Email
sinha.rk.dr@gmail.com
How do you make your supply chain more responsive?
Responsiveness is a key capability required to synchronize supplies with demand on an ongoing basis. While most supply chain professionals now realize the importance of fast response, they often struggle with the route to achieve it.
Improving supply chain responsiveness requires a series of improvements in various processes. I will cover it partly in this post and balance in subsequent posts.
The first improvement area is demand latency, which is the time lag between the downstream consumer-facing nodes experiencing demand and the upstream nodes getting this information. For example, if retail inventory breaches the stock norm, retailers would know about the possibility of a future stockout. However, they may have the practice of ordering only once a week. This delay makes the supply chain less responsive and may lead to stockouts.
Many companies follow this periodic ordering practice with their distributors and dealers since they are served only once or twice a week. Even if supplies are bunched, orders need not necessarily be bunched.
Delinking the frequency of ordering from the frequency of supplies is a good first step in making the supply chain more responsive.