Supply Chain Differentiation: Background, Concept and Examples

The purpose of this paper is to provide new evidence in the field of supply chain differentiation, and aims to combine insights of supply chain management with the service dominant logic to connect fundamental customer requirements with supply chain decision-making.

The contents of the framework were applied as source to develop a generic decision support flowchart for supply chain executives.

From the perspective of “test consumers” - supplemented with secondary data - two cases were examined.

The cases provide insights for supply chain differentiation approaches of Adidas and Lego®.

The crucial factor to link customer requirements with supply chain settings turned out to be the magnitude of customer co-creation along the value chain under consideration of synergies across the channels.

The framework provides the opportunity to structure the complex multi-criteria decision problem constituted by supply chain differentiation.

The paper provides helpful insights that could be used as starting point for the development of several industry specific decision-finding models or applications in supply chain differentiation.

Introduction
Today, customers are becoming more and more sophisticated in terms of demand and are calling for individualized goods and services.

At the same time, technological progress is shortening product life cycles and globalization is severing competition in most markets.

This highly competitive, sophisticated and dynamic current economic environment is calling for innovative and adaptive business approaches.

This challenging starting situation requires effective supply chain settings. In parallel to these requirements, companies newly consider the various differentiation options offered by supply chain management (SCM).

In fact, several promising chances exist to differentiate a company from its competitors and to provide its customers with unique added value through customer tailored solutions.

The magic word in this instance is “supply chain differentiation” (SCD). This means executing distinct standardized supply chains for distinct customer segments from one single market.

Source: Hofmann, E. and Knébel, S. (2016) Supply Chain Differentiation: Background, Concept and Examples.
Journal of Service Science and Management, 2016, 9, 160-174. Published Online April 2016 in SciRes.