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How to make your Supply Chain more agile and efficient?
My interaction with several supply chain teams indicates that they love their current design, even when it is sub-optimal. That’s largely because they consider alternate designs as an ‘either-or’ option instead of an ‘and’ option. Let me explain with a few examples.
When it comes to deciding on MTS and MTO, most FMCG companies prefer MTS, whereas industries like machine tools prefer MTO. Should it be such a binary option? If we go back to the basics of supply chain design and consider consumer tolerance time versus supply lead time, most industries should have a hybrid of MTS and MTO. The moment we acknowledge that a hybrid is possible, the supply chain can be made much more agile and efficient.
The same holds good for several other options… Demand Driven Supply Chain vs Forecast Driven Supply Chain, routing finished goods through RDC or sending directly from factories to CFAs, own manufacturing vs contract manufacturing…
Let’s open our mind to consider the possibility of co-existence of these seemingly opposite ways of operating.
I am reminded of ‘The Genius of AND versus the Tyranny of OR’…