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The underlying problem in most Supply Chain issues is high lead time.
Some of the most frequent comments heard from Supply Chain teams:
‘Last month end saw very high overselling in some of our fast movers and, as a result, we were stocked out for a week at the beginning of this month...’
‘Sales team didn’t sell what they forecast. So, we are stuck with high inventory...’
‘Customer is asking us to expedite the delivery. Such expediting is costly and highly effort intensive...’
‘We lost a large order as the customer wanted delivery in just 2 weeks instead of the standard 4 weeks...’
If such comments look familiar to you, pause for a minute and think about the root cause of these issues. These are just manifestations of an underlying problem, which should be addressed.
The common reason in these cases is high lead time in responding to unexpected demand. The improvement direction is called ‘Lead Time Compression’ to ensure faster response.
Is ‘Lead Time Compression’ a part of your ongoing improvement journey?