Incorporating Supply Chain Design into the Engineering Product Design Phase

Today’s supply chains must be flexible, adaptable, and agile to respond quickly to customer demands. However, the supply chain is often neglected when a company is designing a new product. This paper outlines and explains how integrating supply chain design into the product design phase can improve engineering design and the supply chain logistics.First, the paper reviews the literature to discover the best practices for companies seeking to integrate supply chain into the design process. The examples of individual companies that adapted some of these techniques are provided. Second, we create a simulation of a decision model to analyze and quantify the benefits of designing the supply chain concurrently with designing a product. The simulation suggests that integrating supply chain design into the design phase can often lead to lower overall costs. The benefits of this integration increase if the costs of design and costs of supply chain are highly correlated.