Ben YoKell, Sr. Manager, SIOP Practice
Wednesday, February 29, 2012
I’m not sure if it’s because my parents were “health nuts” decades before the term was even coined, or if it’s all the locally-produced, fair-trade, carbon-neutral, organic superfoods I’ve been eating lately, but it seems to me that supply chain planning efforts have yet to fully capitalize on something increasingly well understood and applied in personal wellbeing: a total systems approach. The idea that our body’s health is driven by the dynamic interactions of diet, physical wellness, emotional stability and spirituality doesn’t seem to have translated into quantitative initiatives in the supply chain planning world.
Your head hurts? Was it something you ate? Are you dehydrated? Overtired? Stressed out? The best medicine for your pain depends on the body’s subsystems in distress and the related interactions. So which should you try first: Sleep, water, meditation, or ibuprofen? Perhaps ibuprofen will help for a bit, only for the headache to return some hours later because you keep drinking that same drink – the one you know isn’t really good for you, but you keep doing because you’re stressed and out and short on sleep in the first place. Yes, a pill would be easier, but the reality is you need to drink some water, meditate, and then go to bed. Yet even this is a short-term solution – if you don’t fundamentally change your behavior, your headache will surely return.
Your stock outs are rising? Should you work to improve your forecast accuracy? Reset your safety stock targets to better match your exposure to uncertainty? Optimize production schedules and plans to free up more capacity in order to respond better to variability? All of the above? Just like your own health, the best medicine for a supply chain in distress may not be a targeted painkiller to address a short term symptom; but rather a set of coordinated initiatives prescribed by a practitioner who is focused on balancing the tradeoffs across the extended supply chain. This type of approach – one focused on improving the health of the supply chain holistically– is at the core of the Sales, Inventory & Operations Planning services offered by Chainalytics.
It’s time to heal supply chains with approaches that focus on the whole instead of the parts. The future of supply chain planning is moving away from sequential planning processes that pass constraints from one planning activity to the next, toward processes which consider multiple inputs and decisions simultaneously. I believe this idea is going to take off in the same way as it has in personal health, and I’m excited to see it manifested in increasingly sophisticated offerings that directly capture the dynamic relationships of complex supply chains.