Lack of supply-chain coordination causes the level of product availability to decrease . This contrasts with several cost and time measures—manufacturing cost, transportation cost, and replenishment lead time—which generally increase when coordination deteriorates.
The mechanism begins with the bullwhip effect. Greater order variability makes demand harder for upstream participants to predict and satisfy. Manufacturers require additional capacity or inventory, transportation becomes more irregular, and replenishment schedules become less reliable. Despite carrying more aggregate inventory, the supply chain may have inventory positioned in the wrong products, locations, or periods. Customers therefore encounter more stockouts and lower service availability.
This illustrates an important supply-chain principle: more inventory does not automatically produce better availability. Poor coordination can simultaneously increase total inventory and reduce customer service because the stock is not synchronized with actual demand.
Established supply-chain performance analysis identifies manufacturing cost, inventory cost, replenishment lead time, transportation cost, and shipping/receiving cost as increasing under poor coordination, while product availability decreases .
Therefore, B is the only listed performance measure that moves downward as a consequence of inadequate coordination.
Reference Topic: Business Value and ROI of Supply Chain Excellence — Coordination, Product Availability, and Performance Measurement.
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