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How should we deal with variations in Supply Chain?
In my last post, I mentioned that certain variations should be minimised and certain others embraced. How do we identify these two types?
The difference lies in the source of these variations.
Certain variations are induced by our internal supply chain processes. These could be related to product quality, physical characteristics of the product such as size, shape, weight or colour, delivery times, etc. We should attempt to minimize these variations so that the end consumers experience a more predictable offering. Six Sigma methodology comes in quite handy to tackle it by standardizing the backend processes.
On the other hand, there are certain variations induced by the external environment. These could be changing consumer preferences, consumer expectations, their evolving unmet needs, Covid protocols, shipping bottlenecks, etc. The company doesn’t have a direct control over these external forces and should not resist them.
If we look back in time, various species have evolved through such induced variations (mutations), which are nothing but nature’s way of experimenting and selecting the fittest to survive.
We should embrace the externally induced variations instead of resisting them. Adapting our supply chains to these variations makes our operations more robust and antifragile. It also gives us a competitive edge in the marketplace!