Active vs Passive Networks
Use when designing distribution strategy for a product category or when evaluating whether current infrastructure matches product requirements.
Framework for deciding whether to build active (expensive, controlled, phloem-like) or passive (cheap, uncontrolled, xylem-like) distribution infrastructure based on product characteristics.
When to Use Active vs Passive Networks
Use when designing distribution strategy for a product category or when evaluating whether current infrastructure matches product requirements.
How to Apply
Score Product Characteristics
Rate 0-3 on: Product value >$100/unit? Product perishes quickly (<30 days)? Customers pay premium for fast delivery? Delivery speed is competitive differentiation?
Questions to Ask
- Is product value >$100/unit?
- Does product perish/spoil quickly (<30 days shelf life)?
- Do customers pay premium for fast delivery?
- Is delivery speed competitive differentiation?
Outputs
- Total score 0-12
Match Score to Infrastructure Type
0-4 points = Passive infrastructure (ocean freight, ground shipping, 7-14 day delivery). 5-8 points = Hybrid (passive long-haul + active last-mile, 3-5 day). 9-12 points = Active infrastructure (air freight, expedited, 1-2 day).
Outputs
- Infrastructure type recommendation
Validate Economics
Ensure transport cost as % of product value is appropriate. Active: acceptable if <10% of product value. Passive: necessary if product value <$100.
Outputs
- Economic validation