As opposed to the anticipatory model that relies heavily on forecasts and plans, the responsive model is dependent on the prevailing circumstances and conditions in the market. The reactive model gains popularity due to the changing taste and preferences of consumers. Consumers prefer customized goods and services that they keep ordering at undefined times. Therefore, it is difficult for a firm to make profits while relying on projections of the change patterns of the consumers. Based on market research, companies can identify existing gaps in the market and move swiftly to fill them. Therefore, a responsive model currently finds popularity in the contemporary world due to the dynamics of demand.
The rising variability in demand causes uncertainty in logistics and complication in the supply chains networks. Today, companies face longer lead times and substantial variability leading to increased costs of inventory as firms buffer their stocks. There is a challenge of communicating changes in demand to the transporters and suppliers, and this makes the management of costs even harder. Therefore, a consolidated view of transportation and logistics within the supply chain is imperative to adopting the right model in operation.
Manuj, I., Omar, A., & Pohlen, T. (2014). Inter-Organizational Learning in Supply Chains: A Focus on Logistics Service Providers and Their Customers. Journal of Business Logistics, n/a-n/a. ...Show more