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Why do we have so many firefighting instances in Supply Chain?
Most supply chain teams struggle with too many issues on a day-to-day basis. Many of these are of a firefighting type, leaving little time for systemic improvements. While we do empathize with the harsh realities encountered by them, have you ever wondered what the root cause could be?
Supply chain planning and execution are perceived as complex, with so many uncertainties out there, in areas such as demand predictability, transit time, production consistency, and vendor reliability. Prevailing practice is to simplify it by imposing certainty on these intrinsically uncertain events. For example, teams end up taking demand as deterministic (based on forecast), standard lead times, average production rates, reliable supplies, etc.
When the reality of uncertainty strikes, we see demand surges, transit delays, production breakdown and late deliveries, leading to firefighting. Is there a way out?
People impose certainty because they are uncomfortable with noise accompanying the signals. The solution lies in being comfortable with noise by designing strategic inventory or time buffers in the supply chain for smooth operations. These buffers act as shock absorbers and deal with the day-to-day noise.
DDSC and TOC help us immensely in this regard.