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What causes Yo-Yo in Supply Chain performance?
Several Supply Chain leaders struggle with their ever-shifting focus between improving product availability and system inventory. The focus keeps shifting across quarters between managing stockouts and reducing overall inventory in the system.
Why is it that the improvements done in one parameter worsen the other one and vice versa? Is there a way out?
The Yo-Yo in performance occurs if we try improving the Supply Chain performance without improving the fundamental Supply Chain capabilities. If we don’t focus on improving the capability of Demand Sensing, Flexibility and Responsiveness, the improvements we see are temporary and often worsen performance on the other parameter.
If we want to improve product availability with lower system inventory, and sustain it over time, we must work on improving the fundamental capabilities.
Would love to hear from you if you ever got trapped in the Yo-Yo performance…