Competing on Reliability: Synchronisation

To compete with reliability, the bullwhip effect must be reduced or eliminated. This means addressing its root causes: 
– seasonal peaks, 
– promotions, 
– cyclical peaks and 
– order batching

Influencing seasonal peaks or promotions, as in retail promotions, involves close inter department collaboration with marketing and sales.
Predicting the timing of or mitigating the effects of cyclical peaks, as in the oil industry, is almost as hard as predicting the stock market. 
Reducing order batching is hard because it often goes against the natural incentive for buyers, which is to place large orders to get volume price discounts.

Even if there were full visibility, however, companies need to develop the information systems to compute the optimal order, and people need to share data and limit counter-productive behaviour, such as maintaining extra buffer stock and hoarding.

𝐄𝐥𝐞𝐦𝐞𝐧𝐭𝐬 𝐨𝐟 𝐬𝐲𝐧𝐜𝐡𝐫𝐨𝐧𝐢𝐬𝐚𝐭𝐢𝐨𝐧 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐲

– Constraints management and throughput analysis 
– Pull-based demand trigger 
– Just-in-time (JIT) 
– Perfect order fulfilment 
– Make-to-order (MTO) 
– Optimal inventory placement 
– Sales and operations planning (S&OP) 
– Collaborative inventory management 
– Everyday low price 
– An anchor player that ensures stability 
– Shifting demand and capacity 
– Risk mitigation