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Does your supply chain focus toggle between conflicting priorities?
Many supply chain teams struggle for long term focus as the top management priorities keep toggling between three conflicting objectives from quarter to quarter. These three main objectives are revenue growth, profit growth and working capital reduction.
The way supply chains are structured in most companies, these priorities lead to conflicting actions. Focus on customer service to improve the topline may affect profits and lead to higher inventory. Focus on profits could affect the topline growth. Similarly, focus on inventory reduction may affect the topline.
The underlying reason for such conflicts is the fact that we are not focusing on the leverage points, which improve all the three objectives simultaneously. Better demand sensing should improve revenue, profits and lead to lower inventories. Same with improvement in flexibility and responsiveness in the supply chain.
Would you like to redesign your supply chain to remove the conflicts and improve all the three objectives every quarter?