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Article Review of Market-Oriented Supply Chain Management (SCM)
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Article Review of Market-Oriented Supply Chain Management (SCM)
Waller, Dabholkar, and Gentry (2000) conducted a study on the market-oriented Supply Chain Management (SCM). The research aimed to explore the idea of market-oriented SCM strategies and how they influence product versions, also known as the outside-in-processes, as well as internal capabilities, also referred to as the inside-out-process. The study mainly focused on establishing a relationship between product customization and postponement. From the reading, postponement refers to competency in a product version while product customization can be viewed as an outside-in-process. Notably, Waller et al. (2000) discuss that the coordination of these two strategies can contribute to an effective SCM.
The findings of the study indicate that postponement allows firms to develop various versions of products according to customer’s needs and also modify a product. Notably, postponement can be useful in the distribution stage in cases whereby a business delays to transportation the finished products to retail stores. The research also reveals that companies are always in a position to achieve a competitive advantage through lower costs that are relative to competition and superior customer value. Thus, such businesses may achieve this result by using postponement for product customization. Despite the fact that customization and product postponement are separate decisions, they should be developed collaboratively through market-oriented SCM.

In my opinion, companies should adopt mass customization strategy since an increase in product customization leads to an increased inventory holding costs. It, therefore, implies that companies will have to purchase a wider variety of raw materials, hold, and transport different types of products which will be costly. For this reason, firms should adopt mass customization by providing consumers with an ideal product that matches their needs. Companies can achieve mass customization by interacting with customers to know their needs and determining a precise offer that addresses what they want. In this way, the producer will use effective technology to maintain high output and save on costs.
From the study, it shows that in the level of customization there is a relationship between inventory holding cost and postponement. It reveals that an increase in postponement leads to a reduction of holding cost. It is shown clearly that companies can hold raw material for a longer time than the finished goods because it is less expensive. In the level of supply, to convert a good from raw material to finished good require the use of labor at any pickup point to another. It also requires companies’ materials to make the process possible.
Customization also affects inventory holding cost. It is possible that when customers wait for a good for a long period, then the customers expect to pay less. The customers might even bring competition as long as they have not been given more product customization. Therefore, an increase in production cost reduces the cost associated with the lead time.
The research gives a clear definition of optimal postponement as the sum of lead time costs and inventory holding. A research was conducted to show how improvement in the manufacturing process is related to postponement and product customization strategies. It deduced that the ability of a company to reduce the cycle time in an inside-out is only possible when coordinated with various outside-in processes.
From the viewpoint of market-oriented supply chain management, a firm should get the material from production to customer quickly because this lowers the expenses associated with inventory. This was deduced from an experiment with showed that an increase in speed of production reduces both inventory holding and lead time cost CITATION Wal00 l 1033 (Waller, 2000).
References
BIBLIOGRAPHY Waller, M. A. (2000). Postponement, product customization, and market-oriented supply chain management. Journal of Business Logistics, 21(2), 133.