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The Four Drivers of Supply Chain Performance

The Four Drivers of Supply Chain Performance. Driver 1: Inventory Requirements. Inventory "stockage" exists in all supply chains because of a mismatch between supply and demand Inventory plays a significant role in a supply chain's ability to support a firm's competitive strategy

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The Four Drivers of Supply Chain Performance

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  1. The Four Drivers of Supply Chain Performance

  2. Driver 1: Inventory Requirements • Inventory "stockage" exists in all supply chains because of a mismatch between supply and demand • Inventory plays a significant role in a supply chain's ability to support a firm's competitive strategy • A supply chain manager must make routine decisions tocreate a more responsive and more efficient supply chain

  3. Driver 2: Transportation • Transportation moves the product between different locations in a supply chain • Transportation is prominent in a company's competitive strategy • The fundamental trade-off for transportation is cost (efficiency) versus speed (responsiveness)

  4. Driver 3: Facilities • Facilities include all locations in the supply chain to store, assemble, or fabricate inventory • Decisions regarding location, capacity, and flexibility of facilities significantly affect supply chain performance • In DoD, depot and field repair facilities are cornerstones of the supply chain

  5. Driver 4: Information • Information serves as the connection between the supply chain's various stages • Information and information systems are an important part of balancing responsiveness versus efficiency • Businesses must trade-off between efficiency and responsiveness when trying to include more supply chain information

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