Deciding whether to add a tier or echelon in an existing supply chain requires balancing the advantages of being closer to customers and:
Deciding whether to add a tier or echelon in an existing supply chain requires balancing the advantages of being closer to customers and:
When deciding whether to add a tier or echelon in an existing supply chain, it is essential to balance the advantages of being closer to customers with channel efficiency. This involves evaluating how the additional tier will affect the overall efficiency of the supply chain, including aspects such as cost, speed, and resource utilization. While customer service levels are important, they are typically a component of channel efficiency, which represents the broader concept of optimizing the entire supply chain system.
channel efficiency.
the benefit of coming close to the customers is measuring the required customers service levels
Adding a tier or echelon in a supply chain is often done to improve customer service levels. By being closer to customers, an organization can reduce lead times, respond more quickly to customer demands, and provide better service. Therefore, customer service levels are a critical consideration when making decisions about supply chain design and adding tiers or echelons.