Trade Driven Supply Chain

As the MEs may not to be competitive in producing functional products, most of the needs would be satisfied through imports. We call this the trade driven supply chain, shown in Fig. 7.2. For example in the apparel industry, products that are not fashion-sensitive are produced in the EE, usually in Asia, and imported in large volumes by retailers such as Wal-Mart. Manufacturers in EE obtain large production contracts with lead times of several months and therefore their exposure to demand side risk is negligible. However, they are exposed to a considerable supply side risk, discussed later. 

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Stage 4 The supply chain creates the adaptive enterprise. At this stage of development, the company develops mature processes for revenue management and makes trade-offs in chaimel strategies based on baseline lift factors. The focus is on sensing and shaping demand. This is often referred to as a demand-driven supply chain. 

Over time, organizations realize that supply excellence needs to be defined by trade-offs in source, make, and deliver. The answer lies in aligning these functions to actualize the business strategy. This realization typically happens in stage 3 of the market-driven value chain maturity model (see Figure 1.3) stimulating the development of S OP processes. 

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