Research Article Assignment for Supply chain - Essay Example

Design Value in Supply Chains Q Summary Xilinx’s supply chain strategy is to embrace its product and process postponement which will eventually help the firm to hold fewer inventories and build its stock (Brown, Lee and Petrakian, 65-80).Q. 2. Importance of the Postponement StrategyThe postponement strategy is one where companies in the technology industry delay their products’ differentiation with an aim of cutting their supply chain costs (Brown, Lee and Petrakian 67). The strategy is also helpful in improving customer services and companies do not incur the losses associated with the short product life cycles.

There are unpredictable demands in this industry, but by using the postponement strategy, the customization process gets delayed. The benefits attained from using this strategy include short production lead times and improved manufacturing processes.Q. 3. Types of Postponement Approaches in the articleThe first type of postponement approach is the product postponement. In this approach, a firm designs a product and uses standardized components to delay its customization (Brown, Lee and Petrakian 67).

For companies like Xilinx, the final configuration of the product gets done when it is manufacturing or distributing its products. The other approach is the process postponement approach, where the company designs the distribution or manufacturing processes. Companies do this to delay their product differentiation processes. Q. 4. Two Key benefits that Xilinx gained from implementing the postponement strategyImplementation of the postponement approach was helpful to Xilinx because there was risk pooling.

One of the benefits is that the risk pooling occurs particularly when aggregating the demand for the finished goods. In addition, the aggregate demand in the market becomes less uncertain which lead to Xilinx holding fewer inventories to offer similar level of services. Xilinx also benefits from having a reduced degree of customization which remains low through to the front-end stage (Brown, Lee and Petrakian 76).Q. 5. Why firms prefer the traditional inventory management approach to postponementFirms prefer the traditional method of inventory management because it makes it easier for them to have virtual business models.

For example, in the case of Xilinx, the business model allows it to operate at a high rate of flexibility and still maintains its processes at a low-cost. Xilinx also benefits from this model because it had new technical innovation and re-engineering ideas as a result of its improved manufacturing processes. The on-time delivery process of the products is also improved.Q. 6. Operational Challenges when implementing a postponement strategyOne of the challenges is that redesigning a product to promote the process of postponement requires the manufacturer to wait for some time until the time when the customers change their designs (Brown, Lee and Petrakian 70).

This happens in the new product generation releases. There is little that is done for a company that has implemented a postponement strategy and wants to create products without necessarily using the front-end stage strategy.Xilinx uses three processes to make their process postponement more effective. The first is the inventory modeling operation initiative and the second is the supply mix prediction initiative. The third is an initiative where there is a back-end cycle time reduction. In the third step, a company uses its inventory modeling to establish how it can best create the push-pull boundaries for its finished goods at different stocking locations.

Xilinx uses its inventory to improve its strategies and establish an optimal level of inventory that it can hold.Q. 7. Is it possible to implement postponement in all environments?Implementation of postponement strategies is not possible in all environments. It requires an organization to have all its management team members giving it a lot of support because of several problems. The change from a company that stocks only finished goods to embracing other ways of stocking is likely to create communication meltdowns between the logistics and sales people.

In addition, it requires companies that prefer to have delayed product customization processes.Work CitedBrown, Alexander, Hau Lee, and Raja Petrakian. "Xilinx Improves Its Semiconductor Supply Chain Using Product and Process Postponement." Interfaces. 30.4 (2000): 65-80.