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Flow vs Freeze
Supply Chain effectiveness is all about maintaining regular and smooth flow. The flow should match the system throughput.
Of course, we need to throttle the flow to avoid flooding downstream. We also need to step up the flow to avoid drought downstream. It’s akin to how rivers can be regulated to maintain regular supply, without drought or flooding.
Maintaining this smooth flow requires continual adjustment of supplies to match the system demand. What happens if we freeze the flow rate for a period? If the downstream consumes less, we end up with excess inventory and ageing stocks. If the downstream consumes more, we end up with stockouts.
Our supply chain planning and execution systems work best when we follow this simple guideline.