Global Supply Chain Strategy and Strategic Alignment

Introduction

Global supply chains are not merely systems for moving products from suppliers to customers. They are strategic networks through which firms obtain resources, create value, manage risk, compete across markets and fulfil customer promises. A supply chain may include raw-material providers, contract manufacturers, logistics service providers, distributors, retailers, digital platforms, regulators and final customers located in several countries.

The strategic challenge is not to design the fastest, leanest or most global supply chain in isolation. It is to design a supply chain whose capabilities match the organisation’s competitive strategy and the requirements of its target customers. A supply chain that is excellent for a predictable, low-cost commodity may be unsuitable for fashion products, emergency medical supplies or customised industrial equipment.

Strategic alignment therefore concerns the consistency among four elements:

1. the organisation’s business strategy;
2. its customer value proposition;
3. its competitive priorities; and
4. the structure and capabilities of its supply chain.

Misalignment creates predictable consequences. A firm promising rapid customisation but relying on long, inflexible offshore production may experience stockouts and lost sales. A firm selling highly standardised products may incur unnecessary cost through excessive product variety and premium transportation. Strategic supply chain management seeks coherence between what the firm promises and what the network can reliably deliver.

Learning Objectives

After studying this chapter, the learner should be able to:

• explain strategic alignment and the principle of strategic fit;
• connect customer value propositions with supply chain capabilities;
• distinguish efficiency, responsiveness and resilience as strategic priorities;
• apply push–pull, lean, agile and leagile supply chain concepts;
• evaluate the Triple-A supply chain framework;
• segment products, customers and supply chains according to strategic requirements;
• analyse trade-offs in global network design; and
• recommend an aligned supply chain strategy in a practical business situation.

1. From Business Strategy to Supply Chain Strategy

Business strategy specifies how an organisation intends to create and sustain competitive advantage. It may compete through low cost, superior quality, innovation, speed, reliability, sustainability, service or a combination of these. Supply chain strategy translates those priorities into decisions about sourcing, manufacturing, inventory, transportation, information, facilities, relationships and governance.

A useful hierarchy is:

Strategic alignment does not mean that every function purses identical objectives. Procurement may seek lower purchase prices, manufacturing may seek stable schedules and logistics may seek high utilisation. Alignment means that functional decisions collectively support the customer and business proposition rather than optimising one activity at the expense of total value.

Customer value propositions

A customer value proposition describes the benefits promised to a target segment relative to the sacrifices required from that customer. Important dimensions include:

• cost or price: affordability and total cost of ownership;
• quality: conformance, performance, durability and safety;
• availability: probability that the product is in stock when required;
• speed: elapsed time from order to delivery;
• reliability: delivery at the promised time and quantity;
• variety: breadth of models, configurations or options;
• customisation: ability to meet individual requirements;
• convenience: ease of ordering, receiving and returning; and
• sustainability: environmental and social performance.

A value proposition must be operationally credible. “Same-day delivery” requires inventory positioning, fulfilment capacity, accurate information and dependable last-mile logistics. “Lowest total cost” may require a different design, such as consolidated transportation, standardised products and efficient replenishment.

Competitive priorities and trade-offs

Competitive priorities are the attributes on which customers compare alternative offerings. Traditional supply chain analysis often presents cost and responsiveness as opposites. The relationship is more nuanced. Some investments, such as better information quality, can improve both cost and responsiveness. However, structural trade-offs remain: holding inventory in multiple locations can increase availability and reduce response time but also increases working capital, obsolescence and handling costs.

Managers should distinguish between:

• order winners, which persuade a customer to choose one supplier;
• order qualifiers, which are minimum requirements for consideration; and
• hygiene factors, whose absence causes dissatisfaction even if their presence does not create differentiation.

For an online grocery retailer, accurate delivery windows may be an order qualifier, while product freshness and substitution quality may be order winners. Supply chain resources should be concentrated on the attributes that matter most to the target segment.

2. Strategic Fit and the Alignment Process

Strategic fit is achieved when the supply chain’s capabilities are consistent with the uncertainty and requirements of the market it serves. The concept is associated with the alignment of market demand characteristics and supply chain responsiveness.

A practical alignment process has six stages:

Stage 1: Identify target segments

Customers should not be treated as a homogeneous market. Segment them by service expectations, order patterns, profitability, urgency, product complexity and willingness to pay. Geographic markets may also differ in infrastructure, regulation, culture, purchasing power and risk exposure.

Stage 2: Define demand characteristics

The organisation should assess demand volume, variability, seasonality, forecastability, product life cycle, required lead time and the cost of a stockout. Demand uncertainty is not identical to demand volume. A high-volume product may be stable and predictable, while a low-volume product may be highly uncertain and expensive to serve.

Stage 3: Assess supply characteristics

Supply uncertainty arises from unreliable suppliers, long lead times, capacity constraints, geopolitical exposure, quality problems, raw-material scarcity and transportation disruption. Supply risk can be analysed separately from demand risk because the appropriate response may differ.

Stage 4: Select required capabilities

The firm identifies the necessary balance of efficiency and responsiveness. Capability choices may include flexible capacity, strategic inventory, multiple sourcing, postponement, local fulfilment, digital visibility, supplier development or premium transport.

Stage 5: Configure the network

Facilities, suppliers, modes of transport, information systems and decision rights are arranged to deliver the required capabilities. Network design should consider total landed cost and risk, not only unit purchase price.

Stage 6: Measure and revise

Strategic fit is dynamic. Customer expectations, technology, regulations, competitors and geopolitical conditions change. Firms should periodically test whether the network still supports the value proposition.

The efficiency–responsiveness spectrum

An efficient supply chain seeks to eliminate waste, reduce total cost, improve asset utilisation and provide dependable standardised processes. A responsive supply chain seeks to react rapidly to changes in demand, product design, supply conditions or customer requirements.

Neither orientation is universally superior. The correct choice depends on the value proposition and the economics of the product-market combination.

3. Push, Pull and the Customer Order Decoupling Point

A push system makes production or replenishment decisions primarily from forecasts. Products move toward the market before a specific customer order is received. Push systems can exploit economies of scale, but forecast error may produce excess stock or shortages.

A pull system authorises activity in response to actual demand or consumption. Pull reduces unnecessary production and can improve inventory discipline, but it requires dependable information, adequate process capability and sufficient capacity to respond.

Most global supply chains are hybrid. The boundary between forecast-driven and order-driven activity is the customer order decoupling point or order penetration point. Activities before the point are generally push-oriented; activities after it are triggered by a customer order.

Examples include:

• make-to-stock: finished goods are produced before orders;
• assemble-to-order: components are stocked and final configuration follows an order;
• make-to-order: production begins after an order;
• engineer-to-order: design and production are initiated for a specific customer.

Moving the decoupling point upstream toward suppliers can increase customisation and reduce finished-goods variety, but it may increase customer lead time. Moving it downstream toward the customer can shorten delivery time but requires more finished inventory and accurate forecasts.

The appropriate position depends on product modularity, demand uncertainty, postponement feasibility, customer tolerance for waiting and the cost of inventory.

4. Lean, Agile and Leagile Supply Chains

Lean supply chains

Lean supply chain management applies principles associated with the elimination of waste and the creation of smooth, reliable flow. Waste includes excess inventory, waiting, unnecessary movement, defects, overproduction, over-processing and avoidable transport. Lean systems commonly use standard work, supplier development, smaller lot sizes, preventive quality management, visual controls and continuous improvement.

Lean is most effective when demand is relatively stable, product variety is manageable and processes are capable and repeatable. Lean should not be confused with simply carrying minimal inventory. Removing all buffers from a fragile system can increase disruption costs. The purpose is to remove non-value-adding activity while retaining buffers that protect critical service or safety requirements.

Agile supply chains

Agility is the ability to respond rapidly and economically to volatile demand, short product life cycles, unexpected supply changes and customer-specific requirements. Agile supply chains use flexible production, postponement, modular designs, rapid information sharing, cross-trained employees, responsive suppliers and adaptable logistics.

Agility is particularly important in fashion, high-technology products, emergency healthcare, spare parts and markets affected by rapid innovation. It generally requires investment in flexibility and may therefore cost more than a highly standardised system.

Leagile supply chains

A leagile supply chain combines lean processes where demand and operations are predictable with agile processes where uncertainty is high. The decoupling point is strategically selected so that upstream activities achieve efficiency while downstream activities retain responsiveness.

For example, a laptop manufacturer may produce common components in efficient global facilities, hold them in semi-finished form and configure the final product close to the customer after receiving an order. Similarly, a clothing company may manufacture basic fabric efficiently but postpone colour and style decisions until market signals become clearer.

Leagility requires disciplined segmentation. Applying agility to every product creates unnecessary cost; applying lean methods to volatile products creates service failures.

5. The Triple-A Supply Chain

Lee’s Triple-A framework identifies three capabilities associated with effective supply chains: agility, adaptability and alignment.

Agility

Agility is the ability to respond quickly to short-term changes in demand or supply. It is supported by rapid information, flexible capacity, collaborative planning, backup options and fast decision-making. Agility is not simply speed; it is speed with commercial and operational viability.

Adaptability

Adaptability is the ability to adjust the supply chain structure as markets, technologies, regulations and business models change. An adaptable firm may redesign its supplier base, alter production locations, enter new channels or modify product architecture. Adaptability is a longer-term capability than agility.

Alignment

Alignment means that supply chain partners share incentives, information, responsibilities and performance objectives. A manufacturer cannot achieve alignment if a retailer rewards suppliers solely for low unit cost while simultaneously demanding extreme variety, short lead times and high availability without compensating for those requirements.

Alignment can involve:

• shared demand and inventory information;
• coordinated planning and replenishment;
• transparent cost and service assumptions;
• contracts that allocate risk fairly;
• common sustainability expectations; and
• joint problem-solving and investment.

The Triple-A framework is valuable because it challenges a narrow focus on cost. A low-cost network that cannot adapt, respond or collaborate may be strategically weak.

6. Supply Chain Segmentation

Supply chain segmentation is the deliberate design of different policies for products, customers, channels, markets or suppliers rather than applying one policy to the entire portfolio.

Product segmentation

Products may be segmented by demand predictability, margin, criticality, lifecycle, volume, lead time and substitution risk. A stable, high-volume product may be produced in long runs and replenished through economical transport. A high-margin, volatile product may require postponement and responsive capacity. A critical spare part may justify local stock even when demand is low.

Customer segmentation

Customer segments may differ in willingness to pay, order frequency, service expectations, strategic importance and cost to serve. A strategic industrial customer may receive collaborative planning and dedicated inventory, while a small transactional customer may be served through a standard catalogue and delivery proposition.

Segmentation must be economically and ethically defensible. It should not create discriminatory access to essential goods or conceal service restrictions. In healthcare, for example, allocation policies must reflect clinical priority and regulatory requirements rather than only profitability.

Channel and geographic segmentation

Direct-to-consumer, retail, wholesale and marketplace channels often require different order profiles, packaging, fulfilment and return processes. Geographic segmentation should consider customs requirements, infrastructure reliability, local content rules, taxes, labour conditions and political risk.

A practical segmentation matrix

A segmentation programme should be reviewed periodically. Products can migrate between segments as they mature, competition changes or customer expectations evolve.

7. Global Network Design and Strategic Trade-offs

Globalisation can provide access to lower-cost labour, specialised capabilities, raw materials, markets and scale. It can also increase lead times, inventory in transit, coordination complexity, exposure to currency movements, regulatory variation, geopolitical disruption and environmental impact.

Key design decisions include:

• global, regional or local sourcing;
• single, dual or multiple sourcing;
• centralised versus distributed inventory;
• ownership versus outsourcing;
• postponement and late-stage customisation;
• modal and route selection;
• supplier location and development;
• production capacity and redundancy; and
• ownership of data and decision rights.

The lowest purchase price is not necessarily the lowest total cost. A total landed cost view may include purchase price, freight, insurance, duties, handling, inventory carrying cost, quality failures, delay, carbon cost and expected disruption loss.

A simple expected-cost representation is useful for strategic comparison:

In conventional notation:

where E(C) is expected total cost per relevant period, C_r is routine operating cost, p_d is the probability of a specified disruption during that period, and C_d is the loss if the disruption occurs. The expression is a simplified decision-support model. It assumes a single disruption category, a meaningful estimate of probability and loss, and additive costs. It should not replace scenario analysis when disruptions are correlated, repeated or difficult to quantify.

A more expensive supplier may be economically justified if it materially reduces disruption exposure or improves quality and responsiveness. Conversely, excessive redundancy can destroy competitiveness if the risk reduction is insignificant relative to the cost.

8. Performance Measurement for Strategic Alignment

Measures should reflect the value proposition and expose trade-offs. Common dimensions include:

• customer order cycle time;
• on-time-in-full delivery;
• forecast accuracy;
• order fulfilment and stockout rates;
• total landed cost;
• inventory turns and days of supply;
• cash-to-cash cycle time;
• supplier quality and lead-time reliability;
• capacity flexibility;
• carbon emissions and waste; and
• disruption recovery time.

No single metric is sufficient. For example, inventory turns may improve while service declines. Transport cost per unit may fall while total emissions and stockout costs rise. Balanced scorecards should connect operational measures to strategic priorities.

The cash-to-cash cycle is often expressed as:

The terms are measured in days. The metric estimates the time between cash paid to suppliers and cash received from customers. It is useful for working-capital analysis, but it does not by itself measure service, resilience or ethical performance. A firm should avoid improving the metric by transferring excessive risk to financially weak suppliers.

9. Technology, Data and Decision Governance

Digital technologies can strengthen strategic alignment when they improve decision quality rather than merely increase data volume. Relevant applications include:

• integrated planning platforms;
• electronic data interchange and application programming interfaces;
• supply chain control towers;
• internet-of-things tracking;
• digital twins for scenario analysis;
• artificial intelligence for demand sensing and exception management; and
• distributed ledgers for selected traceability applications.

Artificial intelligence may identify demand patterns, classify exceptions or recommend inventory decisions. However, algorithmic recommendations depend on data quality, model assumptions and governance. Historical data may encode bias, omit informal transactions or fail to represent rare disruptions. Human accountability remains necessary for decisions affecting safety, employment, supplier treatment and access to essential products.

Good governance includes data ownership, access controls, cybersecurity, model validation, audit trails, escalation rules and clear responsibility for decisions. Digital visibility is not the same as strategic alignment. A firm can observe a problem in real time and still lack the capacity, authority or supplier relationship needed to resolve it.

10. Ethical, Regulatory and Sustainability Considerations

Global supply chain strategy has consequences beyond financial performance. Strategic decisions may affect labour rights, community welfare, public health, privacy, emissions and resource consumption.

Important responsibilities include:

• conducting human-rights and modern-slavery due diligence;
• preventing forced and child labour;
• protecting worker health and safety;
• complying with customs, trade sanctions, product safety and data-protection rules;
• ensuring responsible sourcing of minerals and high-risk materials;
• reducing greenhouse-gas emissions and waste; and
• maintaining truthful sustainability claims.

Sustainability should be integrated into network design rather than treated only as reporting. Product durability, repairability, reverse logistics, packaging, transport mode and supplier energy sources all influence supply chain impact. Regulatory requirements increasingly demand traceability and evidence, making reliable data and supplier engagement strategically important.

11. Illustrative Case: Meridian Outdoor Equipment

Background

Meridian Outdoor Equipment is a fictional manufacturer of hiking jackets sold through specialist retailers and an online channel. Its basic jackets generate stable demand and compete mainly on price and durability. Its technical jackets use innovative fabrics and colour combinations, have short market windows and attract customers willing to pay for new designs.

The firm currently manufactures all products in one overseas facility using six-month forecasts. Finished goods are shipped by sea to a central European distribution centre. Forecast errors have produced excess inventory of unpopular colours, while popular technical jackets are frequently unavailable during the peak season. Expedite shipments protect sales but reduce margins and increase emissions.

Problem

Meridian’s single supply chain design is being applied to two fundamentally different product groups. The basic range requires efficiency and dependable replenishment. The technical range requires responsiveness, variety and protection against forecast uncertainty.

Analysis

The basic range has relatively stable demand, predictable materials and a long product life. It is suitable for a lean, forecast-supported process with economical transport and consolidated inventory.

The technical range has uncertain demand, rapid design change and high stockout cost during a short selling season. It requires agile and leagile capabilities. The firm should not attempt to forecast every final product configuration six months in advance.

Approach and solution

Meridian adopts a segmented strategy:

1. Common materials and components are sourced through a small group of qualified suppliers under collaborative agreements.
2. Basic jackets continue to use efficient offshore production and sea transport, with replenishment based on stable demand data.
3. Technical jackets use modular designs and postpone final colour or trim decisions where feasible.
4. A regional finishing partner is added for late-season configuration and rapid replenishment.
5. Selected high-margin technical components are held in semi-finished form rather than as completed jackets.
6. Retailers and the online business share sell-through information, with clear data definitions and exception alerts.
7. Performance is measured using availability during the selling window, full-price sell-through, total landed cost, expedited freight, inventory ageing and emissions.
8. Supplier contracts include quality, labour, traceability and continuity requirements rather than only unit-price targets.

Outcome

In this illustrative case, the redesigned model reduces dependence on long-range forecasts for volatile products while preserving low-cost production for stable products. The firm accepts some additional regional capacity and information-system cost in exchange for lower markdowns, fewer emergency shipments and improved availability of technical jackets.

Learning points

The case demonstrates that strategic alignment is portfolio-specific. A single company may need lean, agile and leagile processes simultaneously. Postponement is valuable only when products are modular, finishing capacity is available and customers tolerate the resulting process. Segmentation must be supported by differentiated metrics and governance; otherwise the organisation may revert to a single cost-focused policy.

12. Common Implementation Challenges and Best Practices

Common challenges

• functional managers may optimise local targets rather than total value;
• sales forecasts may be treated as commitments rather than uncertain estimates;
• supplier relationships may be transactional despite interdependence;
• cost reductions may undermine resilience, quality or labour standards;
• data may be inconsistent across firms and countries;
• segmentation may become too complex to execute;
• organisations may invest in technology without changing decisions; and
• leadership may demand both maximum efficiency and unlimited responsiveness without recognising trade-offs.

Best practices

First, begin with the customer promise and translate it into measurable service requirements. Second, segment products, customers and risks before selecting supply chain policies. Third, evaluate total cost, working capital, resilience, sustainability and service together. Fourth, place the push–pull boundary deliberately and revisit it as products mature. Fifth, build collaborative relationships with strategically important suppliers. Sixth, use scenario planning to test geopolitical, climate, transport and demand disruptions. Finally, establish governance that gives decision-makers authority to act on information.

Chapter Summary

Global supply chain strategy is the design and governance of a network that supports the organisation’s competitive strategy and customer value proposition. Strategic fit exists when market requirements, competitive priorities and supply chain capabilities reinforce one another.

Efficient supply chains emphasise cost, stability and waste reduction, while responsive supply chains emphasise speed, flexibility and adaptation. Push systems rely mainly on forecasts, pull systems respond to actual demand, and hybrid systems position a customer order decoupling point between the two. Lean methods are appropriate for predictable processes; agile methods address volatility; and leagile designs combine both through segmentation and postponement.

The Triple-A framework highlights agility, adaptability and alignment. Supply chain segmentation enables different policies for stable, seasonal, volatile and critical products. Global network decisions must consider total landed cost, disruption exposure, sustainability and ethical obligations rather than purchase price alone. Digital technologies can improve visibility and analysis, but they require data governance, cybersecurity and human accountability.

The central managerial principle is coherence: the supply chain should be designed around what the organisation promises, what customers value and what risks the network must withstand.

Key Terms

Strategic fit: Consistency between market requirements, business strategy and supply chain capabilities.

Customer value proposition: The benefits and experience promised to a defined customer segment.

Competitive priority: An attribute such as cost, quality, speed or reliability on which customers evaluate suppliers.

Order winner: A characteristic that persuades a customer to select one supplier over another.

Order qualifier: A minimum requirement for a supplier to be considered.

Supply chain responsiveness: The ability to react rapidly to changes in demand or supply.

Supply chain efficiency: The ability to deliver required value with minimal resource consumption and waste.

Push system: A system in which forecast-based decisions initiate production or replenishment.

Pull system: A system in which actual demand or consumption triggers activity.

Customer order decoupling point: The boundary between forecast-driven and customer-order-driven processes.

Lean supply chain: A supply chain focused on flow, waste elimination and process discipline.

Agile supply chain: A supply chain designed for rapid and flexible response to uncertainty.

Leagile supply chain: A supply chain combining lean upstream operations with agile downstream response.

Postponement: Delaying final production, configuration or distribution decisions until demand is clearer.

Triple-A framework: The capabilities of agility, adaptability and alignment.

Supply chain segmentation: Designing differentiated supply chain policies for distinct products, customers or markets.

Total landed cost: The full cost of acquiring and delivering a product, including logistics, duties, handling and related costs.

Resilience: The ability to prepare for, absorb, recover from and adapt after disruption.

Strategic alignment: Coordinated decisions across functions and partners in support of business and customer objectives.

Review Questions

Short Answer Questions

1. What is meant by strategic fit in supply chain management?
2. Distinguish an order winner from an order qualifier.
3. What is the customer order decoupling point?
4. State the three capabilities in the Triple-A framework.
5. Why is supply chain segmentation necessary?

Long Answer Questions

1. Explain how a customer value proposition should influence supply chain design.
2. Compare lean, agile and leagile supply chains, including the conditions under which each is appropriate.
3. Discuss the strategic advantages and risks of global sourcing and production.
4. Explain how postponement can improve responsiveness while controlling inventory risk.
5. Evaluate the importance of alignment among supply chain partners, using examples of incentives and information sharing.

Analytical / Application Questions

1. A company sells a stable, high-volume household product and a short-life, highly fashionable product. Design a differentiated supply chain strategy for each and justify your choices regarding production, inventory, transport and information.
2. A low-cost overseas supplier offers a 15% lower unit price but has unreliable lead times and a high disruption exposure. Identify the information required to compare this supplier with a more expensive regional supplier and recommend an evaluation approach.
3. An online retailer promises next-day delivery but experiences stockouts and frequent premium transport. Diagnose the likely strategic misalignment and propose changes using the concepts of segmentation, push–pull design and the Triple-A framework.

Multiple Choice Questions with Answers

Question 1

Which statement best describes strategic fit in a supply chain?

A. Every function uses the same operational target

B. Supply chain capabilities are consistent with market requirements and business strategy

C. The firm always selects the lowest-cost supplier

D. All products are managed through one standard policy

Correct Answer: B. Supply chain capabilities are consistent with market requirements and business strategy

Question 2

Which product is most likely to require an agile supply chain?

A. A predictable staple with stable annual demand

B. A standard fastener used continuously in production

C. A fashion product with a short selling season and uncertain demand

D. A mature commodity with long product life

Correct Answer: C. A fashion product with a short selling season and uncertain demand

Question 3

In a pull system, production or replenishment is primarily triggered by:

A. A long-range forecast alone

B. Actual demand or consumption

C. Supplier capacity utilisation

D. Annual budgeting

Correct Answer: B. Actual demand or consumption

Question 4

What is the principal purpose of a customer order decoupling point?

A. To eliminate all inventory from the supply chain

B. To identify where ownership of a supplier changes

C. To separate forecast-driven activities from customer-order-driven activities

D. To determine the customs duty on an imported product

Correct Answer: C. To separate forecast-driven activities from customer-order-driven activities

Question 5

Which of the following is not one of the Triple-A capabilities?

A. Agility

B. Adaptability

C. Alignment

D. Automation

Correct Answer: D. Automation

Question 6

A leagile supply chain generally seeks to:

A. Use only local suppliers

B. Combine efficient upstream operations with responsive downstream operations

C. Replace all forecasts with inventory

D. Eliminate product variety

Correct Answer: B. Combine efficient upstream operations with responsive downstream operations

Question 7

Which situation most strongly supports postponement?

A. A product cannot be modified after production

B. Demand is perfectly predictable and configuration is irrelevant

C. A product is modular and final configuration can be delayed

D. Customers require immediate delivery of every possible finished variant

Correct Answer: C. A product is modular and final configuration can be delayed

Question 8

Which measure estimates the time between paying suppliers and receiving customer cash?

A. On-time-in-full delivery

B. Cash-to-cash cycle

C. Forecast bias

D. Capacity utilisation

Correct Answer: B. Cash-to-cash cycle

Question 9

Why can the lowest purchase price fail to represent the lowest supply chain cost?

A. Purchase price is always irrelevant

B. Total cost may also include freight, duties, inventory, quality and disruption losses

C. Regional suppliers never have quality problems

D. Global suppliers cannot achieve economies of scale

Correct Answer: B. Total cost may also include freight, duties, inventory, quality and disruption losses

Question 10

Which action best reflects supply chain segmentation?

A. Applying the same inventory policy to every product

B. Using differentiated policies for stable, volatile and critical products

C. Selecting suppliers solely by geographic distance

D. Managing only the highest-volume product

Correct Answer: B. Using differentiated policies for stable, volatile and critical products