Nature of the product

TBS908 Student ID: 3932941 Supply Chain Management Intake D 2010 Assessment 1

Supply Chain Strategy:

Nature of the Product
Prepared for: Dr. Roger Jenkins Prepared by: Vanessa Lucia Gonzalez Garcia

September 30, 2010

TBS908 COATS Case Study Vanessa Gonzalez Student ID: 3932941

Executive Summary
On the following report we will identify and understand the importance of designing asupply chain focused on the Nature of the Product. It is found that there are 2 types of products demand: Innovative and Functional. Each of these have different supply chain specifications; Innovative products require a quick response to demand and Functional products look for lower cost on their processes. The report also provides a perspective of Coats PLC in this strategy. And at the endconcluding remarks or the approach are given: it is focused on fulfilling demands but lakes to measure customer satisfaction, there is a level uncertainty on the demand of innovative products and this should be take in consideration as well as the changing globalization factors and the take over of China over other manufacturing countries.

Table of Contents
Executive SummaryIntroduction Report I. RESEARCH II. EVALUATION 2 3 3 3 1 1

Concluding Remarks References

Introduction
The growing interest of companies to adopt the Supply Chain Management model is basically due to the market globalization and technology developments. Globalization of the markets, with the increase of innovativeproducts with short life cycles, has created a fierce global competition. The quality of a product, once a differentiation factor, is now a requirement; nowadays competition lies in the product availability in the precise place and day. The access to new information, communication and transport technologies help the development of more efficient methods and tools to synchronize the supply and thedemand, coordinating the activities of suppli-

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TBS908 COATS Case Study Vanessa Gonzalez Student ID: 3932941

ers, producers and distributors. The supply chain is a sequence of steps that transcend the limits of the company. Any company is immersed in some kind of supply chain, and even in more than one, as supplier or as a client. There are different approaches to design a supplychain: SCOR model, the Double Helix, nature of the product or service and the supply chain design and the product life cycle. In this report for Coats PLC we will focus our approach to Nature of the Product. After we define the supply chain design approach we will give an evaluation of the challenges facing Coats PLC, and finally in the concluding remarks, the problems and limitations will bediscussed.

Report
I. RESEARCH
It’s been years now since Porter (1985), consecrates the concept of logistic in the world of business strategy and business schools, he considered that the activities under the supply chain are the ones that give the added value. The introduction of the Supply Chain Management has given a radical change in business organizational charts. The Nature of the Product orService approach has been proposed by Fisher (1997), he believes that a successful supply chain strategy is based on the effective identification of its products demand; there are basically two categories of products: functional, which are known for satisfying the common needs and are still on demand over the pass of years (rise, milk, gasoline, etc.) and the other type are the innovative, that areknown for being the newest accessory or more fashionable. The main differences on these type of products are:

Functional
predictable demand long life cycles low profit margins control over stock

Innovative
unpredictable demand short life cycles high profit margins high probability of shortages / overstock

After the company has defined the essence of its product, it needs to define the...