Do you get supply chain surprises?
There’s a good article here over on SupplyChainDigest entitled “Do you get supply chain “surprises?”" It’s written by Tom Wallace (to learn more about Tom, see his website here), a noted expert on Sales and Operations Planning (S&OP).
The article talks about the various challenges that companies face in dealing with supply chain surprises. Tom goes on to explain how you can use the S&OP process to deal with these surprises.
What’s not detailed in the article are some of the tools required to deal with surprises within this process. Participants in this process need to be armed with consistent and up-to-date visibility into demand and supply and have tools for rapid scenario analysis to enable sense and respond. When surprises happen, you’re really trying to figure out a way to “re-balance” supply and demand to enable a profitable demand response (Tom’s example is of a large customer sending in a signifcant, yet unexpected, order). If supply and demand can’t be re-balanced, then a compromise is required to determine the best course of action, one that balances all of the metrics the company is driving to, such as customer satisfaction, revenue, margin, inventory, etc.
Supply chain surprises are increasingly becoming the norm. Through the proper processes and by empowering key decision makers with the necessary visibility and tools to sense and respond to such changes, companies can gain a competitive advantage vs. those companies that are slow to react.
