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To this end they decided to outsource most of its manufacturing operations to Taiwan but retain the design and also vertically integrated downstream channels. Another example is the Benetton Group which is a leading edge garment supply chain in the world. It has the presence in over 120 countries. Its core business is fashion apparel. But, 80% of its manufacturing operation is outsourced to thousands of independent small manufactures. This helped the Benetton group to reduce its manufacturing cost, synchronise the supply chain capacity with the fluctuated market demand, and alleviate the bullwhip effects.

This means supply chain capacity planning differs from organisational capacity planning in that it is coordinated endeavour. One can consider a single column supply chain with n (number) participating members. Each member has a known capacity Ci. com 42 Fundamentals of Supply Chain Management Supply Chain Design and Planning One can imagine a supply chain as a piece of water pipe with different diameters at different sections. The overall flow of the pipe, which represents the total capacity of the supply chain, depends on the smallest diameter section.

Collaborative policies and jointly formed multifunctional teams are much more effective in identifying the waste lurking in the gaps of the supply chain.

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