1. Coordinated Product and Supply Chain Design

7. Framework for Matching Product Design and Supply Chain Strategies The impact of demand uncertainty and product introduction frequency on product design and supply chain strategy

8. Physically Efficient vs. Market-Responsive Physically Efficient Process Market-Responsive Process Primary purpose Supply predictable demand efficiently at the lowest possible cost Respond quickly to unpredictable demand to minimize stockouts, forced markdowns, and obsolete inventory Manufacturing focus Maintain high average utilization rate Deploy excess buffer capacity for flexibility Inventory strategy Generate high turns & lower inventory cost Deploy significant buffer stock of all stock items Lead-time focus Shorten lead time at low cost Invest in ways to reduce lead time Approach to choosing suppliers Select primarily for cost and quality Select primarily for speed, flexibility, and quality Product-design strategy Maximize performance at minimum product cost Use modular design to postpone product differentiation

9. Efficiency-Responsiveness Framework of Supply Chain Functional Product Innovative Products Efficient Supply Chain Responsive Supply Chain Match Mismatch Mismatch Match

23. CASE: Benetton Old Manufacturing Process Spin or Purchase Yarn Dye Yarn Finish Yarn Manufacture Garment Parts Join Parts

24. CASE: Benetton New Manufacturing Process Spin or Purchase Yarn Manufacture Garment Parts Join Parts Dye Garment Finish Garment This step is postponed

28. Operational Strategies for Standardization Process Nonmodular Modular Product Modular Parts standardization Process standardization Nonmodular Product standardization Procurement standardization

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