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Also,
the modern Supply Chain concept needs to be more "Lean".
This mean that it should not have more stock than
needed, asset that could unnecessary slow down
response time and increase costs.
So,
the Lean and Agile are two key characteristics of
a contemporary Supply Chain concept that is capable to
offer sufficient service level for the growing
demand.
The
ratio between Lean and Agile should be well
balanced. The key to this fine-tuning is the right
approach to the product portfolio. As there are
different products in the portfolio, contributing
to the share in sales in different percentage,
they should be treated accordingly.
This
can be explained through Pareto principle, which
says that 20% of the SKUs are 80% of sales share.
Since these products are high volume, low variety
and predictable, planning of production and stock
should be more Lean. This demands the Supply Chain
concept without large stocks, with focus on efficiency and economy of scale.
On
the other end of Pareto principle scale are
products that represent 80% of SKUs, but only 20%
of sales share. These products are less
predictable, so the planning should be more Agile.
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