Getting out of the upper right-hand cell
3 important questions on Getting out of the upper right-hand cell
What is the result of the fact that new-product introductions has sky-rocketed?
Many companies have turned or tried to turn traditionally functional product into innovative products. But they have continued to focus on physical efficiency in the processes for supplying those products. This phenomenon explains why one finds so many broken supply chains - or unresponsive chains trying to supply innovative products - in industries such as automobiles, personal computers and consumer packaged goods.
How does a company in the upper right-hand cell overcome this schizophrenia?
Either by moving to the left on the matrix and making its products functional or by moving down the matrix and making its supply chain responsive. The correct direction depends on whether the product is sufficiently innovative to generate enough additional profit to cover the cost of making the supply chain responsive.
What is a sign that a company needs to move to the left in the matrix?
If it has a product line characterized by frequent introductions of new offerings, great variety, and low profit margins.
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