Typology of Supply Chain Management
Typology of Supply Chain Management
Typology of Supply Chain Management
Fisher’s Matrix
Typology/Models of Supply Chain Management
1) Continuous flow
2) Fast chain
3) Efficient chain
4) Agile
5) Custom-configured
6) Flexible
An important distinction to make is that each model will focus on achieving one of two larger ideal goals i.e.
Efficiency & Responsiveness. In reality each type of supply chain management philosophy includes elements
of both efficiency and responsiveness. If your supply chain is extremely efficient, it won’t be able to respond
to disruption. On the other hand, if the supply chain does nothing but respond to individual or small requests,
it won’t be very efficient at turning out much volume.
Continuous Flow Model
❖ The continuous flow model is built around efficiency. It offers stability in high-
volume environments. This classic model is best suited for manufacturers who
produce the same product repeatedly, with little design fluctuation or alteration.
❖ This model is ideal for commodity manufacturing. Its high level of efficiency is
reflected in low product prices. For manufacturers, margins are based on raw
material prices. That sounds like science to me.
❖ Example: Cement, Salt, Toothpaste, etc.
Fast Chain Model
❖ The fast chain model is built for responsiveness. It’s ideal for manufacturers who
change their product line frequently. This model is the best suited for trendy
products with short life spans. In this example, the manufacturer that can flood the
market before the trend cycle ends is the manufacturer that wins.
❖ This model emphasizes the competitive advantage of the first adopter. But the true
driver of the fast chain is the designer—and the marketing department. Put another
way, if you can create your own trend, you’ll be the first to market. In short, this
model is driven by innovativeness.
❖ Example: Smartphones, smartwatches, etc.
Efficient Chain Model
❖ The efficient chain model is for hypercompetitive industries where end-to-end
efficiency is the ultimate goal. This model relies heavily on production
forecasting in order to properly burden and sweat machinery assets.
❖ The efficient model also relies heavily on commodity and raw material prices. In
the post-pandemic world, efficient chains are struggling with capacity issues.
Drivers for this are labor shortages, material shortages, and delays.
❖ The bottom line is this. When you miss a forecast, it can create a ripple effect.
This can result in lengthy lead times and inflated prices for manufacturers up
and down the supply chain. And that’s when you hear a lot of artful language.
❖ Example: Dairy Industry, Beverages- Pepsico & Coca-Cola, etc.
The Agile Model
❖ The agile model is ideal for manufacturers that deal in specialty items. This model
is finely tuned for small batches of product. That requires less automation and
more expertise. And that additional value-add in turn allows businesses using this
model to command higher prices.
❖ Agile-model businesses can ramp up volume. But past a certain volume threshold,
they typically prove uncompetitive. Compared with efficient-chain-model
businesses, at higher volumes agile businesses get blown out of the water from a
pricing standpoint.