End-To-End Supply Chain Strategies: A Parametric Study of the Apparel Industry
Shardul S. Phadnis, Charles H. Fine
Production and Operations Management · 2017 · Volume 26 · Issue 12
Abstract
This study examines the tradeoffs in sourcing and sales strategies (i.e., upstream and downstream supply chain strategies) by considering them as components of an integral end-to-end supply chain strategy. We evaluate four end-to-end supply chain strategies under various scenarios using a newsvendor model, and compare the model's predictions against the prescriptions in Fisher's (1997) framework, which recommends “cost-efficient” supply chains for “functional” products and “responsive” supply chains for “innovative” products. We considered combinations of offshore vs. nearshore sourcing, and online vs. brick-and-mortar retailing. This study's key finding is that sourcing and sales strategies are not completely modular: an integral end-to-end strategy may not decompose into an optimal sourcing strategy and a separately computed optimal sales strategy. Our analyses sharpen strategic supply chain thinking by identifying realistic conditions in which an end-to-end strategy with cost-efficient components could outperform one with responsive components for innovative products, or when one with responsive components could be more profitable than one with cost-efficient components for functional products.
Keywords
supply chain strategy, sourcing strategy, distribution strategy
Enable JavaScript for citation tools and additional paper interactions.