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sinha.rk.dr@gmail.com
Agile initiatives in Supply Chain build on each other to produce amazing impact on performance.
Taguchi, in his famous work on ‘Theory of Experiments’, distinguished between ‘Main effect’ of taking an initiative and ‘Interaction effects’ of taking several initiatives together. TOC distinguishes the impact between improvements on the leverage points versus improvements in other areas.
If we use these two together, we can design a set of initiatives at the leverage points to get substantial positive interaction effects. Let me explain it with an example.
Let’s take a Demand Driven Supply Chain. If we deploy a dynamic Demand Sensing engine at the front end, we get significant improvements in product availability and product freshness. If we also improve Responsiveness by compressing lead times, the resulting impact is ‘2 + 2 > 4’. If we now improve Flexibility in back end operations as well, the impact would be ‘2 + 2 + 2 >> 6’.
Magic happens when we improve all the three core supply chain capabilities of Demand Sensing, Responsiveness, and Flexibility at the leverage points.
Are you ready to witness the magic?