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A supply chain network.
The term chain is a little misleading because it gives the impression 
that there is only one entity at each stage of the supply chain. In reality, as 
seen in Table, multiple entities are involved at each stage: a manufacturer 
distributor. The more appropriate term probably will be either supply 
networks or supply web. However, the term supply chain has been widely 
accepted by both practitioners and academicians: hence, we will continue 
to use the same throughout the book.
Supply Chain Strategy Building Blocks
A supply chain strategy consists of five building blocks.
1. Manufacturing strategy.
2. Outsourcing strategy. 
3. Channel Strategy. 
4. Customer service strategy. 
5. Asset network.
Manufacturing Strategy 
It means deciding, how to produce products or service. Will products 
be made to stock, to orders or some combination of it? Will some of the 
manufacturing be outsourced or production moved to low cost countries? 

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Notes
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Will final configuration be completed outside the manufacturing plant, 
closer to customer?
Changing the manufacturing strategy can be a key source of 
competitive advantage. Sometimes, it can also be an advantage to choose 
different manufacturing strategies for different products or different 
markets. The key drives of manufacturing strategy are product life 
cycle, demand changes and the number of product variants. Types of 
manufacturing strategies appropriate for different products are shown in 
below table.
Strategy
When to choose this 
strategy
Benefits
Make to 
stock
For standardized high vol-
ume products
Low manufacturing cost, 
meeting customer de-
mands quickly.
Configure 
to order
For products requiring in 
many variations
Customization, reduced 
inventory, improved ser-
vice levels.
Make to 
order
For customized products 
with infrequent demand
Low inventory levels, wide 
range of product options, 
simplified planning.
Engineer 
to order
For complex products that 
meet unique customer 
needs
Enables response to spe-
cific customer require-
ments.