product's variety level and supply chain strategy
Over the past decades, there has been a developing trend for companies to increase the product variety offerings with the aim of providing customers with more choices and standing out from competitors. Many cases can be found in diverse industries, such as automotive, computer and telecommunication. Yet launching and maintaining a large product variety incurs some intensive conflicts among the processes of supply chain, e.g.,the conflict between the actual long material procurement lead time and the short delivery lead time customer requirement. If the conflicts could not be well treated, the increasing variety may be detrimental to the long run profits and the competitiveness of firms. The existing studies on the decisions of product variety level may include the tactical and strategic decisions. From the tactical perspective, more efficient and flexible manufacturing technologies have made it easier to produce a large products variety without a substantial increase in costs. However, there are some limitations on the tactical decisions, especially when the demand forecast accuracy is not high enough. For example, for the short life cycle products like computers, the procurement lead time of some components (IC chip, chess) may be as long as the development lead time of products. In these industries, it is difficult to make good decisions on the product variety level with the tactical methods. Some studies suggested that the decisions on the product variety level need to consider the supply chain strategy, which is tightly related to every supply chain stage and firm performance.This study was proposed to examine the product variety level from the strategic perspective. A new configuration on supply chain strategy was proposed with considering the decisions on product variety and its consistency relationships with supply chain process, which were examined based on an empirical study.
