Strategic Dilemmas in Supply Chain: Making the Right Trade-offs

Are we aware of the trade-offs that our current supply chain has?

Being mindful of our choices is the first step in getting better.

We call it ‘supply chain’ when we make decisions about getting things from the manufacturing place to the store where people buy them.

But sometimes, we have to make choices that aren’t perfect.

It’s like playing a game where you can only pick two out of three good things.

For example, let’s say we want to get our jewellery to the store quickly so our customers can buy it soon. But the way we do that is by using a plane, which is faster but more expensive. Or we could use a truck, which is cheaper but takes longer. We have to decide what’s more important to us: getting the shiny things to the store quickly or saving money.

Another example is, if we want to make sure that we always have enough shiny things in the store, we might have to keep more in the warehouse. But that means we have to spend more money to store them, and we might have less space for other things. So, we have to decide if having enough shiny things in the store is worth spending more money on storage.

In short, when we make decisions about our supply chain, we have to think about what we want most and what we’re willing to give up. It’s like a game, we need to decide which trade-off will be the best for our store.

𝗪𝗵𝗲𝗻 𝗿𝗲𝘁𝗮𝗶𝗹𝗲𝗿𝘀 𝗽𝗹𝗮𝗻 𝘀𝘂𝗽𝗽𝗹𝘆 𝗰𝗵𝗮𝗶𝗻, 𝘁𝗵𝗲𝘆 𝗺𝗮𝗸𝗲 𝗰𝗵𝗼𝗶𝗰𝗲𝘀.
They have to choose between 2 things that are important.
Here are some examples:

1. 𝗦𝗽𝗲𝗲𝗱 🚀 𝘃𝘀. 𝗖𝗼𝘀𝘁 🤑:
Retailers might have to decide if they want to
– spend more money to get products to stores faster, or
– spend less money and take longer.

2. 𝗛𝗼𝘄 𝗺𝘂𝗰𝗵 𝘁𝗼 𝘀𝘁𝗼𝗰𝗸 🎚️ 𝘃𝘀. 𝗛𝗼𝘄 𝘄𝗲𝗹𝗹 𝘁𝗼 𝘀𝗲𝗿𝘃𝗲 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿𝘀 🛎️:
Retailers might have to decide if they want to
– keep more products in the store to make sure customers can always find what they want, or
– keep less products to save money on storage.

3. 𝗛𝗼𝘄 𝘁𝗼 𝘀𝗵𝗶𝗽 🚢 𝘃𝘀. 𝗛𝗼𝘄 𝘁𝗼 𝗣𝗿𝗼𝘁𝗲𝗰𝘁 𝘁𝗵𝗲 𝗘𝗻𝘃𝗶𝗿𝗼𝗻𝗺𝗲𝗻𝘁 🍏:
Retailers might have to decide if they want to
– ship products quickly, but use methods that are bad for the environment, or
– take longer to ship but use methods that are better for the environment.

4. 𝗪𝗵𝗲𝗿𝗲 𝘁𝗼 𝗕𝘂𝘆 𝗽𝗿𝗼𝗱𝘂𝗰𝘁𝘀 🤷‍♂️ 𝘃𝘀. 𝗛𝗼𝘄 𝗦𝗮𝗳𝗲 𝘁𝗵𝗲 𝗦𝘂𝗽𝗽𝗹𝘆 𝗶𝘀 👥:
Retailers might have to decide if they want to
– buy products from only one supplier to save money, or
– buy products from many suppliers to make sure they always have what they need.

5. 𝗤𝘂𝗮𝗹𝗶𝘁𝘆 🙇 𝘃𝘀. 𝗣𝗿𝗶𝗰𝗲 💷:
Retailers might have to decide if they want to
– buy products that are cheap but not very good, or
– buy products that are expensive but very good.

In the end, the decision will depend on what the specific retailer wants to achieve and what their priorities are.