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The primary objective of operations is to improve Flow in the Supply Chain.
Most companies have some difficulty in coordinating the actions of various functions to meet consumer demand in time. The primary reason is the lack of flexibility and the delay in modifications to the original functional plans. As the consumer demand evolves during the planning horizon, we must adjust the flow of products to the new reality. If we fail to do it, the flow gets disrupted and results in either a shortage or a pile up of excess inventory.
Every single operation, be it procurement, production, or distribution, should be done at a time when the flow demands it. Product flow should be the primary driver to decide when to start and when to stop a particular operation.
Subserving individual operations to the improvement of product flow is the key to improve both the product availability and the product freshness simultaneously.
Companies have often experienced a 50% reduction in stockouts and a 30% reduction in inventory by establishing and adhering to the rules of flow.