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How do we know that we have identified the right actions for Supply Chain improvement initiatives?
Improvement initiatives in Supply Chain are typically aimed at eliminating certain Undesirable Effects (UDEs). These could be in the area of product availability (stockouts, low OTIF), product freshness (obsolescence, products with short balance shelf life), etc. Teams identify the root causes for these UDEs through a logical cause-effect analysis and plan corrective actions to eliminate the root causes.
How do we know that the root causes have been correctly identified and the corrective actions correctly worked out to eliminate the UDEs? Learnings from Dr. Goldratt help us tremendously in this endeavour.
Every substantive action taken to eliminate the root cause will manifest itself in terms of multiple effects. Some of these are highly desirable while some others may not be (Negative Branches). We must take mitigative measures to trim the negative branches and look for all the predicted positive outcomes. For example, actions to reduce stockouts should also result in lower obsolescence, improvement in balance shelf life, faster delivery, etc.
If we observe all these positive outcomes simultaneously, we can be confident of having taken the right actions. Else the initiative needs to be fine-tuned further.