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Why do we take smaller steps on a slippery road?
When we walk on a slippery road, we intuitively take smaller steps. We may like to explain it through Physics that angle of incidence should be high (near vertical) when the coefficient of friction is low (slippery road), so that we avoid slipping. However, the fact remains that we don’t actually think in scientific terms… it comes naturally to us (even kids get it pretty soon).
Uncertainty of demand is akin to a slippery road… the higher the uncertainty, the more slippery the road is. It means we should be taking action more frequently and in smaller doses (smaller steps).
What does it mean for supply chain professionals in an uncertain demand scenario?
Logistics team should send smaller consignments, check the revised demand scenario, and readjust the next consignment accordingly. Production team should take smaller production runs, check the revised demand scenario, and readjust the next production run. Procurement team should order smaller quantities, check the revised demand scenario, and readjust the next order.
If the entire supply chain team takes actions more frequently and in smaller doses, we can navigate the slippery roads quite effectively. On the other hand, if we continue to act in large batches, we are likely to slip!
Would love to hear your thoughts on how you manage a volatile demand scenario…