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HOW TO APPLY THE 
RIGHT SUPPLY CHAIN 
STRATEGIES WITH 
PRODUCT 
UNCERTAINTIES ?
a.Why Should We Align Supply Chain 
Strategy? 
b.Supply Chain Strategies in the 
Information Era 
c.Setting Up a Right Supply Chain 
Strategy to Match Product 
Uncertainty
Products which have different 
characteristics may face different 
demand and supply uncertainties. 
So , how can we identify? 
The Uncertainty Framework
How to reduce 
uncertainties?
a.Demand uncertainty reduction strategies 
Sharing demand information and synchronized 
planning across the supply chain with the internet 
Cases: Barilla & Nabisco and Wegmans 
b.Supply uncertainty reduction strategies 
1. Free exchanges of information along with product 
life cycle 
2.Early design collaboration 
Cases: The Micro-Compact Car 
3. Supplier hubs 
Cases: Fritz
a. Efficient Supply Chains (Cutting costs as much as possible) 
Maximizing cost efficiencies on cross transmission of information in 
the supply chain by refusing non-value added actions, reaching a 
scale economy, and using optimization techniques, etc. 
b. Risk-Hedging Supply Chains 
Pooling and sharing resources in a supply chain to diversify risks in 
supply disruption. 
c. Responsive Supply Chains 
Being responsive and flexible to the changing and diverse needs of 
consumers 
Build-to-order and mass customization models 
d. Agile Supply Chains 
A combination of responsive to consumer needs and risk 
diversification
a. Functional products with stable supply processes 
For products which have both low demand and supply uncertainties, 
efficiency is the only competitive advantage and costs and 
information coordination are two elements of efficiency. 
b. Functional products with evolving supply processes 
Those products which have low demand uncertainty but a high 
supply uncertainty, represent a high risks in supply chain, so a Risk-hedging 
supply chain can contribute to reduce the risks. 
c. Innovative products with stable supply processes 
With a highly unpredictable demand and short product life cycle, 
excessive inventory can cause a significant storage cost. 
d. Innovative products with evolving supply processes 
Products with both high demand and supply uncertainties should 
reduce the uncertainties from two sides. The Agile supply chains are 
the best choice!
References: 
a. Hau L. Lee, California Management Review, VOL.44, NO.3, 
Spring 2002 
b. Google images

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Aligning supply chain strategies with product uncertainty cmr spring 2002-kaho tse

  • 1. HOW TO APPLY THE RIGHT SUPPLY CHAIN STRATEGIES WITH PRODUCT UNCERTAINTIES ?
  • 2. a.Why Should We Align Supply Chain Strategy? b.Supply Chain Strategies in the Information Era c.Setting Up a Right Supply Chain Strategy to Match Product Uncertainty
  • 3. Products which have different characteristics may face different demand and supply uncertainties. So , how can we identify? The Uncertainty Framework
  • 4.
  • 5. How to reduce uncertainties?
  • 6.
  • 7. a.Demand uncertainty reduction strategies Sharing demand information and synchronized planning across the supply chain with the internet Cases: Barilla & Nabisco and Wegmans b.Supply uncertainty reduction strategies 1. Free exchanges of information along with product life cycle 2.Early design collaboration Cases: The Micro-Compact Car 3. Supplier hubs Cases: Fritz
  • 8. a. Efficient Supply Chains (Cutting costs as much as possible) Maximizing cost efficiencies on cross transmission of information in the supply chain by refusing non-value added actions, reaching a scale economy, and using optimization techniques, etc. b. Risk-Hedging Supply Chains Pooling and sharing resources in a supply chain to diversify risks in supply disruption. c. Responsive Supply Chains Being responsive and flexible to the changing and diverse needs of consumers Build-to-order and mass customization models d. Agile Supply Chains A combination of responsive to consumer needs and risk diversification
  • 9.
  • 10. a. Functional products with stable supply processes For products which have both low demand and supply uncertainties, efficiency is the only competitive advantage and costs and information coordination are two elements of efficiency. b. Functional products with evolving supply processes Those products which have low demand uncertainty but a high supply uncertainty, represent a high risks in supply chain, so a Risk-hedging supply chain can contribute to reduce the risks. c. Innovative products with stable supply processes With a highly unpredictable demand and short product life cycle, excessive inventory can cause a significant storage cost. d. Innovative products with evolving supply processes Products with both high demand and supply uncertainties should reduce the uncertainties from two sides. The Agile supply chains are the best choice!
  • 11. References: a. Hau L. Lee, California Management Review, VOL.44, NO.3, Spring 2002 b. Google images