What Is the Right Supply Chain Model for New Products?

A lot has to get done when it comes to launching a new product.  Aside from marketing and selling, enterprise executives need to know how much to make, how much to stock, and how they’ll spread that stock. 

If the new product is replacing an older one, the enterprise would need to figure out what to do with the older product’s inventories and its raw and packaging materials.  If the new product will involve purchase of new specialized manufacturing equipment, what will happen to the machines used for the older one? 

New products also would have new characteristics.  They may have more limited shelf lives.  They may use materials that require special handling. 

Many enterprise executives often plan very well the manufacturing and distribution of new products.  Many, however, don’t have immediate plans how to respond to the actual demand as soon as the new product is launched.  Higher than expected demand would wipe out inventories quickly and strain production and transportation capabilities.  Lower than expected demand would result in inventories occupying precious floor space and idle machines and workers costing the enterprise money. 

Every product has a life cycle.  A new product may start slow or move fast but would eventually reach a plateau and decline.  Some enterprises try to prolong the lives of their products especially if the products have profitable margins.  Enterprise executives, on the other hand, won’t hesitate replacing maturing products in exchange for potentially more beneficial ones. 


Joffrey Colignon & Joannes Vermorel, Product Life-Cyle (Supply Chain), April 2012, https://www.lokad.com/product-life-cycle-(inventory-planning)

Supply chain managers and engineers play a key role in the management of product life cycles.  And it starts not when a product is launched but before.  Many enterprise executives have the habit of telling supply chain managers to plan only when the product is just about to be introduced.  And when the demand becomes reality, more often than not it comes out much different than expected; the supply chain manager ends up scrambling for more materials, more storage space, more production capacity, or the opposite. 

Supply chain managers and engineers can contribute a great deal in the conception of a new product.  The supply chain engineer (SCE) in particular can compute estimated needed capacities for production, transportation and storage.  SCE’s can devise deployment plans and simulate various demand scenarios.  They can also work out the quality assurance protocols not only for manufacturing but also for procurement and logistics. 

In other words, SCE’s can develop a supply chain model for a new product.  It wouldn’t just be a production plan or a distribution plan.  It would be a comprehensive supply chain road-map that would synchronise the procurement of materials, production of goods, and inbound & outbound logistics.  Such a road-map would even cover after-sales services such as warranty responses and retrieval of damaged or rejected items. 

An enterprise would stand to benefit a great deal from a supply chain model for a new product.  It would offer the enterprise’s finance team a better forecast of cost and working capital and give enterprise executives a clear crystal ball of how a product would do once it is in the market. 

Making a supply chain model for a new product is not easy but it wouldn’t require re-invention. 

Hernán David Perez, supply chain professional and teacher, developed a “Supply Chain Roadmap” that would answer the question: “which supply chain strategy best fits my business?” (Hernán David Perez, “Supply Chain strategies: Which One Hits the Mark?”, CSSCMP’s Supply Chain Quarterly, https://www.supplychainquarterly.com/articles/720-supply-chain-strategies-which-one-hits-the-mark, 2013 March 06).

Mr. Perez outlined six (6) generic supply chain models enterprises can adopt depending on their industries and strategies.  The six (6) models consist of continuous-flow, efficient, fast, custom-configured, agile, and flexible.   Each has a different focus, from low-cost (efficient) to agile (responsive to uncertain demand).  An enterprise may adopt more than one model, i.e., it may use different models catering to different products or to specific areas of operations. 

The role of the SCE would be to find and propose the right model that would best fit an enterprise’s new product.  Mr. Perez’s six (6) models can be a reference for the SCE to tailor a model for the new product. 

Developing a supply chain model for a new product is similar to managing a project, such as construction of a building.  It starts with the design or what one wants the model to look like and function.  Next would be the detailed plans of the supporting structures such as materials requirements, transportation, storage & handling methods, work crews, procedures & standards, quality assurance methods, and equipment. 

Design and detailed plans are the end objectives, what we want the supply chain model to look like and how it will operate when the new product is launched.  To achieve the end objectives, the supply chain professionals would need to draft the road map, the series of activities to build the structures that make up the supply chain model.  It’s again similar to what project managers do:  a critical path schedule that includes a timeline and the timing of investments in resources.

Implementing a supply chain model involves a lot of uncertainty.  Demand, for starters, would be based on forecast and would no doubt come out much different than expected.  The model should take into account various scenarios.  To put it another way, the supply chain model should be ready to adapt.  It should be quick to react to fluctuating demand such as preparing a customer order & shipping system that quickly notifies supply chain planners to position inventories immediately where they’re needed. 

Costs, quality, and other issues would also likely crop up when a new product goes on line.  Some people would blame it on the “learning curve,” that period of getting accustomed to a new set of activities.  The longer the learning curve, however, the greater the expense and enterprises don’t want to spend too much time and capital for it.  The supply chain model, hence, should also be prepared for changing situations on the ground.  For example, the model should include training of machine operators and warehouse material handlers in regard to a new product’s characteristics and storage requirements.  The model may also include facility designs that allow swift change-overs between product variants (e.g. sizes, colours).

The ideal supply chain model is one that does not only cover for the introduction of a product but it’s future life cycle stages as well.  The supply chain model should incorporate monitoring systems that watch out for trends not only in demand but also in external factors such as commodity prices, freight rates, exchange rates, labour wages, taxes, and trade tariffs.  It should also watch out for disruptions and opportunities which it should be ready to respectively mitigate or take advantage of. 

It isn’t easy to launch a new product.  It’s not simply just having stock ready when it’s time to sell the product.  There are many things to consider if one wants to attain long-term success. 

Every product has its life-cycle.  One has to understand it and make a supply chain model for it in order to ensure its marketing success. 

The best kind of supply chain model is one that is ready to meet the challenges of inevitable change. 

About Overtimers Anonymous

Twelve (12) Things Supply Chain Engineers Do for Enterprises

Supply Chain Engineers (SCE’s) are much like any other engineer.  Just as engineers design, build, and install structures and systems, SCE’s do the same specifically for supply chains. 

Supply chain engineers shape the networks, processes, and systems that underlie product and service streams.  Their projects are either big and small.  Project scopes can range from setting up a whole new distribution network to the simple improvement of inspecting inbound materials at a receiving dock. 

Most supply chain managers try to solve their operations’ problems by themselves.  If a customer order was undelivered because there was no room on a delivery truck, the manager would find another truck to load and ship the ordered items.  But if the manager observed that pending orders were accumulating and it’s because demand is outstripping trucking capacity, he’d ask truckers to just get more trucks.  He wouldn’t realize that an SCE can determine the best transport asset mix and routing system instead of having more trucks a freight provider will eventually charge to the enterprise.  Without SCE’s, supply chain managers often patch problems with band-aid solutions. 

SCE’s offer an engineering expertise that go beyond the scope of supply chain management.  They synchronise the interconnecting links of supply chains by designing, building, and implementing systems, facilities, devices and processes that would sustain the productive flow of goods, services, and data.  To put it another way, SCE’s bring about supply chains that run reliably at lowest cost and at best quality and service for enterprises and customers. 

SCE’s do a number of tasks that help enterprises with their supply chains.  The following are twelve (12) examples:

  1. Map Supply Chains. SCE’s can lay out the flows of supply chains and make visible the nitty-gritties of an enterprise’s operations, including the processes involving vendors and customers.  Supply chain maps are instrumental in identifying weak points along product and service streams;
  2. Set Up Monitoring Systems. SCE’s can set up systems that would show what’s going on in supply chains as well as alert managers of impending disruptions.  SCE’s can create dashboards that would show key data about supply chain operations, such as status of imports, inventories, pending orders, losses, and scheduled deliveries;
  3. Customise Order-to-Delivery. SCE’s can tailor order fulfilment systems for companies depending on their industries and customer service strategies;
  4. Propose Supply Chain Models for New Products.  SCE’s can design supply chain models for new or relaunched products and services;
  5. Balance Operations to Synchronise Flow. SCE’s can devise systems that synchronise the flow of merchandise from vendors to enterprise to customers.  It is an SCE’s aim to streamline flow to minimize waste in waiting times and work-in-process inventories;
  6. Implement Statistically Based Process Control Systems. SCE’s can implement systems that minimize variability, what some would call statistical control.   At the same time, SCE’s can tweak operational capabilities to churn products and services consistently for quality assurance;
  7. Study Feasibility of Projects. SCE’s can study the feasibility of capital expenditure projects via their expertise in engineering economics and evaluate options to determine which would provide the best rates of returns;
  8. Introduce Ideas to Spread Inventories.   SCE’s can develop inventory planning methods that would spread product stocks along various points of the supply chain which would lead to better customer service and minimal working capital;
  9. Design Operations That Adapt to Supply & Demand Variability. SCE’s can plan and lay out work-place operations that would be flexible to fluctuating merchandise volumes;
  10. Determine Supply Chain Capacities and Baseline Efficiencies.  SCE’s have the technical prowess to compute supply chain operational capacities and efficiencies, whether they be machine, labour, or logistics-related. 
  11. Find the Best Method to Maintain Fixed Assets. SCE’s can evaluate what would be the best maintenance program for the supply chain’s equipment, facilities, and logistical infrastructure.   
  12. Develop Frameworks to Support Collaboration.  SCE’s can help enterprises set up support structures to collaborate better with vendors and customers.  These range from simple communication protocols such as mobile messaging of purchase order status to shared networks and methods for vendor-managed inventories and customer inventory replenishment;

These tasks may sound familiar to industrial engineers.  That’s because they are from industrial engineering.  Supply Chain Engineering is an offshoot of Industrial Engineering in that both share the same purpose:  finding ways to continuously improve productivity.    

Whereas IE’s traditionally work within the confines of an enterprise, SCE’s look at the entirety of supply chains. SCE’s judge their work in the context of supply chains. SCE’s seek beneficial value for all stakeholders along the supply chain from vendors to customers, from in-house departments to 3rd party providers. SCE’s strengthen the interdependencies that exist in supply chains.

Supply Chain Engineers build supply chains.  They do what engineers do but more so for supply chains.  SCE’s have the abilities to do a number of things that would benefit enterprises. 

SCE’s are a new breed of industrial engineers and they have a lot to offer.  It is hoped enterprises will welcome their opportunity to contribute.    

About Overtimers Anonymous

A Letter to All Industrial Engineers: Time to Rise Up

Dear Industrial Engineer:

          I come to you as a fellow Industrial Engineer (IE) with a message.

          It’s time for us to rise up.

          For years, or should I say decades, Industrial Engineering (IE) has been an un-recognized engineering discipline. 

          Many engineers—e.g. civil, mechanical, chemical, electrical—look at us as fakes. 

          Industrial Engineers (IEs) aren’t recognized as technically proficient builders or problem solvers at par with other engineering disciplines.  Even if many of us have professional licenses issued from places like the United States and Europe, we are not respected in many parts of the world.

          Most enterprises and organisations see us as more of management professionals than engineers.  They perceive the specialized courses we take, such as time & motion studies, operations research (OR), facilities planning and inventory systems modelling, as management subjects than technical specializations.  This is despite the fact that we are educated in advanced mathematics and sciences such as calculus, chemistry, and physics, and in engineering courses such as statics & dynamics, materials science, and electrical systems. 

          We are competent in reading and drafting engineering drawings and many of us know how to operate equipment like lathes, drills, presses, and milling machines.  We specialize in advanced statistical models such as linear/non-linear programming, queuing theory, and transportation algorithms. 

          Despite our engineering prowess, very few understand what IEs do.  We ourselves don’t have a clear picture of what Industrial Engineering is.  We’re always finding ourselves struggling to explain what IE is to our peers, co-workers, friends, and fellow family members. 

          The problem is with the title itself.  What does the “Industrial” in Industrial Engineer mean anyway? 

          People know what a civil, chemical, mechanical, or electrical engineer is just by the titles.  But with Industrial Engineer, we have to explain it and most, if not we, still wouldn’t get it. 

          True, many of us IEs, thanks to our training and experience, have successful careers.  Many of us have become top-notch executives and well-off entrepreneurs. 

          It would be nice, however, if we could just have a little more recognition and apply what we know as IEs.  And this is exactly what this letter is all about. 

          We are in the midst of the worst crisis to hit the globe since World War II.  The COVID-19 disease has ravaged communities and brought economies to a standstill.  Enterprises and individuals have lost earnings and incomes as people get sick or are forced to stay home.  Many products are in short supply as manufacturing and logistics facilities have become undermanned or short of materials.  Border closings have delayed or stopped deliveries altogether. 

COVID-19 is the latest and the worst in a series of adversities that has befallen supply chains.  It isn’t the first and it will not be the last.

          Year after year, adversities ranging from natural disasters, cyber-data malware, and trade tariffs have made life difficult for supply chains.  From the September 11, 2001 terror attacks to the climate change crisis, adversities have been buffeting businesses and societies.  They come small but frequently (as in daily traffic jams) or big and infrequently (such as typhoons).   They can come in the form of interruptions (e.g. power failure) or as a man-made business trend (e.g. a new mobile app that makes obsolete traditional package deliveries). 

          As supply chains have become global and more sophisticated, they have become more and more sensitive to adversities.  The challenge to supply chain productivity, and to enterprise survival, is very real. 

          We as IEs are in the best position to deal with adversities.  We have the expertise, the talent, and the tools. 

          For example, amid the crisis of COVID-19, we as IEs can help hospitals reduce wait times for patients via our knowledge of Operations Research (OR).  We can set up forecasting and inventory models to assist hospitals to avoid out-of-stock incidences for medical equipment and supplies.  We can help in improving schedules and reducing wastage in medicines and supplies. 

          When it comes to supply chains, we have the capabilities to analyse and improve the flow processes of materials and merchandise.  We are the experts in optimizing methods and in boosting the productivity of supply chain operations. 

          Before anything else, however, we need to upgrade our identity.  We should stop calling ourselves Industrial Engineers.  It’s too vague. 

          We should instead start calling ourselves Supply Chain Engineers.  Just as with other engineering titles, we need to be recognized quickly for what we do by what we call ourselves.   

          Because supply chains are at the core of global business, it’s time we see ourselves as Supply Chain Engineers.  We can build them, we can improve on them, and we can make them risk-averse and world class. 

          We have evolved and we should continue to do so.  Industrial Engineer as a title belongs to a time when manufacturing was prominent.  Today in the 21st century, supply chains are prominent.  Whether it be in products or services, there will be supply chains.  And we have the means, the skills, and the talent that earns us the title as Supply Chain Engineers. 

          The COVID-19 pandemic has demonstrated the vulnerability of supply chains.  It also has demonstrated the potential value of our vocation as Supply Chain Engineers. 

          We have the ability to change the world for the better.   We are Supply Chain Engineers.   We can make supply chains resistant to present and future adversities and deliver world-class productivity to the enterprise. 

          We have the power and we have the responsibility to demonstrate that power.

          Let’s show them what we got.    

About Overtimers Anonymous

The World Needs Supply Chain Engineers

Not leaders.  Not managers.  Not business executives.  We have plenty of leaders, both real and wannabes.  Managers and executives too; we have enough. 

We need supply chain engineers. 

The global supply chain is a present-day 21st-century reality.  We get much of our goods from all over the world.  We buy shoes from Europe to sell in America.  We ship rice to Australia and import minerals in return.  We travel to trade and we negotiate with our tablets and mobile phones. 

E-commerce has expanded the reach of supply chains.  We order and pay via the Internet.  More and more enterprises deliver door-to-door, business-to-business, person-to-person.  Transportation’s new normal is multi-modal: airplane-to-van, van-to-vessel, vessel-to-truck, truck-to-motorcycle.  Ordinary people ferry food and merchandise to homes as much as courier companies deliver packages to businesses. 

There is so much room for improvement that supply chain management has become a high-profile career choice.  But this is not a promotional message for supply chain management; this is a call for action.  Supply chains are facing challenging adversities and supply chain management, as is, is no longer capable to deal with them. 

Supply chain engineering is the “application of scientific and mathematical principles” for the design and synchronization of highly complex supply chain operations.  It is a field the world needs to synchronize supply chain operations and networks.    

It’s not only because supply chains have so much room for improvement.  It’s also because adversities have become too significant to ignore.  The adversities, which some may classify as supply chain risks, are real. 

Adversities in recent years have caused plenty of pain to supply chains.  They’ve disrupted transport, caused shortages of critical raw materials, and brought widespread inefficiencies.  As much as they’ve been manageable, the adversities are not getting any fewer.  In fact, they’re getting more disruptive and threatening.  To an extent, they can shut down supply chains and cause not only economic failure but also society chaos.  The most prominent example of this is the COVID19 virus pandemic. 

Just as we need doctors to deal with disease, we need engineers to deal with supply chain disruption.  Management as a profession and talent is no longer enough because management is only about planning, organising, directing, and controlling.  We need engineering, that is, we need to have people with skills to design and install systems, networks, and methods to synchronize and integrate the various supply chain operations and make them adversity-resistant. 

We need problem solvers that can define problems before they happen.  Anticipating adversity and mitigating it, if not overcoming it, are the key tasks of the supply chain engineer. 

Where can we find supply chain engineers? 

They’re closer than you think

Where are the Supply Chain Experts?

Supply chain managers are noticeably invisible amid the COVID-19 crisis.

There have been no supply chain executives standing beside national leaders as they made speeches and announcements.

There have been rarely any interviews with supply chain experts about how to deal with shortages of food and difficulties in transportation.  If there were, much of whatever was said had been largely ignored.  

A lot of people have viewed the coronavirus disease, COVID-19, as a medical problem requiring a medical solution, i.e., hospitalization, quarantine, finding a cure.  As much as it is a medical issue, it is more of a problem that needs a social solution. Such a solution needs four (4) things:

  1. convincing everyone to re-align their lifestyles to that of good hygiene, sanitation, avoidance of unnecessary travel & physical contact, and healthy living;
  2. rapid segregation and isolation of suspected infected individuals;
  3. boosting capacities of facilities and mobilization of medical personnel;
  4. synchronising supply chains to stockpile and deliver inventories of essential items such as medical equipment, parts, supplies, food, water, fuel, and other essential goods.

Many countries did the first two, (a) & (b), many are scrambling with difficulty to do (c), and as for (d), it has been a nightmare of shortages and desperation. 

Supply chains are overwhelmed amid the COVID-19 pandemic.  Business firms and organisations are fending for themselves.  There is no united front, no coalitions formed.  There is no high-profile leadership to rally the logistics and manufacturing industries.  Countries aren’t cooperating with each other; how could one therefore expect enterprises to do the same? 

Despite the strides in bringing supply chain talent to corporate board rooms, many executives both in business and government have not engaged the supply chain professionals in the fight versus COVID-19.  Instead, the supply chain experts are relegated to the side-lines, sweating away somewhere untying bottlenecks and moving merchandise as fast as they can to where they are needed the most.   

Many enterprises only see supply chains as networks working within the boundaries of their respective businesses and not as continuous lines of flow of materials and merchandise that cross from one enterprise to another as they accumulate in value from one point to the next: from mines & farms, to factories & warehouses, to stores & e-commerce cross-docks, and finally to users & consumers. 

As much as executives may justify confining supply chain management within imaginary boundaries as a means to foster their respective enterprises’ competitive advantages, there is great potential in designing supply chain systems and networks that synchronise the streams of products, information, and capital from the sources to customer’s shelves. 

This is made more apparent with supply chains becoming more vulnerable to adversities such as COVID-19. 

Adversities are those that disrupt the routines and flows of operations, particularly supply chains.  Adversities come in different forms, degrees, shapes, and sizes.  They are never the same from one to the next (similar, maybe, like with typhoons but different in that typhoons never follow the exact same path with the exact same intensity of wind & rain).

Because supply chains have stretched themselves to the four corners of the world, they have become more susceptible to varying adversities.  Global supply chains are spread thin; their links ever more sensitive to disruption and change.

As supply chains have become global, supply chain management, however, has remained local.  As mentioned, enterprise owners are reluctant to collaborate and link with vendors and customers for fear of compromising their competitive positions.  Hence, there’s no overall organized effort to synchronize because there’s no strategy or structure for such in the first place. 

The COVID-19 pandemic has shown that supply chains can’t function productively without synchronisation.  And it has also shown that societies suffer when supply chains become adversely unproductive. 

How do we synchronise supply chains to make them if not keep them productive? 

The answer is not in management.  It’s in engineering

We Need a Playbook and It’s the Last Thing We Need

Many enterprises and countries around the world have playbooks to deal with pandemics such as COVID-19.  These range from ISO standards and those based on the United States’ Occupational Safety & Health Administration (OSHA), Center of Disease Control & Prevention, and even the US Army Medical Research Institute of Infectious Diseases (USARMIID).   

But as much as present-day playbooks may have protocols for pandemics, they don’t have any for supply chains.  Enterprises and governments may have response plans such as quarantines and allocations of resources for medical facilities & personnel; there wouldn’t be any, however, for cross-border supply chains.

Why is that?  Because global supply chains have become prominent only in recent years.  Governments and many enterprises still manage supply chains as if they exist only within their borders and factories. 

Global supply chain relationships are mostly in the form of contracts with vendors and 3rd party providers.  Most of the links, from the sources, to the transportation, to the storage & deliveries are siloed, that is, they’re autonomous and overseen separately.  Collaborations and interactions are mostly done between individual representatives such as between sales agents and purchasing personnel. 

With no real connection, there is no protocol, and therefore no synchronisation that can overcome widespread disruptions from adversities such as what has happened from COVID-19.  Every link on the supply chain is actually vulnerable to whatever form of adversity, more so a global pandemic.

If enterprises can synchronise (some people call it integrate) their supply chains, then there would be a united front versus any adversities.  Enterprises would be able to adapt together.  Goods would keep moving.  People will get their products.  Economies would remain stable.    

Playbook protocols and procedures, however, are the last thing supply chains need.  Synchronising supply chains requires several things first: 

  1. Management commitment;
  2. Establishing comprehensive policies and strategies;
  3. Setting objectives and performance measures;
  4. Designing structures and systems to support the strategy;

Many enterprises have embraced (1), (2), and (3).  Many have not been fully successful with (4).  This is because many enterprises have trouble finding the talent to do (4). 

Doing (4) is an engineering effort.  It requires talent that will be sought for because before enterprises can sync their supply chains, they’ll need to engineer their networks to establish the links. 

Only then can enterprises rewrite their playbooks and prepare for the next pandemic and whatever adversity that comes their way.