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Broadly, the success of the supply chain depends on the product design and the capabilities of the supply chain, but the reverse is also true: the success of the product depends on the supply chain that produces it. The product design affects the associated supply chain and its requirements directly, including manufacturing, transportation, quality, quantity, production schedule, material selection, production technologies, production policies, regulations, and laws. But product design affects not only demand generation but also manufacturing processes, cost, quality, and lead time. In other words, it is the ability of a product's design to generate demand by satisfying customer expectations. In this context, demand generation is used to define how attractive a product design is in terms of creating demand. In addition, as supply, and therefore competition, among companies for the limited market demand increases and as pricing and other marketing elements become less distinguishing factors, product design likewise plays a different role by providing attractive features to generate demand.
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With increasing globalization and easier access to alternative products in today's markets, the importance of product design to generating demand is more significant than ever. This gives negotiators a solid basis to form their strategy on and drive overall spend down. Cost benchmarking is one effective method for identifying competitive pricing within the industry.
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Supply-chain managers are under constant scrutiny to secure the best pricing for their resources, which becomes a difficult task when faced with the inherent lack of transparency. A lack of transparency in the supply chain is known as mystification, which bars consumers from the knowledge of where their purchases originated and can enable socially irresponsible practices.
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Through these, corporations are making demands on their suppliers (facilities, farms, subcontracted services such as cleaning, canteen, security etc.) and verifying, through social audits, that they are complying with the required standard. As part of their efforts to demonstrate ethical practices, many large companies and global brands are integrating codes of conduct and guidelines into their corporate cultures and management systems.
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