Both aforementioned strategies can be adopted separately or
jointly. One thing to be mentioned here is that, even
‘hedging’ strategies mitigate uncertainties and are favourable
for the execution department. However, it impacts the benefit
of another department. For example, production lead-time
hedging strategy is favourable for the buyer but add more
pressure to the prefab factory, for it has to overwork within a
shortened time period. In addition, space hedging is preferred
for the prefab factory who is regarded to shoulder shipping
service by itself but actually outsources to a 3PL, however, it
impacts the benefits of a 3PL. Even a traditional 3PL is
supposed to provide temporary storage service, holding more
in its warehouse leads to low efficiency of warehouse
management and congestion. Also, the empty space could be
leased out for others with a higher market price. In this way,
the conflicts always exist between two departments in the
hedging strategy.ogistics
uncertainty is not wisdom.
Both aforementioned strategies can be adopted separately orjointly. One thing to be mentioned here is that, even‘hedging’ strategies mitigate uncertainties and are favourablefor the execution department. However, it impacts the benefitof another department. For example, production lead-timehedging strategy is favourable for the buyer but add morepressure to the prefab factory, for it has to overwork within ashortened time period. In addition, space hedging is preferredfor the prefab factory who is regarded to shoulder shippingservice by itself but actually outsources to a 3PL, however, itimpacts the benefits of a 3PL. Even a traditional 3PL issupposed to provide temporary storage service, holding morein its warehouse leads to low efficiency of warehousemanagement and congestion. Also, the empty space could beleased out for others with a higher market price. In this way,the conflicts always exist between two departments in thehedging strategy.ogisticsuncertainty is not wisdom.
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