Supply Chain Model	Best fit for which industry/ product type?	Benefits	Possible disadvantages
Continuous flow model	Mature industries: cement, commodity, low-price fashion brands, paper, steel	Highly efficient Low inventory  Up-to-date and accurate production Lower cost	Not flexible Does not respond well to rise in demand or made-to-order products
Agile model	Specialty products Products made-to-order	Highly responsive Focuses on transportation expertise Charges a higher price Fine-tuned for the product Changes quickly without much disruption	Does not focus on automation Becomes costly once a certain number of goods is met
Fast model	Products with a short life cycle Businesses that change product lines regularly	Capitalizes on trends Transforms ideas into products quickly Low-cost
Flexible model	Seasonal products	Highly adaptive and responsiveForecasts predictable demand patterns Technical strengths  Handles volume well during peak season	Incorrect forecast may cause extra inventory More involvement from third-parties may affect the product’s quality
Efficient model	hyper-competitive industries	Maximizes efficiency  Make use of machinery  Lowers product cost	Takes more time and money to overcome disruption
Custom-configure model	Specialized industries	Custom setups during the early stages Satisfies the customer’s customization demands	More costly

A well-functioning global supply chain relies on quality supply chain management. 

That’s why it is crucial to choose the most fitting supply chain model for your business – no matter what your business model, strengths, weaknesses, or expectations are. 

There are six supply chain models – each having very different elements, advantages, and disadvantages. This article will guide you through all six models to help you choose the one that works for you.

Continuous Flow Model

This type of supply chain model is considered to be one of the most traditional models. It is best suited for industries with stability from both ends of the supply chain: there is a constant demand from the customer and the supplier can satisfy such demand with high efficiency. The constant demands allow for timely and efficient production, leading to low inventory, and leaving behind little waste. 

Goods belonging to this supply chain model are produced in a steady flow – just as the name of this model suggests. Additionally, these products often have very few variations in their designs. They are the same uniform goods that are mass-produced.

This typical feature doesn’t give this supply chain model a lot of room for flexibility. The model is already highly efficient. Changes in the products’ features may cause great disruption and financial loss in the entire supply chain. 

Mature industries like cement, commodities, or low-priced fashion brands often use this model. Products with a short life cycle may be suitable for this supply chain model too, like dairy or pastry. 

Agile model

The Agile model, in contrast to the continuous flow model, is the most fitting for products that have unpredictable demand. Without the steady flow of orders, the agile model lies dormant when demand is low, but this does not mean the production capacity cannot satisfy a sudden peak in volume. Indeed, its main focus is the ability to ramp up production per the customer’s request, even when it is on short notice. This supply chain model underlines the responsiveness of the system.

Another focus of this supply chain model is transportation expertise. Due to the fluctuation in demand, the agile model is refined for the very product it is used for. As a result, there isn’t as much highlight on automation as there is on the expertise needed to move goods around. This specific competence allows businesses to charge higher prices for their services.

However, this specialized supply chain model may become pricey once a certain number of products is met. By this point, when compared to other supply chain models, the agile model proves to have lost most of its competitive edge. 

Fast model 

At first glance, the fast model may seem similar to the agile model. However, there are some important differences between the two supply chain designs. One of the major features of the fast model is that it capitalizes on trends. As a result, whichever business floods the market with the newest and trendiest products first yields the biggest profits. 

This type of supply chain model is suitable for companies that change their product line often – the manufacturers follow the trend and try to sell the goods while the trend is still relevant. Even though there is a certain level of flexibility to this type of model, its basic competencies include:

• The short period to take an idea to the market
• Accurate forecasting to minimize the cost caused by the imbalance of supply and demand
• Producing the lowest price by assuring end-to-end efficiency.

One example of this supply chain model is “fast fashion”. You have probably heard of it before. Let’s take Zara as an example – they produce new clothing lines almost constantly to take advantage of what is considered to be “trendy”.

Flexible model

This particular supply chain model is defined by its high adaptability levels because it gives businesses the freedom to deal with seasonality. As the name suggests, this model is flexible and allows companies to deal with the peak season when demand is high, and other long stretches when there is low demand or no demand at all. 

Being able to amp up or wound down the production volume means the production can be switched on or off easily.

The flexible model’s quick adjustment relies on several factors:

• The first one is the capability to set up a wide network of suppliers or recruit personnel with extensive knowledge regarding suppliers. Contracts signed with these suppliers are mostly seasonal. 
• The second factor is the right people to operate the appropriate supply chain management software or automated machinery. 
• Next, the business needs to have correct stocking algorithms based on accurate historical data to prepare the important stock resources and sell them when it is not peak season. 
• The fourth and last element is the highly responsive and reconstructable manufacturing processes. 

An example of this supply chain model is mooncakes – the demand only peaks a month or two before the Mid-autumn festival. There is often little to no demand during the rest of the year.

Efficient model

The efficient model is a supply chain model for companies in industries with fierce competition. There are several reasons behind the focus on maximizing efficiency – the business end goal. The most prominent one, however, is the fact that the same group of customers these businesses are fighting over see little difference in the proposed value of the many rival goods. The competitive edge is based almost on pricing alone. Therefore, maximizing end-to-end efficiency is the ultimate goal.

To achieve said goal, businesses using this supply chain model rely a lot on correct forecasting. Proper forecasting allows for the good preparation of raw materials and the utilization of machinery and other assets. Additionally, effective inventory management and product fulfillment result in a reduction in cost, giving companies a competitive advantage.

Nonetheless, inaccurate forecasting or manufacturing disruption can have damaging consequences on the supply chain. Any adjustment due to material shortage or labor problems is costly and leads to lengthy delays.

Custom model (Custom-Configure Model)

If none of the traditional models work for you, there is always the choice to customize your supply chain model. Just as the name suggests, this model provides customizations in the assembly and production processes. This type of setup typically happens at the early stages. 

Many consider the custom supply chain model to be a mix of the continuous flow model and the agile model. To be specific, the continuous flow model takes place before the configuration. The agile model comes in during the downstream process – meaning during the process of moving the completed goods. 

The custom model is often used for manufacturing prototype designs in small batches. Again, any product with customization options would probably use this supply chain model. Let’s say you are looking for a dresser to put in your bedroom – but you wish to add some tweaks to better fit your needs. Perhaps you want the handle to be rounded. These types of customization often required a complex system of sub-assemblies. 

Another well-known example of this supply chain model is the automobile manufacturing process.

There is something to note regarding the custom-configure model, however. It often costs more compared to traditional models. You will have to be willing to invest more when you decide to choose this supply chain model.

Conclusion

You might encounter some difficulties when first choosing the right model for your business. There are a lot of similarities, but understanding the basic supply chain models and choosing the one that’s right for your business allows you to build a robust supply chain management system and withstand inevitable disruptions in the future. You can always start with the basic and traditional supply chain systems, then customize them as you figure out which feature best works for your business.