My ill Supply Chain

What are the symptoms?

1. Everybody complaining about the forecast

Projected business levels led to prepositioned inventory and now we have excess inventory for products we cannot sell and stock-outs and shortages for our bestsellers. A perfect recipe to make our customers very unhappy but also to make our financial director cream at us.

“Forecasting is very difficult, especially if it's about the future”

“The only function of forecasting is to make astrology look respectable.”

“The trouble with forecasting is that it's right too often for us to ignore it and wrong too often for us to rely on it.”

2. Planners operating as a fire brigade working long hours trying to build-up inventory and limit number of shortages

As we assumed the numbers we received from Sales and marketing were reliable, and planned to supply for these volumes we get surprised daily by unexpected or unmet orders. Our plans must be changed and adjusted all the time.

“Planning is bringing the future into the present so that you can do something about it now”

“He who fails to plan, plans to fail”

“It pays to plan ahead. It wasn't raining when Noah built the ark.”

3. All partners in supply chain working with older versions of the Forecast and applying their own rules of interpretation to each number

Check-out:

http://www.shmula.com/the-bullwhip-effect/310/

4. Poor Customer Service figures and non-budgetted expenses for supplied products

5. Customers buying from competitors