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Do mass customisations for customers increase Supply Chain complexity?
Supply chain teams often experience increasing pressure from customers for tweaking the delivery parameters, such as frequency of supply, supply lead time, timing of delivery, order quantity flexibility. While some big customers such as MT or ECom chains manage to get their way, most smaller customers have to live with the standard practices put down by the manufacturers.
What does it take to customise these parameters for every customer? Does it increase cost? Does it induce complexity? Does it involve higher levels of manual interventions? Does it affect service levels like OTIF? These questions often bother the supply chain teams.
The simple answer is that these requests can be accepted without negatively affecting the supply chain performance, provided we tweak the supply chain design and improve the underlying capabilities. Once these are done, mass customisations can be executed more or less in an auto pilot mode.
What are the supply chain capabilities that need to be improved? The most important one is flexibility. We must make the supply chains more and more flexible on an ongoing basis. The more flexible the supply chain is, the more easily it can accommodate such requests.
The other improvements are in communication and execution latency of orders, and switching to dynamic inventory buffers, reconfigured frequently based on demand patterns at the granular level.
Improving these capabilities and going for mass customisation gives the company a Decisive Competitive Edge which is difficult for competitors to match.