Challenge your Paradigms: 3 Supply Chain Roadblocks
We are looking at the wrong end of the problem.
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Category: Demand Driven
We are looking at the wrong end of the problem.
If you’re frustrated and unable to see the path forward, it starts with inventory management and fixing the inadequate systems you’ve been forced to work with. Once you see the solution that I’ll present to you, you will never be able to “unsee” it.
Looking back, I don’t know what took me so long to realize that I have outgrown you. You never had an adaptable planning process – you only work if there is no variability.
In traditional MRP, we start with a prediction of demand called a forecast, which is typically a range. We are forced to choose one single number to represent that range which we then input into a complex calculator.
If you have product available, then sales will result. You will only maintain that level of sales if you have the capability to produce to the customer demand. And if you produce only what the customer is buying, then you will have the money to pay bills, including worker salary.
Today, we find Julie, Matt and two other members of their team attending a Demand Driven Planner workshop. There is a certification possible, but right now Julie and Matt just want to evaluate if this methodology is as promising as it seems. We catch up with them during a break in the class.
What is the purpose of starting a Sales and Operations Planning process? For many, S&OP is a process to get information to flow between various parts of the business, the most obvious being Sales and Operations (hence the name). The premise, I believe, is that if Operations knows what is happening in Sales, then they will be able to respond. Great starting point. At some point, perhaps it worked well.
I was mapping what I thought my own Work-Life balance should include, based on one current methodology. Physical, Emotional, … and then I went off the rails. Because I started thinking about the viewpoint of the company and how aligning the company’s Work-Life balance offering with the individual’s Work-Life balance requirements will make a huge difference in achieving that balance.
What do we use in our lives that hasn’t appreciably changed in 20 to 50 years? And how much duct tape or band-aids have we applied so we can keep using the same old items or methods?
the more steps you have, the less likely your calculations will be completely predictable.
So, why are we still applying the solution when we no longer are facing the problem? There are only two possible answers to that.
Your goal is to maximize the money kept in the Saving’s account. And therefore, minimize the money in your Checking account. But don’t let the checking balance drop below zero.
We know intuitively that we must be agile in order to meet the changing and volatile customer demand. Why do we continue to insist that precision and the resulting chaotic emergencies are the best way to achieve agility?
“We’re taking data we know is wrong and using it to predict a precise outcome that we somehow expect to be right.
The irony is two-fold. First, for all our talk about processes and process improvement, we really spend an obscene amount of time manually adjusting and firefighting to achieve the desired outcome.
Because precision is, um, well, precise, you now have a different starting point for your journey’s second leg. Which means all the future plans you made will need changing.
Today’s buzzword is Visibility. Every business leader says that we need better visibility. Therefore, the rest of us run off searching for better visibility.
I asked a group of supply chain purchasing and planning professionals a simple question. I asked them how they decide just when to place an order and just how much.
