Efficient Vs. Responsive Supply Chain

As a business owner, choosing the type of supply chain that works best for your company can be a daunting task. Utilizing the proper supply chain model is critical for your business operations and will allow your company to function more efficiently while also reducing the amount of waste produced during the manufacturing process.

What is Supply Chain?

A supply chain is a type of management system designed to source, produce, and move goods from its origin to its destination. The supply chain is how your business produces goods and how your company can network with the suppliers of your choice, creating the end goal of distributing product to customers. It is important that each part of your supply chain stays as efficient as possible to avoid any unnecessary waste.

 

Efficient Supply Chain

One common type of supply chain that businesses may utilize is known as an efficient supply chain. An efficient supply chain focuses primarily on maximizing their output and maintaining as little input as possible. One way your company can achieve efficiency is by outsourcing certain parts of your supply chain to a reputable 3PL and working to cut unnecessary costs. Often, efficient supply chains will work for certain types of reduction by doing things like; reducing hours, reducing efforts, and reducing the number of resources used. When an efficient supply chain is implemented properly into your business, you may see an increase in satisfaction from your customers as well as suppliers as they are more likely to maintain connections with your company.

Responsive Supply Chain

Another common type of supply chain that businesses may adopt is a responsive supply chain. A responsive supply chain can often be viewed as taking a comprehensive approach to production and distribution as the main focus of a responsive supply chain is to meet customer demands. Though efficiency is still an important aspect in a responsive supply chain, it is not the entire focus as a responsive supply chain is more flexible and operates with the ability to adapt to changes such as expected changes and unforeseen events. To reach the ultimate goal your business must be aware of customer needs and be willing to change production as necessary so that your company can meet all of your goals.

Is One Supply Chain Better Than the Other?

While there is a debate on whether it is more effective for businesses to utilize an efficient supply chain or a responsive supply chain, many companies have found that using a combination of the two is the perfect middle ground. On one hand, having an efficient supply chain is crucial when your company is trying to avoid high costs and are looking to minimize waste. On the other hand, it is important to have a responsive supply chain so that your business can adapt to customer demands in real time.

Learning the differences between a responsive supply chain and an efficient supply chain can benefit your business in the long run. As a comprehensive supply chain management company, our NewStream team understands the struggle when trying to choose the best type of supply chain. Our team is equipped with the knowledge and expertise you need to improve or change your supply chain for ultimate success.

Ready to find your supply chain type? Let’s chat, our experts are ready to help!