One premise of economics is that when faced with choices of varying value, people will choose the greatest value. When they don’t, they are deemed irrational. The reality is that all of us make irrational decisions all the time, because decision-making is rarely clear-cut. Indeed, research over the last 40 Read more…
Ans: Demand Planning The biggest cost to companies is NOT the cost of employees, or raw material, or sales or even advertising.The biggest cost to companies is the imbalance between the demand for their products and the companies ability to meet the demand. Unfortunately, many companies tend to ignore this Read more…
2 different quotes come to my mind when I read ‘Keep it simple’. The first is the quote by Steve Jobs who said, “Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because Read more…
Apple CEO Tim Cook joined as supply chief when Apple was struggling, and with his just-in-time inventory genius turned things around.Cook loathes inventory, telling Forbes he finds it “fundamentally evil”. “Inventory is like dairy products,” he has also said. “No one wants to buy spoiled milk.” Thanks to his JIT Read more…
A Spanish clothing retailer, Zara, can bring new products to market in three or four weeks by holding materials in undyed form and regularly feeding information about market demand back to its suppliers. This allows it to react quickly to changing demand patterns. When it figures out which items are Read more…
There are five requirements for any customisation supply chain strategy to succeed: 1. 𝐂𝐮𝐬𝐭𝐨𝐦𝐢𝐬𝐚𝐭𝐢𝐨𝐧 – the experience must be unique to each customer. 2. 𝐅𝐥𝐞𝐱𝐢𝐛𝐢𝐥𝐢𝐭𝐲 – the personalised nature of the experience must adapt to the changing needs of the customer and the environment, including product configuration and flexible delivery Read more…
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 Read more…
Most popular case study for Rationalisation is from Gillette in its 2004 supply chain turnaround. Aimed at reversing a major inability to fulfil orders reliably, it embarked on four improvement initiatives: minimising complexity, improving demand-supply planning processes, improving supply planning processes and establishing optimal support systems. SKU rationalisation was central Read more…
For a certain period of planned time, it makes sense to choose a strategy and orient resources to it rather than trying to be excellent at everything.Companies can become stuck on a particular stage of lifecycle and prevent themselves from getting the low hanging (but exponentially greater) fruits of the Read more…
A low-cost strategy implies a supply chain strategy that cuts costs, and indeed, companies that follow this strategy typically favour rationalisation and synchronisation strategies over innovation and customisation. A focus strategy implies a supply chain strategy that helps to make the product or service more special in the eyes of Read more…