Capacity aggregation in supply chain management refers to the process of combining the capacity of different suppliers or facilities to meet the demand of a customer or market. This can be done in a number of ways, such as pooling inventory or production capacity from multiple suppliers or factories to meet the needs of a particular customer or to take advantage of economies of scale.
Capacity aggregation can help companies to optimize their supply chain by reducing costs, improving delivery times, and increasing flexibility. For example, if a company has multiple suppliers that can each produce a portion of a particular product, it may be more cost-effective to aggregate the capacity of these suppliers rather than using just one supplier. This can also reduce the risk of supply chain disruptions, as the company has multiple sources to draw from.
Overall, capacity aggregation can be an important strategy in supply chain management, particularly for companies that need to manage complex supply chains with multiple suppliers, factories, and distribution channels.
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