Email
sinha.rk.dr@gmail.com
How aggressive should the Supply Chain improvement targets be?
Most supply chain teams work on improving their company’s supply chain. They also set targets for improvement. A word of caution on these targets…
Improvement in supply chain should be focused on the overall system constraint. Additional improvements can be done on various plant bottlenecks. These improvements will improve the customer service and bring the company closer to its goal. Improving other parts of the supply chain are unlikely to improve the system performance, these are called by Dr. Goldratt as Chupchiks, minor improvements which take significant effort but fail to deliver significant benefits.
Once the improvement area is identified, we should set a target for improvement. How aggressive should this target be?
If we aim for minor improvements, say 5% or 10% improvement, we’ll most likely just tweak the supply chain parameters without questioning the underlying assumptions behind current policies, processes and practices.
Real breakthroughs are achieved if we set a very aggressive target, which is impossible to meet with the current ways of working. This forces us to challenge the critical assumptions and unleash changes in relevant policies, processes and practices.
Would love to hear from you how aggressive a target have you set for improving your supply chain…