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Focus on only a few carefully crafted improvement projects in Supply Chain.
I mentioned in my last post that supply chain teams should focus their time, effort and resources on only a few carefully crafted improvement projects. How do we identify these projects?
The key lies in the concept of ‘leverage points’. These are the few areas where even a small improvement has a much bigger impact on the performance of the whole supply chain.
If we take the entire supply chain, from vendors till consumers, it would have a single overall system constraint. This constraint restricts the overall system performance and prevents the system from achieving more of its goal units. The constraint can be in demand, capacity, supply, or cash. If we improve the constraint, it has a direct major impact on the system performance.
Once we identify the overall system constraint, we should put all our efforts in elevating its performance. There are specific tools in TOC for this purpose. If the organisation focuses on this constraint and improves it, the time, effort and resources used for this purpose will yield very high returns.
Do reach out if you need help in identifying your system constraint and crafting improvement projects to elevate it…