Supply Chain Illustrated

Stop Managing Chaos
Start Driving Change

Category: Demand Driven

How do we Stop Managing Chaos?

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.

One-Size-Fits-Some

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.

A CFO, a CEO and a COO walk into a bar.

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.

Julie and Matt go to a Demand Driven Planner Workshop. Eyes Wide Open.

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.

Sales and Operations Planning. Let’s re-imagine it.

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.

The Mystery of Company Culture vs Work Life Balance.

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.

Safety Stock vs DDMRP Buffer

And since I imagine none of you would be happy without a gas gauge, then I ask you, “Why do you think Safety Stock is sufficient to manage millions of dollars’ worth of inventory?”

Money Transfer Supply Chain Analogy

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.

The Truths of Inventory Management

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?

girl looking in microscope

Supply Chain – Under the Microscope.

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.

An Exercise in Precision

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.

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