Let’s think about travel. It’s a great analogy for our supply chain challenges.
You know where the event is going to be, but not when. Do you buy your plane tickets?
You know when the event is going to be, but not where. Do you book your hotel?
Isn’t this very similar to our planning in supply chain? We know product will get ordered, and we put our prediction into the system, but we don’t really know how much and we don’t even try to be specific about when it is really needed. Yet, we make concrete plans to achieve our prediction, even though we know that’s not going to be correct. And then we expedite and adjust until we finally collapse from paying the chaos tax.
Imagine planning a trip to a specific location in Minneapolis. Driving, with turn-by-turn instructions, timing all defined each step of the way. But sometime in your 3-hour journey, the location changed, or the event time changed. Not acceptable? But that’s our supply chain planning by design.
Today’s most (if not all) supply chain systems are designed for constant course correction. Because we’re aiming at a precise target that is all but guaranteed to change. What if instead we focused on capability? Capability to hit the target if it lands anywhere between point A and point B. Then it doesn’t matter if the number is 30 or 40. And it doesn’t matter if it needs to ship on Tuesday or Thursday.
It feels like many of us are working hard to improve our chaos management.
But what if we create a system that removes the chaos that has been designed into the process? What if we attack the source of chaos (at least the self-inflicted chaos)?
What if we had a kind of a “Check Engine Light” or a “Gas Gauge” on our inventory? Most of us would never calculate the exact amount of fuel needed to make a specific trip and only put that amount of fuel in the car. Or on a longer trip, calculate precisely where we will run out of gas and prepay our refuel stop based on that calculation.
Let’s talk about the value of Demand Driven MRP principles and the application to your business. Let’s help you to STOP PAYING THE CHAOS TAX.
John Melbye
