This paper describes a structural approach to assess the responsiveness of a volatile and seasonal supply chain. It is based on a case study in an international toy company. Fisher’s (Harvard Bus. Rev. 75(2) (1997) 105–117) Model of ‘‘innovative’’ and ‘‘functional’’ products and the corresponding ‘‘market responsive’’ and ‘‘physically efficient’’ supply chains constitutes the backbone of this assessment. Four risk-influencing determinants—forecast uncertainty, demand variability, contribution margin, and time window of delivery are found suitable to assess the responsiveness of the toy supply chain. Assessment of the company’s product differentiation model shows that toy products are mostly innovative or ‘‘intermediate’’, but not functional. A proposed new product differentiation model using risk-influencing determinants has enabled the toy company to differentiate its new products, to deal with volatility, and to design for a responsive supply chain. These findings have also enabled the extension of Fisher’s Model to volatile supply chains. This new product differentiation model adds a physically responsive supply chain for ‘‘intermediate’’ products into the Fisher’s Model.
International Journal of Production Economics, 2006, Vol 104, Issue 2, p. 709-721