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A major cause of Supply Chain issues is the rigidity in forecasting.
The process of demand forecasting and consequent supply planning has become quite rigid over a period of time. Even if there are clear signals that the demand pattern has changed, we hold on to the earlier forecast for much longer than is necessary.
Why don’t we allow the sales team to revise the forecast as often as they want? After all, they are close to the market and would sense if the demand pattern is shifting. The real reason may not be palatable to many supply chain professionals. We refuse to update the forecast because the back-end fulfilment processes lack adequate flexibility and responsiveness. These processes include logistics, production and procurement.
Customer service actually suffers not because the forecast accuracy is poor, but due to poor flexibility and responsiveness of the supply system. If we want customer service to improve, the path to improvement passes through the supply system.