Supply Chain Illustrated

Stop Managing Chaos
Start Driving Change

Category: Supply Chain Management

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?”

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.

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.

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.

There must be a better way

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.

Use Demand Driven MRP to Achieve Success

Reduce Inventory, they said. And they’re still saying it. We’ve been working on the same things for decades. How is it possible that we are chasing the right things, but not achieving the goal?

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.

Problem Solving

The Problem-Solving Dilemma

When trying to implement a culture change or a lifestyle change or any kind of a change, you need to be intentional.

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