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Supply chain excellence requires managing by exception.
We have discussed the two basic building blocks of a good supply chain – consumer-focused design and an agile execution system. While these two are essential prerequisites for supply chain excellence, these are not sufficient.
To achieve excellence in supply chain, we need to put in place the process of managing by exception. The reason is simple. Even the best designs would become dated as we move forward, since markets would evolve on a continuous basis. Some of these market changes would put the supply chain under stress and call for tweaking of the design parameters.
How do we find out when to tweak the design parameters? The answer lies in monitoring exceptions. Every time we encounter an exception, we must analyze and act on it fast, lest it should repeat itself in future.
The more frequently we monitor and act on exceptions, the better the supply chain would perform. Daily frequency leads us to excellence much faster.