With their high profit margins and volatile demand, innovative products require a fundamentally
different supply chain than stable, low-margin functional products do. To understand the difference,
one should recognize that a supply chain performs two distinct types of functions: a physical
function and a market mediation function. A supply chain’s physical function is readily apparent
and includes converting raw materials into parts, components, and eventually finished goods, and transporting all of them from one point in the supply chain to the next. Less visible but equally important is market mediation,
whose purpose is ensuring that the variety of products reaching the marketplace matches what consumers want to buy