Question

A high-end handbag designer employed industry-leading efficiency practices in all key supply chain processes and still found that revenue and profits were declining. The company was probably experiencing a lack of _______________ in its supply chain architecture.

Answer 1

The high-end handbag designer is likely experiencing a lack of efficiency in its supply chain architecture, which is causing declining revenue and profits. Transportation costs and labor issues can impact the supply chain and contribute to these declines.

Step-by-step explanation:

The high-end handbag designer is likely experiencing a lack of efficiency in its supply chain architecture, despite employing industry-leading practices. While the company may have implemented efficient processes, other factors such as transportation costs and labor rights can still affect revenue and profits.

For example, if the company is shipping finished goods over congested street networks or jammed freeways, it can increase costs and reduce profits. On the other hand, having locations near uncrowded freeways allows for easy travel of workers and materials to and from the factory, reducing transportation costs and improving efficiency.

Additionally, labor issues can also impact the supply chain. Just-in-time delivery, while beneficial in terms of inventory management, can create opportunities for workers in parts sub-assembly plants to interrupt the entire supply chain through strikes. This can cause disruptions and halt production, resulting in declining revenue and profits for the handbag designer.