Aligning Supply Chain and Product Portfolios

In recent years, it has become widely accepted that optimal supply chain design depends on the type of product the chain is catering to. Moreover, as opposed to carrying one product type only, firms deliver a variety of both functional and innovative products in parallel, complicating product-to-supply chain alignment. In this manuscript, we analyze in detail a firm's optimal supply chain portfolio as a function of its product portfolio. Our results indicate that supply chain and product portfolio alignment holds the potential for tremendous cost savings. Due to the large number of factors influencing the optimal setup, however, profound quantitative analysis is required to exploit its full potential. (C) 2011 Elsevier B.V. All rights reserved.