A hybrid supply chain strategy is one that strives for making the supply chain both lean and agile. A lean supply chain is one in which the wastages are continuously minimized and eliminated. An agile supply chain is one that is flexible and can respond to uncertainties and sudden developments.
The age of mass production has given way to one of mass customization. Mass customization means production of customized goods to meet unique needs of customers while keeping per unit cost of production low, as in mass production. Companies have to take care of the unique needs of different segments of customers in the highly competitive contemporary business environment. This requires production in small batches.
A hybrid supply chain facilitates efficient production in smaller batches. Companies having such a strategy are also able to respond effectively to changing demand situations.
Agility in supply chain enables companies to minimize their inventory holdings. This reduces inventory carrying costs. Elimination of wastages in the supply chain further adds to the cost advantage that companies generate from a hybrid supply chain. Cost is a major competitive factor in the contemporary business scenario.
A hybrid supply chain strategy results in better collaboration with customers and suppliers. Controlling of wastage across the supply chain requires continuous collaboration with suppliers. Agility in supply chain comes from continuous communication with both suppliers and customers.
A hybrid supply chain is heavily reliant on information exchange across the supply chain. Developments in information technology have made implementation of hybrid supply chain strategy more effective.
There is no one right supply chain strategy that fits all businesses. Businesses have to look at their unique needs and then decide on the supply chain strategy that they want to pursue. Simply a lean supply chain may be suitable for some businesses while for others an agile supply chain may be enough. But the most efficient and effective organizations generally have a hybrid supply chain strategy.
Companies like Wal-Mart have created a sustainable competitive advantage for themselves by pursuing hybrid supply chain strategy. The huge cost advantage that Wal-Mart enjoys over its rivals is largely because of a lean supply chain. The large variety of merchandize that is there in the stores of Wal-Mart is due to an agile supply chain that can respond to fast turnover of in-store merchandize.
Supply Chain Management has become one of the biggest of sustainable competitive advantage for many companies. The right supply chain strategy can make all the difference. A hybrid approach to supply chain management is a holistic one that can lower costs, improve product quality and enhance customer satisfaction.