Supply Chain Illustrated

Stop Managing Chaos
Start Driving Change

Tag: Inventory 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?”

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?

Safety Stock – a misleading solution

Typically, your family uses three eggs per day, so you set a safety stock level of six (two days worth). This means you never intend to have less than six eggs. That way, you should not have to rush to the grocery store just because of eggs.

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.

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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