities, such

as sheet steel, and commonly used components such as clock hands, controllers, and clock movements, provides Electric Time with significant flexibility to meet individual customer requirements while at the same preventing the delivery time from getting unacceptably long.

3.4.3 Design-to-order logistics process characteristics. The DTO supply chain is

usually controlled by the designer and builder, which typically deals directly with the end customer, and lead times tend to be long. Electric Time, for example, deals directly with the end customer who is usually the architect of the building. (In some cases, the actual production, or some part of it, may be subcontracted out, in which case the supply chain is controlled by the designer.). Flexible logistics processes are essential in DTO supply chains. Electric Time handles the delivery and installation of the customized clock to the end customer using logistics partners that are flexible enough to transport products of significantly different shapes and sizes. (The final assembly of the clock is often done at the customer’s site.) More generally, Swafford et al. (2006) define distribution flexibility as the availability of a range of delivery options with multiple carriers, which reduces the likelihood of late deliveries. In addition, sourcing flexibility is defined as the availability of a range of tier one suppliers as well as the ability to have flexible contracts with these suppliers and to influence their performance in terms of delivery frequencies, quantities, and lead times. Similarly, Lummus et al. (2003), Duclos et al. (2003) argue that flexible logistics processes should be able to adjust to global requirements, serve individual customer needs, and have the ability to change both

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warehouse space and transportation carriers. Makeyourownjeans.com, for instance, is a DTO supply chain that uses multiple carriers for their custom product deliveries. The company produces a variety of custom made clothes, such as jeans, suits, and tuxedos. After customers specify their measurements and style preferences on-line they can receive their custom-made products two to three weeks later. Makeyourownjeans.com uses multiple shipping partners that include FedEx, DHL, TNT Global Express Logistics and Mail, and Aramex to serve its customers worldwide. 3.4.4 Design-to-order supply chain strategy. DTO supply chains must provide its diverse customers with the highest quality of product and service in a highly uncertain environment. Because of its emphasis on responding to uncertain and changing customer needs, agility is the ultimate competitive priority of DTO supply chains. DTO supply chains must maintain highly flexible production and logistics processes to achieve agile capabilities. As we already mentioned, although some papers in existing literature use the term flexibility with respect to both processes and supply chains (Stevenson and Spring, 2007), it is more prevalent to employ the term ‘‘agility’’ to describe the capability of the entire supply chain to respond effectively to market changes (Reichhart and Holweg, 2007; Naylor et al. , 1999; Goldman and Nagel, 1993). Flexible production and logistics processes are thus enablers of agile supply chains (Swafford et al. , 2006; Narasimhan et al. , 2006; Mohammed et al. , 2008). In addition to flexible logistics and production processes, Mason-Jones et al. (2000) identifies the key elements of agile supply chains to be:

.

.

focus on reducing lead times; and

focus on enabling supply chain visibility.

Similar to Mason-Jones et al. (2000), Lee (2004) suggests that information visibility and rapid data availability is a key element of supply chain agility, as are collaborative relationships among supply chain members. Baker (2006) examines the role that distribution centres play for overall supply chain agility and discusses how warehouses should be designed to enable agility (via practices such as cross-docking and in-transit merging). Close supplier relationships have also been discussed within the context of agility in the literature (e.g. Lee, 2004; Swafford et al., 2006) because they enable manufacturers to influence the agility of their key suppliers. At the same time, however, the literature stresses the importance of having a range of options for suppliers and delivery carriers to ensure rapid response to changing demand and supply conditions. Therefore, as with ATO supply chains, although close supplier relationships can be beneficial in DTO supply chains, multiple supplier options must be explored and several barriers need to be acknowledged. For example, some suppliers may be used so infrequently or in such low volumes that close supplier relationships can be difficult to maintain. Scale can offer a significant advantage in this respect. DTO supply chains that operate on a larger scale, such as the Makeyourownjeans.com example we mentioned earlier may be able to develop and maintain long-term partnerships with some suppliers, such as those who supply denim for their popular jeans. In contrast, smaller scale DTO operations are likely to have a harder time establishing and maintaining close supplier relations. Hersey, for example, is a small scale custom-made shoe company based in Fitchburg, Massachusetts. Hersey is such a small company that it simply cannot afford to offer a variety of colour options for their custom designed shoes because they have chosen to focus on getting high quality leather in just two colours (blue and gray) from key suppliers.

4. Aligning products with supply chains Our discussion of the four supply chains and their respective strategic emphases in the previous section naturally leads to our complete framework, which is presented in Figure 6. Our framework illustrates that as the product characteristics change so does the focus of the production and logistics processes as well as the focus of the supply chain strategy. As with the Hayes and Wheelwright (1984) framework, the diagonal of our product-supply chain matrix in Figure 6 represents the zone of strategic fit in which companies can operate successfully by aligning their production and logistics processes with the product characteristics as well as the overall supply chain strategy. As we discussed in section 2, various authors and frameworks have captured different aspects of alignment between products, processes, and supply chains. However, our framework presents a more complete and detailed picture of the alignment among these three entities that had not been addressed in previous literature. Figure 6 also suggests that there may be significant opportunity costs incurred when products and their corresponding processes operate outside the zone of strategic fit. Consider, for instance, a company operating in the upper right corner of Figure 6. In

company operating in the upper right corner of Figure 6. In Supply chain processes and strategy

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Figure 6.

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this case, a BTS supply chain operates with efficient production but flexible logistics processes. Clearly there is a missed opportunity here. Even though the production function appropriately focuses on efficient operations to address the high-volume demand, the transportation, and sourcing functions are inappropriately focusing on agility (at an unnecessarily higher cost), thus reducing the opportunities for low cost sourcing and transportation of the goods to be stocked for final purchase. Such a scenario would correspond, for example, to Barilla or Dell putting more emphasis on hedging strategies with their suppliers (which is appropriate when there is a lot of risk due to highly uncertain supply), when in fact the emphasis should be on cultivating relationships with specific suppliers to ensure lean and just-in-time deliveries. At the other extreme, misalignment also occurs in the lower left corner of Figure 6. In this case, a DTO supply chain operates with flexible production but efficient logistics processes. Such misalignment can again cause potentially high opportunity costs because even though production appropriately focuses on low volume, high variety output, the supply chain cannot source or deliver these products with the same levels of flexibility. It would be as if Sherrill Furniture or Electric Time focused exclusively on the cost savings achieved when sourcing and transporting raw materials in large batches, or when delivering products to their customers. The focus should be on having the appropriate variety of raw materials in place and the appropriate delivery structure so that production and final delivery are not delayed and ensure a high quality product. Finally, we should emphasize the applicability of the product-supply chain matrix in Figure 6 for various supply chain ownership structures and the importance of applying the framework separately to each product line. With respect to supply chain ownership structure, the product-supply chain matrix applies even when manufacturing is outsourced, or when the manufacturer sells directly to the end customer. Consider, for instance the case where the brand owners (who design or sell the product) outsource its manufacturing. Our framework suggests that the brand owners would need to outsource to the appropriate manufacturing company based on how the manufacturer’s processing capabilities relate to the overall supply chain strategy for the product. For example, if the brand owners operate with a DTO supply chain, they should then choose a manufacturing company based on the flexibility of their production processes. On the other hand, if the brand owners sell high volume, undifferentiated products with a BTS supply chain, they should choose a manufacturing company with production processes that focus on efficiency as well as arrange for the efficient transportation of the final products to the end customers. To illustrate, consider the case of Woolworths, a U.K. retailer that sells a million plastic Christmas trees each year (Christopher et al., 2006). Woolworths (the brand owner in this case) outsources these trees mainly to Chinese manufacturers. Because Woolworths have very accurate product demand, they can place orders as much as six months in advance and achieve significant cost savings in this BTS supply chain with little risk. With respect to product categories, successful companies with multiple product lines should consult the product-supply chain matrix in Figure 6 and create specialized supply chains depending on each product line’s characteristics. Cisco, for example, uses a DTO supply chain for their highly customized, low volume networking products choosing vendors based on their proximity to the main markets. For its wide variety of mid-value products, Cisco operates with an ATO supply chain employing vendors in low-cost countries that build core sub-assemblies, which are then customized by Cisco. And for its standard, high volume products, Cisco maintains a BTS supply chain that uses contract manufacturers in low-cost countries (Lee, 2004).

5. Comparisons with existing process-oriented supply chain frameworks Our discussions thus far emphasized the need for aligning the production and logistics processes of a product with its demand characteristics and for matching supply chain types with products. We next discuss how our framework relates to the two most prominent process-oriented supply chain frameworks introduced in the literature review in section 2.3. The SCOR framework consists of five operations-based processes (plan, source, make, deliver, and return) but does not include other key processes such as sales and marketing, or new product development. As Lambert et al. (2005) deduces, the SCOR model focuses primarily on operations (rather than supply chain) strategy. Our proposed framework is compatible with the SCOR approach, while taking a broader view of supply chain strategy by clearly identifying the necessary strategic capabilities for each of the four supply chains we defined in detail. Figure 7 highlights how the five SCOR processes relate to our framework. We should emphasize that although we regarded reverse logistics, including product returns, as part of logistics processes, reverse logistics was not the focus of our framework. The literature on how return processes relate to supply and product characteristics is sparse. Our framework represents a starting point for how managers can begin to think about integrating supply chain strategy with product characteristics and reverse logistics processes. We suggest that BTS and ATO supply chains should primarily focus on efficient return processes, whereas MTO and DTO supply chains should primarily focus on flexible return processes. This view concurs with Blackburn et al. (2004) who recommend that an efficient return process using a centralized processing facility is appropriate for time insensitive products, whereas a responsive return process using decentralized processing is more appropriate for time sensitive products. The GSCF framework is broader than the SCOR framework and identifies eight supply chain management processes that encompass all of the key processes within a company’s operations (see Figure 8 for a list of the eight processes and how they relate with our framework). Croxton et al. (2001) describe these supply chain processes in detail and connect the strategic activities of each of these processes with their respective operational activities. In addition, the demand management, the returns management, and the order fulfilment processes are individually examined by Croxton et al. (2002), Rogers et al. (2002), Croxton (2003), respectively. These efforts focus on documenting the activities of key supply chain processes and highlighting how these activities relate with the strategic planning process, but do not discuss (as we do in our

planning process, but do not discuss (as we do in our Supply chain processes and strategy

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Figure 7.

Aligning products, manufacturing, and logistics processes within the SCOR framework

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Figure 8. Aligning products, manufacturing, and logistics processes within the GSCF framework

and logistics processes within the GSCF framework framework) what strategy or what type of supply chain

framework) what strategy or what type of supply chain processes would be more appropriate for different types of products.

6. Conclusion and future research In this paper, we described in detail four distinct supply chains: BTS, ATO, MTO, and DTO. We discussed the product characteristics as well as the important features of the corresponding production and logistics processes for each supply chain. We also identified and discussed the key management challenges that exist with each supply chain (including supplier relationships) and distinguished between the strategic focus on leanness (enabled by efficient processes), agility (enabled by flexible processes), and leagility (a blend of both lean and agile capabilities), which are directly related to the individual characteristics of each supply chain. We then positioned these four supply chains within a unified conceptual framework that assists both researchers and practitioners to assess the strategic fit between a company’s products, its supply chain, and its production and logistics processes. By synthesizing and expanding on existing conceptual frameworks identified in the literature, our proposed framework emphasizes a process-oriented view of supply chains (not as common in prior work) and highlights the important linkages between a product, its supply chain processes and its supply chain strategy. It also underscores the need for alignment between the product and its supply chain processes and clarifies how this alignment should be achieved. As new products are introduced more frequently in the marketplace and as supply chains become more fragmented with

more and more companies outsourcing key elements of their supply chains (Shapiro, 2004), alignment can no longer be assumed, yet the need for alignment becomes even more important. In this increasingly complex environment, our framework can aid managers to better visualize and understand the implications of their decisions as they design or monitor a product’s supply chain over time or as they devise a supply chain strategy for different products serving different customer segments. Consider, for instance, a new product launch. Existing literature has recognized the importance of integrating new product development with supply chain design and the need to pre- inform and engage supply chain members before a product launch to ensure product availability (Fine, 2000; Rungtusanatham and Forza, 2005; Forza et al., 2005; van Hoek and Chapman, 2006). This body of work focuses on identifying the benefits of and mechanisms for coordinated new product development, but does not provide a unified framework for how new products should be matched with both production and logistics processes. Our product-supply chain matrix can provide some guidance in this context, suggesting that the higher the demand uncertainty associated with a new product launch (such as for radically new products) the more flexibility must be built into its production and logistics processes so that its supply chain is agile. As the product gains customer visibility and demand volumes become more predictable, the focus can gradually shift to a higher volume leagile or lean supply chain to gain efficiencies in production and logistics. Over time, alignment between the product and its supply chain processes must be reassessed as supply chains can gradually shift away from the zone of strategic fit due to growth in their production and distribution networks, technology advances and customer base expansion. To illustrate, consider Microsoft, which in 2001 successfully entered the video game market by outsourcing the hardware production of its Xbox video game to Singapore-based Flextronics (Lee, 2004). Flextronics decided to initially assemble the Xbox in facilities in Mexico and Hungary to ensure a more agile ATO supply chain, and only much later shifted production to China to achieve efficiencies. There are two interesting research directions suggested by this work, both relating to empirically testing parts of our framework. First, one could empirically explore specific hypotheses corresponding to our four supply chain types in order to link process choice to product and supply chain characteristics. For example, do BTS supply chains indeed tend to operate with efficient production and logistics processes and focus on lean capabilities? And more generally, do lean and agile supply chain capabilities relate to products with different demand and volume characteristics? Although, as we reviewed, much discussion of such concepts has appeared in the literature, empirical analysis has only recently begun to appear in the literature. Narasimhan et al. (2006) for instance empirically tested the distinctions between lean and agility within the confines of manufacturing organizations. Similar tests need to be expanded to examine the broader supply chain and to distinguish between supply chains types and products. In addition, it would be interesting to empirically validate the link between product/ supply chain alignment and performance. Several researchers have empirically explored the validation of prior manufacturing-oriented conceptual frameworks such as the Hayes and Wheelwright’s product-process matrix (e.g. Safizadeh et al. , 1996; Ritzman and Safizadeh, 1999; Devaraj et al. , 2001; Kemppainen et al., 2008). Along the same lines, empirically validating that firms that operate on the diagonal of our product-supply chain matrix in Figure 6 are more likely to have better performance compared to firms that don’t would be an interesting avenue for future research.

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Note

1.

Incidentally, Marks and Spencer’s strategy for these customized products is different from the one it uses for their stable products (refer to section 3.1).

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Further reading Guide, D., Souza, G.C. and Van Wassenhove, L. (2004), ‘‘Reverse supply chains for commercial returns’’, California Management Review, Vol. 46 No. 2, pp. 6-22. Skinner, C.W. (1974), ‘‘The focused factory’’, Harvard Business Review, pp. 113-21. Supply-Chain Council (2008), ‘‘Supply-chain operations reference-model’’, Overview of SCOR, version 8.0.

Corresponding author Euthemia Stavrulaki can be contacted at: estavrulaki@bentley.edu

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