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How do we improve flexibility in logistics, production and procurement?
Most supply chain teams are unaware of how inflexible their supply operations have become over a period of time. While they do feel that the operations should get more flexible, the path is often unclear. As a result, they keep trying various techniques like JIT, SMED, etc. but the overall system flexibility doesn’t improve. Is there an easier way out?
One of the time-tested techniques to expose the real hotspots is to shrink the comfort zone. In the supply chain context, it can be accomplished by allowing the sales forecast to change more often. While some of the functions would cope up with the requisite improvement in flexibility, some others may struggle, giving us clues on the areas for immediate improvement.
If the production team struggles to make the products available, we should look at production batch sizes, setup times, production flow, etc. If the hotspot is in procurement, we should focus on supply lead times, MOQs, etc.
Once all the teams are comfortable, we should make the forecasts even more flexible and finally move to supplies synchronized with actual demand.