What Are the 6 Supply Chain Models?

Supply chains are the mechanisms by which fuel our entire way of life. From the food we eat and the clothes we wear to the fuel in our cars and the medicines we take, having an effective and efficient supply chain helps define every part of both our individual lives and collective experience. 

But did you know that when it comes to supply chains, it is not one-size-fits-all? There are various types of supply chain models, each with its own logistics and suited to different types of markets and products. 

As a trusted third-party logistics (3PL) provider specializing in ecommerce fulfillment in Canada, we at Envoy Warehousing and Logistics understand the importance of having a supply chain that works for businesses, not against them.

In this article, we will dive into more detail about what a supply chain is and what are the six supply chain models, so let’s get started!

What is a Supply Chain?

We recently reviewed what a supply chain is and its difference compared to logistics (since the two are often used interchangeably), but as a quick recap: a supply chain is a system comprised of the organizations, resources, people, processes and information that, when utilized together, effectively deliver products and services to consumers. Logistics, on the other hand, is a part of the supply chain and refers to all the companies and processes that work to ensure the supply chain runs smoothly. 

Now that we’ve got that covered, let’s take a closer look at what the six supply chain models are…

1. Continuous Flow Model

When it comes to a Continuous Flow supply chain model, consistency is key, and the Continuous Flow supply chain model does just that: provides a steady and consistent stream of products and information. 

This model guarantees a stable flow for high volumes of product and works best for mature supply chain manufacturers whose products don’t undergo regular design updates and have an established customer demand that rarely changes. So, if you’re a manufacturer who makes the same product over and over again, this is the supply chain model for you!

2. Fast Chain Model

On the opposite end of the supply chain spectrum is the Fast Chain model. This model is all about getting product to market fast and first, before competitors. 

The Fast Chain model is defined by its ability to quickly respond to frequent updates to products, products that move with consumer trends and have a short lifecycle as a result. This supply chain is most successful when products move fast from ideation to hitting shelves, have an accurate market forecast and can efficiently move through the supply chain to keep costs down for consumers. 

Overall, this model is all about flooding the market fast with product when trends are on the upswing while being the first to do so before your competition. 

3. Efficient Chain Model

As the name suggests, this supply chain model is built off of its ability to provide efficiency where jostling for market share is fierce amongst competitors who are offering similar products. Because products that run off the Efficient Chain model will have similar characteristics and value propositions, price will be what sets competitors apart, and the more efficient your supply chain, the lower you can keep costs. 

Ultimately, for the Efficient Chain model to be effective, it needs precise forecasting to ensure there are adequate resources and supply to meet demand and accurately complete order fulfillment. It also relies heavily on peak operation in product manufacturing to keep processes running as efficiently as possible.

4. Agile Model

This supply chain model is best suited to more niche products that are made to order in lower quantities. These are products that require less manufacturing but more precise expertise from the producer. 

While the Agile supply chain model is able to ramp up supply quickly, it can only do so to a certain point; rather, this model requires additional production capacity as well as processes that are designed specifically to handle small batches.

5. Custom-Configured Model

If a business is making a customizable product through production and assembly, this is the ideal supply chain model. The Custom-Configured model works off a combination of the Continuous Flow model and the Agile model, allowing for a fast turnaround time for smaller batch products.

The initial stages of procuring items used for the final product configuration will fall under a Continuous Flow model to allow for consistency and stability in gathering the configurator items. The configuration process itself is typically much less lengthy and will utilize the Agile model in order to get the product quickly assembled and out to customers.

6. Flexible Model

Companies that experience unpredictable demand characterized by periods of high order fulfillment followed by a lull will want to take advantage of a Flexible supply chain model. This supply chain model tries to embody a little bit of everything, prepared to respond to any scenario. 

The Flexible supply chain model succeeds when there’s an ability for manufacturers to hold extra resource capacity, react fast, leverage strengths in process and product design and pivot their production flow depending on market demand.

Envoy Warehousing and Logistics has the knowledge and network to ensure efficient order fulfillment, no matter the supply chain!

Managing effective logistics in today’s unpredictable and volatile supply chain landscape is no easy feat, but we’re here to help. Rely on the expertise and experience of Envoy for your warehousing and ecommerce fulfillment services. With facilities in Vancouver and Toronto, our established logistics network will ensure your product gets to your customers on time, every time. 

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