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How do we create harmony among Supply Chain partners?
Supply chain professionals acknowledge the importance of harmony amongst various partners, both internal as well as external. While the end objective is clear, the path is often not so. Let’s see what the root causes of disharmony are and how we should eliminate them.
The main cause of disharmony is the lack of alignment in the partners’ actions. It is a common practice that the players work out their own actions, which may pull them in different directions and at different speeds. For example, if each player takes his own view of the final consumer demand and plans his activities, we end up with the bullwhip effect leading to shortages and surplus.
In order to create harmony, it is important that the partner with best visibility of consumer demand masterminds the entire system, which sends signals to various players about the actions required. If the system signal is missing, we end up in a state of disharmony.
Kanban created a simple system for such signals. TOC has a much more effective system of signalling, based on buffers created at strategic nodes in the supply chain.