Burning down the house
Let's be quite clear from the outset: arson is a crime. So why do we persist in lighting fires in our own businesses? Have you ever wondered how many of your problems today were started by you yesterday?
One of the most common arson attacks concerns the setting priorities for orders. Rushing an order through the factory because it is late will only solve one problem. Think about the orders that will be delayed as a result of this short-sighted reaction. Will you have to rush those through tomorrow?
Sure, the order is for an important customer that we cannot let down. But this constant rescheduling only tackles the symptoms, not the root problem.
If you are not flexible enough to respond to changes in demand, you should look at reviewing your stock/batch policies. Remember that there is a 1:1 ratio link between stock levels and lead-times. If you reduce the amount of stock and work in progress, you improve your ability to respond to changes.
If you still struggle to understand the true meaning of supply chain thinking, we are touching on its very essence here. You achieve it when your level of supply chain understanding is such that you no longer solve one problem by creating 10 new ones for yourself and others.
While I am not suggesting that we are creating the fires on purpose, I am very conscious that we all enjoy putting them out. Let's be honest, which of these feels more satisfying to you when you come home in the evening: "Hi Darling, I had a crazy day at the office ... It was a real push to get the order out to the client but we made it ... The team did a cracking job!" or "Hi Darling ... No, nothing exciting ... Everything went to plan."? From a business point of view, the first instance is more likely to lose control of costs and reduce profits.
You see, changing the way we plan and manage our supply chains goes much further than most businesses ever imagined. It takes guts and honesty to tackle those root causes. Now put down those matches!
Hugh Williams is founder of supply chain planning specialist Hughenden.
