ProConnect Supply Chain Solutions

Customized Supply Chain: Need of the hour

Lately, market interest on customized offers an intensive competition on attracting market globally, lead companies to implement supply chain management to improve performance and gain competitive advantage. To this aim, supply chain management in a customer-driven environment is pursuing the transition from traditional supply chain into flexible and efficient one i.e., customized supply chain.

Customization can mean adding an embellishment of the customer’s choice – an engraving, a hand-painted or screen-printed design. In other cases, the product is designed from the ground up to fit the customer’s measurements or preferences. The supply chain for customized products poses some special challenges. For instance, when every product is unique, inventory management requires different strategies. Also, merchants need to collect precise, accurate information about what each customer wants. They need to manage relationships with suppliers to meet unpredictable demand and maintain quality and balance quality control with the desire to fill orders quickly. And if merchants accept returns, they have to manage their reverse logistics to accommodate one-of-a-kind products.

One big challenge that comes with customization is the need to acquire sophisticated inventory management systems. When customization involves assembling components to meet each customer’s demand, companies must also decide where that assembly will take place. New companies outsource all their assembly to third-party logistics firms or, if products are large and heavy, to white-glove delivery carriers.

Benefits in Customized Supply Chain –

1. Customer Satisfaction
2. EBIT margin
3. Transport efficiency
4. Inventory efficiency
5. Service level

Challenges in Customized Supply Chain –

1. Design Culture
2. Accounting Procedures
3. Marketing Focus
4. Value chain constraints

– Venkataraman A