Dynamic sales volumes One of the mo

Dynamic sales volumes One of the most costly operating aspects of supply chains is trying to meet the needs of volatile sales volumes. Often this involves excessive inventories, underutilized personnel, or more expensive delivery options to meet customer demands on time. While sometimes these volatile demands are caused by external sources such as the customers themselves, they are often caused internally by end-of-month sales promotions. Supply chain design should involve close collaboration between top-level managers across the organization so that unnecessary costly supply chain options are avoided. We will discuss the implications of supply chain dynamics in more depth in Chapter 14, “Supply Chain Integration.”Customer service and quality expectations We have discussed customer service levels as they relate to an organization’s internal inventories in Chapter 9, “Inventory Management.” Here we focus on the organizational pressures emanating from the sales and marketing groups for superior service levels for the organization’s customers. Questions such as “What service level should be guaranteed?” or “How speedy must our deliveries be?” need collaborative discussion from the sales, marketing, and finance groups. Customers are also demanding stricter conformance to service or product specifications and higher levels of quality. “What levels of quality are achievable and at what cost?” The answers to these questions impinge on the design of the supply chain, particularly its points of supply and the choice of suppliers.