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Many wrong beliefs in Supply Chain are based on a limited view of the reality.
During my discussions with various supply chain teams, I have come across so many widely held beliefs. In most cases, these are based on good intentions of people. When I ask them why they think it should be true, their logic seems to be impregnable. How should we handle such situations?
Let’s illustrate it with the help of an example. One such belief amongst supply chain professionals is to push the finished goods inventory closer to the customers. Their logic looks right that it will help in faster customer service. When we dig deeper, this belief is based on the assumption that customer demand is deterministic. In fact, their current S&OP process also takes a similar view of the reality.
The moment I start discussing a stochastic demand scenario, they realize that the practice of pushing all inventory closer to the customers is flawed.
My experience suggests that a good way to deal with such beliefs is to expose multiple facets of the reality and check the validity of their assumption in each case. If it holds true in every case, it’s a good practice to follow. If not, we should challenge it.