Supply Chain Strategy and Competitive Alignment

Introduction

Supply chain management is not merely the movement of materials, products and information. It is a strategic system through which an organisation converts market requirements into customer value. Decisions about suppliers, facilities, inventory, transportation, production, technology and order fulfilment influence whether a firm competes primarily through low cost, speed, availability, quality, flexibility, innovation or reliability.

A supply chain is strategically effective when its capabilities are aligned with the competitive priorities of the business and with the characteristics of the markets it serves. A low-cost grocery retailer, a producer of emergency medical devices and a manufacturer of customised industrial equipment should not use identical supply chain designs. Their demand uncertainty, service expectations, product life cycles, margins, regulatory obligations and appropriate levels of responsiveness are different.

This chapter develops the concept of strategic fit and explains how managers balance efficiency and responsiveness. It examines product and market characteristics, the customer-order decoupling point, postponement, supply-chain segmentation and make-or-buy decisions. It also presents an applied case showing how these concepts can be integrated into a coherent supply chain strategy.

Learning Objectives

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

1. Explain strategic fit and its relationship to competitive strategy.
2. Distinguish efficient, responsive, risk-hedging and agile supply chain designs.
3. Analyse the cost–responsiveness trade-off.
4. Relate product and market characteristics to supply chain capabilities.
5. Identify and evaluate decoupling points and postponement opportunities.
6. Design supply-chain segments for differentiated customer and product requirements.
7. Analyse make-or-buy decisions using strategic, economic and risk criteria.
8. Recommend an aligned supply chain strategy and recognise its limitations.

1. From Business Strategy to Supply Chain Strategy

Business strategy defines how a firm intends to create and capture value. Competitive priorities commonly include:

• Cost: offering an acceptable product at a lower total cost than competitors.
• Quality: delivering conformance, performance, durability and consistency.
• Delivery: providing short lead time, dependable delivery and high availability.
• Flexibility: responding to changes in volume, mix, design or delivery requirements.
• Innovation: introducing new products and processes rapidly.
• Sustainability and responsibility: reducing environmental and social harm while maintaining economic viability.

Supply chain strategy translates these priorities into structural and operational choices. For example, a strategy based on rapid product introductions may require short supplier lead times, modular product architecture, postponement, flexible capacity and rapid information sharing. A strategy based on cost leadership may emphasise high asset utilisation, standardisation, consolidated transportation, long production runs and carefully controlled inventory.

Strategic alignment is not the pursuit of every capability at maximum level. All capabilities consume resources and may conflict. A firm seeking simultaneous lowest cost, instant delivery, unlimited variety and complete customisation may create an economically incoherent system. The managerial task is to identify the service promise that matters to target customers and build the minimum necessary capabilities to deliver it reliably.

1.1 Strategic fit

Strategic fit exists when the supply chain’s capabilities and policies are consistent with:

1. Customer and market requirements—what customers value and how much they will pay for it.
2. Supply chain uncertainty—the unpredictability of demand, replenishment, supply, processes and information.
3. Competitive strategy—the basis on which the firm seeks advantage.
4. Product and process characteristics—including life cycle, variety, value density, perishability and customisation.

Misalignment produces characteristic failures. An efficient, highly utilised factory may be unable to respond to volatile demand. A highly responsive network may carry excessive capacity and inventory for a stable commodity market. A business may advertise customisation while using a supply chain designed for standardised mass production.

A useful test is: What customer promise is the supply chain designed to fulfil, under what uncertainty, at what total cost, and with what risks? The answer should be visible in network design, planning rules, supplier relationships, inventory policies and performance measures.

2. Supply Chain Design Archetypes

Four broad archetypes help managers reason about alignment. They are analytical categories rather than rigid organisational types.

An efficient design is appropriate where demand is predictable and price competition is intense. A responsive design is appropriate for fashion, emergency products, seasonal innovations and other contexts where the cost of lost sales or obsolescence is high. Risk-hedging designs use shared resources or pooled inventory to protect multiple business units against supply uncertainty. Agile designs combine responsiveness with resilience, often through modularity, postponement, multi-sourcing and digital visibility.

These orientations may coexist in one firm. A consumer electronics company may use an efficient upstream component network and a responsive final-assembly and distribution system. This is possible when the supply chain is segmented by product, market or process stage.

3. The Cost–Responsiveness Trade-off

Responsiveness is the ability to meet changing customer requirements in terms of time, volume, mix, location and specification. It is achieved through resources such as spare capacity, flexible labour, expedited transport, local inventory, modular design, supplier flexibility and real-time information. These resources generally increase cost.

Efficiency reduces the resources required per unit through scale, standardisation, high utilisation, long production runs, consolidated shipments and low safety stocks. However, excessive efficiency can increase lead times, reduce flexibility and magnify the consequences of forecast errors.

The relevant decision is not whether cost or responsiveness is desirable. Both are desirable. The decision concerns the appropriate point on the trade-off frontier for a particular customer segment and product family.

A simple total-cost representation is:

where:

• TC = total relevant supply chain cost per period;
• C_p = procurement and production cost;
• C_t = transportation and distribution cost;
• C_i = inventory holding and handling cost;
• C_o = order-processing and information cost;
• C_s = shortage, delay and lost-sales cost;
• C_r = risk, disruption and compliance-related cost.

The equation is a managerial cost model, not a universal accounting identity. Its applicability depends on consistent cost definitions, the same planning horizon and avoidance of double counting. For example, inventory holding cost should not be counted again as a general warehousing cost unless the components are clearly separated.

Responsiveness often increases C_p, C_t or C_i, but may reduce C_s and C_r. Therefore, a more expensive sourcing option can be economically justified if it prevents costly shortages or obsolescence.

For inventory held over a period, a basic holding-cost estimate is:

where I_avg is average inventory in units, v is inventory value per unit, and h is the holding-cost rate per period. The rate should include relevant financing, insurance, deterioration, storage and obsolescence components, expressed for the same period as inventory. The formula assumes a reasonably stable average inventory and a rate that is applicable to the inventory value.

Worked example: comparing a responsive option

A retailer sells 10,000 units per year. A local supplier raises unit procurement and delivery cost by $1.20 but reduces expected shortage and emergency-delivery cost by $18,000 per year. The additional procurement cost is:

10,000 × $1.20 = $12,000.

The net annual benefit is:

$18,000 − $12,000 = $6,000.

Ignoring other differences, the local responsive option is economically preferable. The conclusion would change if the comparison omitted quality failures, supplier risk, working capital or the effect on customer retention. Strategic cost analysis must therefore include total cost and service consequences rather than purchase price alone.

4. Product and Market Characteristics

Supply chain alignment begins with understanding the product and its market.

4.1 Functional and innovative products

Functional products have stable demand, long life cycles, limited variety and relatively predictable replenishment. Examples include basic household consumables and standard industrial fasteners. Efficient supply chains are often suitable because forecast error and obsolescence are relatively low.

Innovative products have short life cycles, high variety, uncertain demand and high margins or high opportunity costs of stock-outs. Examples include seasonal fashion, new electronic devices and rapidly changing medical technologies. Responsive or agile designs are usually more appropriate. The firm may accept higher unit costs to reduce markdowns, missed sales and obsolete stock.

The classification is not permanent. A product may begin as innovative and become functional as the market matures. Supply chain policies should therefore be reviewed across the product life cycle rather than fixed indefinitely.

4.2 Important market and product dimensions

4.3 Uncertainty and the implied demand/supply profile

Demand uncertainty arises from variation in quantity, timing, location, assortment and customer behaviour. Supply uncertainty arises from variable quality, capacity, lead time, geopolitical conditions, transport reliability and regulatory constraints. The appropriate response depends on both.

For example, predictable demand combined with unreliable supply may justify safety stocks, dual sourcing and supplier development rather than highly responsive production. Unpredictable demand combined with reliable supply may justify flexible final assembly and postponement. High uncertainty on both sides is a candidate for an agile design.

5. Decoupling Points and Postponement

The customer-order decoupling point is the stage in the material flow at which a product becomes specifically committed to a customer order. Before that point, activities may be forecast-driven; after it, activities are order-driven. The location of this point strongly affects lead time, inventory risk and customisation.

Common configurations include:

• Make-to-stock: products are completed before orders arrive. Delivery is fast, but finished-goods inventory and obsolescence risk may be high.
• Assemble-to-order: common modules are stocked and final assembly begins after an order. This combines variety with comparatively short delivery time.
• Make-to-order: production begins after the order. Inventory risk is lower, but customer lead time is longer.
• Engineer-to-order: design and production are initiated for a specific customer. Customisation is high and lead times are usually long.

Figure: A postponement design places the decoupling point before final differentiation.

Postponement delays product differentiation, geographic allocation, packaging, labelling or final assembly until better demand information is available. It reduces the number of distinct finished-goods inventories that must be forecast independently. Its success depends on modular product design, process flexibility, adequate information, acceptable finalisation lead time and suitable economics.

Postponement is not automatically beneficial. It may require additional handling, specialised equipment, lower economies of scale or a more expensive final operation. Managers should compare the total cost of postponed and non-postponed designs, including service and obsolescence effects.

A practical postponement analysis asks:

1. Which attributes of the product are common across markets?
2. Which differentiation activities can be delayed without reducing quality?
3. Can common components be stocked more accurately than finished variants?
4. Is final configuration fast enough to meet the customer promise?
5. Can information, skills and capacity be positioned at the postponement point?

6. Supply-Chain Segmentation

A single policy for all customers and products is usually inefficient. Supply-chain segmentation groups products, customers, channels or suppliers according to materially different requirements and assigns differentiated policies to each group.

Segmentation may use:

• customer service value and strategic importance;
• demand volume and variability;
• margin and cost-to-serve;
• product life cycle and obsolescence risk;
• required lead time and order frequency;
• regulatory or criticality requirements;
• supply risk and substitutability.

A high-volume, predictable product sold through a stable channel may use centralised inventory and economical transport. A low-volume, critical spare part may require regional stock, guaranteed availability and redundant supply despite higher cost. A customised product may use make-to-order production and dedicated technical support.

Segmentation should not become uncontrolled complexity. Each segment needs a clear value proposition, decision rules, ownership and performance measures. If two segments receive identical service and use identical processes, they may not require separate strategies.

6.1 Cost-to-serve analysis

Revenue and gross margin alone can conceal unprofitable service patterns. Cost-to-serve analysis assigns relevant logistics, handling, order processing, returns, special packaging, delivery and support costs to customer or product segments. Activity-based costing can be useful where service activities differ substantially, but estimates must be transparent and periodically validated.

A segment can be strategically important even if its direct margin is modest, for example because it generates future demand or strengthens a key relationship. Conversely, a high-revenue customer may destroy value through frequent small orders, urgent deliveries and extensive returns. The analysis should inform negotiation and redesign, not simply justify withdrawal of service.

7. Make-or-Buy Decisions

A make-or-buy decision determines whether an activity or component should be performed internally or obtained from an external supplier. It is a strategic boundary decision, not merely a price comparison.

7.1 Relevant economic comparison

For a given planning horizon, the incremental cost of internal production may be represented as:

The external sourcing cost may be represented as:

where F is avoidable fixed cost associated with internal production, v_m is variable internal cost per unit, Q is required quantity, p_b is supplier price per unit, and C_r,m and C_r,b are relevant risk and transition costs for making and buying. The model assumes that costs are measured over the same period, capacity is available or its opportunity cost is included, and only avoidable costs are treated as relevant.

If risk and other effects are excluded, the indifference quantity is:

This formula applies only when p_b > v_m. If the supplier price is not greater than the internal variable cost, internal fixed cost cannot be recovered through volume under the simplified assumptions, and further strategic analysis is required.

Worked example: make or buy

A firm requires 20,000 units. Internal production has avoidable fixed cost of $120,000 and variable cost of $8 per unit. A supplier offers the component at $13 per unit. Assume capacity is available and quality and risk are initially equivalent.

Internal cost:

C_make = $120,000 + ($8 × 20,000) = $280,000.

Buy cost:

C_buy = $13 × 20,000 = $260,000.

On these assumptions, buying saves $20,000. However, if buying requires $30,000 of qualification, switching and monitoring cost, internal production becomes preferable for the stated horizon. If internal capacity could produce another component contributing $50,000 of contribution margin, that opportunity cost must also be included, making buying more attractive. The numerical answer is therefore conditional, not universal.

7.2 Strategic criteria

Managers should evaluate:

• protection of core technology and intellectual property;
• supplier capability, financial health and capacity;
• quality and process control;
• supply continuity and geopolitical exposure;
• switching costs and contractual dependence;
• scalability and access to specialist technology;
• labour, environmental and regulatory obligations;
• speed of innovation;
• total cost and opportunity cost of capacity.

Common approaches include strategic internal production, competitive outsourcing, dual sourcing, contract manufacturing and partnership. A dual-source policy can reduce dependency but may sacrifice volume discounts and require duplicated qualification. A supplier partnership may support innovation but creates governance and dependence risks.

8. Governance, Ethics and Risk

Strategic alignment must not be reduced to financial optimisation. Supply chain decisions affect workers, communities, consumers and the environment.

Important governance issues include:

• responsible labour standards and prevention of forced or child labour;
• supplier audit integrity and remediation rather than symbolic compliance;
• product safety, traceability and recall capability;
• anti-corruption controls in procurement;
• protection of commercially sensitive and personal data;
• fair supplier evaluation and avoidance of abusive payment terms;
• emissions, waste, packaging and responsible resource use;
• continuity planning for disasters, pandemics and geopolitical disruption.

Risk should be evaluated by probability, impact, detectability and time to recovery. A low-cost single source may be rational for a non-critical standard item but unacceptable for a life-sustaining component. Resilience investments should be targeted at vulnerabilities rather than applied uniformly.

Technology can improve alignment through integrated planning, supplier portals, event monitoring, digital twins, advanced analytics and artificial intelligence. However, technology does not replace strategy. AI forecasts can reproduce biased data, fail under structural change or encourage false precision. Human accountability, model governance, data quality controls, cybersecurity and override procedures remain essential.

9. Performance Measurement and Strategic Control

Measures should reflect the intended competitive strategy. A cost-focused network may monitor total landed cost, productivity, inventory turns and capacity utilisation. A responsive network may monitor order-cycle time, on-time-in-full delivery, fill rate, forecast responsiveness and time to recover from disruption. Measures should be balanced because local optimisation can damage total performance.

Useful indicators include:

• On-time-in-full (OTIF): orders delivered by the promised date and in the promised quantity, according to a defined measurement rule.
• Order cycle time: elapsed time from a defined order event to the defined delivery event.
• Inventory turnover: annual cost of goods sold divided by average inventory value, provided both are measured consistently.
• Cash-to-cash cycle time: days inventory outstanding plus days sales outstanding minus days payable outstanding. The components must use compatible definitions and periods.
• Perfect-order rate: percentage of orders meeting all specified delivery, quantity, documentation and condition requirements.

Metrics should be cascaded across the network without encouraging dysfunctional behaviour. For example, a purchasing manager rewarded only for price reduction may select a distant supplier whose variability increases production stoppages and emergency freight. Strategic scorecards should therefore include cost, service, quality, risk, sustainability and relationship measures.

10. Illustrative Case: Meridian Home Appliances

Background

Meridian Home Appliances sells standard electric kettles, premium connected kettles and customised units for hospitality customers. It operates one central factory, imports electronic modules and distributes through retailers and an online channel. Its standard products have predictable demand, while connected models have short life cycles and uncertain demand. Hospitality customers value configuration, documentation and dependable project delivery.

Problem

The company uses one forecast-driven production system for all products. Finished-goods inventories are high for connected models, stock-outs occur for popular variants, and custom hospitality orders disrupt the factory schedule. Management is considering a new supplier, regional warehouses and greater outsourcing, but lacks an integrated strategy.

Analysis

The product portfolio contains at least three supply-chain segments:

1. Standard kettles: functional products with stable demand and high volume.
2. Connected kettles: innovative products with uncertain demand and rapid technological change.
3. Hospitality units: customised products with lower volume, higher service requirements and order-specific documentation.

The existing common strategy is misaligned. Standard kettles can use efficient production and consolidated distribution. Connected kettles need responsiveness and lower finished-goods exposure. Hospitality units need a make-to-order or assemble-to-order process with protected capacity.

Approach and solution

Meridian adopts the following design:

• Standard kettles remain make-to-stock, with long production runs and central inventory pooling.
• Common housings and heating elements for connected products are stocked, but software modules, labels and final configuration are postponed until orders and market information are available.
• Hospitality units move to assemble-to-order using a controlled catalogue of modules. A dedicated scheduling window prevents project orders from destabilising standard production.
• Electronic modules are dual-sourced for critical models. The second supplier is qualified initially for a smaller share to preserve resilience without immediately losing all scale economies.
• The online channel receives a higher responsiveness target, supported by regional forward stock for the most predictable fast-moving variants.
• Performance measures are segmented: cost and inventory productivity for standard products, availability and obsolescence for connected products, and delivery reliability and configuration accuracy for hospitality orders.

Outcome

In this illustrative scenario, Meridian reduces finished connected-product inventory while improving availability of high-demand variants. Custom orders become more reliable because final configuration and scheduling are separated from standard production. Total supply-chain cost does not fall in every category: qualification, modular handling and dual sourcing add expense. Nevertheless, the portfolio produces better total value because costs are directed toward customer requirements and major risks.

Learning points

The case demonstrates that strategic alignment is a portfolio problem. The right question is not whether the entire firm should be lean, responsive, outsourced or centralised. It is which policy should apply to each product-market combination, where differentiation should occur, and which capabilities must be protected internally.

11. Implementation Roadmap and Limitations

An implementation sequence can be structured as follows:

1. Map the current network, material flows, information flows and customer promises.
2. Segment products, customers and suppliers using demand, value, service and risk characteristics.
3. Quantify total cost, cost-to-serve, shortage cost and obsolescence exposure.
4. Identify the current and desired decoupling points.
5. Test postponement, modularity, sourcing and capacity alternatives.
6. Define service policies, decision rights and cross-functional measures.
7. Pilot the design in a manageable product family or market.
8. Review outcomes and revise policies as the market and product life cycle change.

The frameworks in this chapter have limitations. Product classifications can oversimplify mixed portfolios. Cost data may be incomplete or allocated arbitrarily. Forecast uncertainty cannot be eliminated by segmentation. Postponement may be technically or economically infeasible. Make-or-buy models may understate learning, innovation and dependence risks. Finally, alignment is dynamic: a strategy appropriate during stable conditions may be unsuitable during disruption or rapid technological change. Strategic review should therefore be periodic and event-triggered.

Chapter Summary

Supply chain strategy converts competitive priorities into network, sourcing, inventory, production, transport and information decisions. Strategic fit exists when these capabilities match customer requirements, product and market characteristics, uncertainty and the firm’s competitive strategy.

Efficient designs emphasise low cost under predictable conditions; responsive designs emphasise speed and flexibility; risk-hedging designs protect against supply uncertainty; and agile designs combine responsiveness with resilience. Cost and responsiveness are not absolute alternatives. Managers should evaluate total cost, including inventory, shortage, risk and service consequences.

Functional and innovative products require different policies, and those policies may change over the product life cycle. The customer-order decoupling point separates forecast-driven from order-driven activities. Postponement delays final differentiation and can reduce forecast risk when modularity, information and finalisation capacity are available.

Supply-chain segmentation assigns differentiated policies to products, customers or suppliers with materially different requirements. Make-or-buy decisions require relevant economic analysis together with strategic, quality, risk, ethical and governance considerations. Effective implementation uses balanced performance measures, cross-functional governance, responsible technology and periodic strategic review.

Key Terms

Strategic fit: Alignment between competitive strategy, customer requirements and supply-chain capabilities.

Supply chain strategy: Long-term design of supply-chain resources, relationships, processes and policies.

Efficiency: Achievement of required output with minimum relevant resource consumption.

Responsiveness: Ability to meet changes in demand, mix, timing, location or specification.

Risk hedging: Use of shared resources, buffers or pooled capacity to reduce exposure to uncertainty.

Agility: Capability to respond rapidly and flexibly to significant demand or supply change.

Functional product: A product with relatively stable demand, long life and limited variety.

Innovative product: A product with uncertain demand, short life cycle or high variety.

Customer-order decoupling point: The stage where a product becomes committed to a specific customer order.

Make-to-stock: Production completed in anticipation of customer demand.

Assemble-to-order: Final assembly initiated after receipt of a customer order.

Make-to-order: Production initiated after receipt of a customer order.

Engineer-to-order: Design and production undertaken for a specific customer requirement.

Postponement: Delaying differentiation or final configuration until demand information improves.

Supply-chain segmentation: Differentiating supply-chain policies for distinct products, customers or suppliers.

Cost-to-serve: The total cost of providing a defined service to a customer or segment.

Make-or-buy decision: Decision to perform an activity internally or obtain it externally.

Total landed cost: Purchase, transport, duties, handling, inventory and other relevant acquisition costs.

Resilience: Ability to prepare for, respond to and recover from disruption.

Strategic control: Monitoring and revising strategy through aligned performance measures and governance.

Review Questions

Short Answer Questions

1. What is meant by strategic fit in supply chain management?
2. Distinguish an efficient supply chain from a responsive supply chain.
3. Define the customer-order decoupling point.
4. What is postponement, and why can it reduce inventory risk?
5. Identify four criteria that should be considered in a make-or-buy decision.

Long Answer Questions

1. Explain how competitive priorities influence supply chain network and process design.
2. Discuss the cost–responsiveness trade-off, including the role of shortage and obsolescence costs.
3. Compare make-to-stock, assemble-to-order, make-to-order and engineer-to-order systems.
4. Explain how supply-chain segmentation can improve customer value and cost-to-serve management.
5. Critically evaluate the economic and strategic limitations of outsourcing.

Analytical / Application Questions

1. A firm sells a stable, high-volume product and a seasonal, high-variety product through the same network. Design differentiated supply-chain policies for the two products and justify each policy.
2. A supplier offers a unit price $2 below internal variable cost, but requires a fixed qualification cost and creates dependency risk. Construct a make-or-buy analysis and identify additional non-financial evidence required before deciding.
3. Select a product from an industry of your choice. Identify an appropriate decoupling point, propose one postponement opportunity and explain the operational capabilities needed to make the design viable.

Multiple Choice Questions with Answers

Question 1

Which condition most strongly supports an efficient supply chain design?

A. Highly unpredictable demand and short product life cycles

B. Stable demand, standard products and predictable supply

C. Frequent engineering changes and high customisation

D. Emergency customer requirements and severe supply disruption

Correct Answer: B. Stable demand, standard products and predictable supply

Question 2

Strategic fit primarily means that supply-chain capabilities are aligned with:

A. The largest available warehouse

B. The lowest supplier quotation only

C. Customer requirements, uncertainty and competitive strategy

D. A single universal inventory rule

Correct Answer: C. Customer requirements, uncertainty and competitive strategy

Question 3

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

A. To eliminate all inventory from a supply chain

B. To identify where forecast-driven activity changes to order-driven activity

C. To determine a product’s selling price

D. To replace supplier performance measurement

Correct Answer: B. To identify where forecast-driven activity changes to order-driven activity

Question 4

Which product is the strongest candidate for postponement?

A. A completely standard product with no possible late differentiation

B. A product whose final labels and configuration vary by market

C. A perishable product that must be delivered immediately after harvest

D. A product that requires all engineering before any components are available

Correct Answer: B. A product whose final labels and configuration vary by market

Question 5

A firm has average inventory of 2,000 units, unit value of $50 and an annual holding rate of 20%. What is the annual holding cost under C_i = I_avg × v × h?

A. $2,000

B. $10,000

C. $20,000

D. $100,000

Correct Answer: C. $20,000

Question 6

Which feature is most characteristic of an innovative product?

A. Stable demand over a long life cycle

B. Low variety and highly predictable replenishment

C. Short life cycle and uncertain demand

D. No risk of obsolescence

Correct Answer: C. Short life cycle and uncertain demand

Question 7

In a make-or-buy analysis, which cost is generally relevant if it can be avoided by buying externally?

A. A sunk historical expenditure

B. An unavoidable corporate allocation

C. An avoidable internal fixed cost

D. A past research cost that cannot be recovered

Correct Answer: C. An avoidable internal fixed cost

Question 8

Why might a firm use dual sourcing for a critical component?

A. To guarantee that one supplier has complete monopoly power

B. To reduce supply dependency and disruption exposure

C. To eliminate all qualification and coordination costs

D. To ensure that purchase price is always minimised

Correct Answer: B. To reduce supply dependency and disruption exposure

Question 9

Which performance measure is most directly associated with delivery reliability and completeness?

A. OTIF

B. Annual depreciation

C. Supplier market share

D. Product advertising reach

Correct Answer: A. OTIF

Question 10

A supply chain with high demand uncertainty and high supply uncertainty is most likely to require:

A. An agile design combining flexibility, speed and visibility

B. Only long production runs and centralised stock

C. A policy based exclusively on lowest purchase price

D. No safety measures because uncertainty is unavoidable

Correct Answer: A. An agile design combining flexibility, speed and visibility