Managing Supply-Demand Risk In Global Production: Creating Cost-Effective Flexible Networks Harvard Case Solution & Analysis

Globalization has resulted in development of hyper-efficient supply chains, which operate nicely in a world that was predictable. Still, with globalization comes a world full of uncertainties, and these supply chains that are efficient often cannot contend with unpredictable fluctuations in demand and supply. These supply-demand imbalances are a main business risk in a vast line of industries--including cars and defense, aerospace, chemicals, engineered goods, pharmaceuticals, and semiconductors-- because capacity is quite expensive. Mix-flexibility, where a plant can make more than one type of product--is an attractive antidote for this danger. In this column, we discuss ways that are worse and better to adopt mix flexibility.

Managing Supply-Demand Risk In Global Production Creating Cost-Effective Flexible Networks Case Study Solution

To start, senior executives should answer two crucial questions: How do we create flexible plants? And how do we go from versatile plants to a cost effective adaptive network? Successful firms would not blindly use exactly the same flexibility approach throughout their company: they will tailor the Four Ps--product design, process design, production technology, and individuals--to fit the different features of distinct tiers within their creation chains. Businesses that are successful will not sacrifice price in the altar they will create flexible networks that are cost effective by configuring somewhat adaptive networks in a way that delivers almost all the benefits of networks that are absolutely adaptable.

PUBLICATION DATE: July 15, 2014 PRODUCT #: BH620-PDF-ENG

This is just an excerpt. This case is aboutĀ GLOBAL BUSINESS

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