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sinha.rk.dr@gmail.com
Are you affected by the ‘Year End Syndrome’ in Supply Chain?
My interactions with several supply chain leaders indicate that year ends, like today, cause a lot of additional work and stress to their team members. They try jacking up production to improve plant efficiencies, expediting delivery to customers for revenue recognition, and delaying raw material receipts to control inventory. Sounds familiar?
Most of these stressors have a root in the performance measures used to evaluate the teams. For example, sales teams are often measured on primary sales, planners are measured on inventory value, production people on plant efficiencies, and the entire management team measured on profits, which are significantly impacted by the accounting practices. Each of these measures distorts the supply chain actions in favour of local functional optimisation at the expense of global system optimisation.
We should remember that the customers and the business itself are better served if we take the global systems view instead of local functional view.
Companies, which have adopted TOC principles and taken the global systems view, experience none of these year-end pressures…