John Engelhardt, Director of Purchasing and Asian Operations, Rev-A-Shelf
Does your extended supply chain suffer from extreme seasonal variability? Does this situation challenge your ability to meet service level commitments to your customers? I have grappled with this at Rev-A-Shelf, addressing unusual conditions created by Chinese New Year and other global events, and would like to share the experience and a few things I learned along the way.
Consultant Dave Turbide
At year’s end, we are often caught up in thinking and planning for the coming year. Did 2013 turn out the way you expected? Will 2014 be dramatically different? Are there other factors—things we are planning to do; things we think our competitors might do; outside forces like changing taste, demographics or economics—that might change the course of business in the coming year?
As we approach the midpoint in 2013, there is still a lot of economic uncertainty complicating your supply chain planning processes. Some look at this shaky economy and postpone needed investments that can position their organizations for a strong future.
However, this is not the time to retreat from your supply chain improvement initiatives. Rather, it’s a time to double-down on your efforts to prepare for the inevitable business opportunities that lie ahead.
Economic recovery is a time of sales opportunities. You want to make sure that you’re prepared to take advantage of them. Good demand and inventory planning can help. Continue reading
Posted in Business Policy, Intermittent Demand
Tagged economic recovery, forecasting, forecasting technology, intermittent demand, lead time, optimizing inventory, S&OP, service levels, supply chain, supply chain planners
Fluctuations in an inventory supply chain are inevitable. Randomness, which can be a source of confusion and frustration, guarantees it. A ship carrying goods from China may be delayed by a storm at sea. A sudden upswing in demand one day can wipe out inventory in a single day, leaving you unable to meet the next day’s demand. Randomness creates frictions that make it hard to do your job.
At first blush, it sometimes seems best to respond to randomness with the ostrich approach: head buried in the sand. You can settle on a prediction and proceed on the assumption that the prediction will always be spot on. The flaw in that approach is that it ignores statistical methods that allow us to make use of a wealth of knowledge about our knowledge itself—how confident we can be in our predictions, and what breadth of possibilities confront us. The efficient approach to tackling the problems that stem from randomness is not to ignore uncertainty, but to embrace it with eyes open.
Posted in Excellence in Forecasting
Tagged average, contingencies, forecasting, inventory, overstocking, randomness, raw materials, reliability, staffing, stocking, supply chain, uncertainty, understocking
Dr. Greg Parlier (Colonel, U.S. Army, Retired)
Contributed to The Smart Forecaster by Dr. Greg Parlier (Colonel, U.S. Army, retired). Details on Dr. Parlier’s background conclude the post.
For over two decades, the General Accounting Office (GAO) has indicated that the Defense Department’s logistics management has been ineffective and wasteful, and that the Services lack strategic plans to improve overall inventory management and supply chain performance.
Posted in Business Policy, Guest Posts
Tagged analytics, armed services, decision support, efficiency, ERP, force readiness, innovation, inventory levels, logistics, management information, organizational design, performance analysis, supply chain, US Army