What dogmas in Supply Chain Management are not relevant any more?
As time passes some beliefs accepted as truth tend to become irrelevant. In your opinion, what are some of the dogmas in supply chain management that are not relevant any more?
Answers (5)
That there are any dogmas.
Vivek
I think that most people out there think that you can not utilize DC bypass on containers arriving inbound unless you have the cartons already labeled for final delivery.
I know that this is not true as I am able to load my containers in China, move them across the ocean, allocate the goods when they arrive in the US, have the container taken to my small package carrier where they are unloaded and labeled while going through their Ground operation.
I have been able to reduce my labeling cost by 50% along with moving my goods a day quicker to my stores.
Charlie
Martin S
Chief Operating Officer at Wireless Logistics, Inc. and President at The Stockdale Foundation
That a WMS is needed to ensure timely and accurate inventory data inside the four walls. What is really needed is the means to automatically capture the relevant data and move it into the host system in real time or near real time.
Links:
Martin S also suggests this expert on this topic:
Alex R
Global Logistics Change Manager at Syngenta AG, Speaker at Supply Chain Conferences
Best Answers in: Professional Networking (2), Occupational Training (1), Planning (1), Quality Management and Standards (1), Professional Books and Resources (1), Career Management (1), E-Commerce (1)
Hi Vivek,
Thinking about your question, I see a few dogmas that got hits in the last 10 years:
1) Advanced planning software as a panacea
The importance of mid-term forecasting and constraints-based planning optimization based on constraints has proven less relevant than the level of end-to-end visibility of both supply and demand for your value chains.
With the trends of supply chain fragmentation and outsourcing, collaboration models and supply partnerships have taken the upperhand and algorythms and advanced software fuctionality became less relevant.
The retail model now fits beter than the manufacturing model to manage a supply chain well. And systems need to talk fast rather than optimize.
2) IT Projects to integrate supply chains
The myth that you can simplify reality and consider the supply chain as one entity. It is not easy to work work on end-to-end supply chain fixes involving many functions. Very few companies operate only 1 supply chain and most supply chains are integrated at some points. Fixing one supply chain should be done considering aspects for other supply chains.
Supply chain improvements are as complex to implement as surgery.A change here can really destroy the tissue or flow and needs to be done involving all the relevant specialists (sales, marketing, production, logistics, purchasing,...).
3) We (Marketing) understand the customer
Customer Service is not only OTIF (Order On-Time and in full). Segmentation of Markets, Customers and Products is as relevant in Supply Chain Management as in Marketing. Very few supply chain experts get the opportunity to have sufficient intimacy with customers to really work on the customer service aspects of their job.
Hope this helps,
Alex
I think Alex Rotenberg - who happens to be an ex-colleague - has identified the biggest myth, namely the use of "APS systems as a panacea". The key word in Alex' reply is panacea. We all thought that the APS provided a perfect answer forgetting that the answer was based upon an incomplete and inaccurate understanding of demand and an incomplete and inaccurate model of the supply chain. We then tried to force fit reality to the "ideal" plan generated by the APS. What is more, there are many "soft" issues that need to be taken into consideration that simply cannot be represented in a mathematical model and require human judgment to incorporate and evaluate the nuances implicit in "soft" issues.
Much as we do with a statistical forecast, we need to realise that a plan generated by an APS may be close to what can be achieved, but it is the starting point of a planning cycle, not the end point. Human judgment needs to be applied and compromises need to be agreed within enterpises and between enterprises.
I don't believe the value of a plan has diminished. The dogma that is no longer relevant is the belief that one can create an optimal plan and force reality to fit the plan. Emerging supply chains require more collaboration and less control; more coordination and less optimization. What is more important is to have the ability to detect changes, evaluate the consequences of the changes, identify the people responsible for dealing with the consequences, and provide a collaborative environemnt in which they can share, record, and evaluate scenarios for dealing with the situation. And in today's multi-tier outsourced supply chain, the team is likely to include people outside of the company, be they customers, contract manufacturers, or suppliers.
Evaluating alternate scenarios requires a model of some sort. After all, at the very least a bill of material is required to to explode finished goods demand into part demand, lead times and capacities are required to make a (near) correct statement about when the parts will be needs, and sourcing rules and contract terms are required to determine from where they parts will be sourced and at what price. This information then needs to be rolled up to determine the effect of each scenario on financial and operational measures such as revenue, margin, inventory turns, customer service, etc. And this needs to be done in a timely manner in order to be effective. Gone are the days of waiting 5 hours for an optimization run.
