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You can’t plan your compromises … Yes, you can.

Randy Littleson of Kinaxis on Response Management blog has a post about how firms are often kicked into “response mode” where in they’re trying to respond to the latest fire that is about to kill their customer service ratings. Isn’t it always like that or doesn’t it always feel like that? He is of the opinion, no doubt earned by consulting practice that it is virtually impossible to plan out the activities of the firm such that you can avoid/significantly mitigate the “response mode” state of affairs.

These deviations from plan are happening literally hundreds of times throughout the day in most organizations. It may be a key customer calling, a field failure that needs to be dealt with, an unexpected delay in receipt of a critical part of any number of things that “just come up.”
At the core to solving these problems is compromosing. Teams need to get together and figure out what tradeoffs and compromises need to be made on the spot to solve these types of problems….and they need to do so while weighing the impact on the rest of the business.

Well, you could if you wanted to.
Quite simply, you either have to have excess capacity built into you system (not so good idea) or have a system that operates at or near the lowest total lead time (better idea). I’m not saying that you’d be able to handle every “response mode” crisis hands down this way but a significant portion of the response mode crises ought to be mitigated by advanced planning. But that requires a different way of thinking and applying i.e. bringing in the fruits of applied queuing theory into the firm’s activities. One of the highpoints of my graduate education was putting this into practice – through Quick Response Methodology (QRM). QRM is the brainchild of Dr. Rajan Suri at the University of Wisconsin-Madison and I was part of a team that consulted with a manufacturing firm with the specific objective of reducing their lead times for spare parts.
If you’re facing any of the below:

  • Our biggest customer is demanding faster response time …
  • We provide a high degree of customization, and JIT is no longer helpful in our low-volume, high-mix environment …
  • Our shop floor has become very efficient, but it takes too long to get out a quote or process an order …
  • Our own response time is fine, but our supplier is another story …

Category: Reviews, Supply Chain Management, Supply Chain News, Supply Chain Software

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One Response

  1. Mr. Abraham,
    Thank you for your comments, and providing an introduction to your blog. I’ll be sure to keep track of your posts.

    I agree with your comment that carrying excess capacity, raw material, or worse, finished goods, is the least appetizing approach, and indeed, lead time reduction initiatives are a common way to improve responsiveness (although somewhat imperfect since lead times are nothing but approximations anyway). Also, like you, I do believe that better planning can lead to better responsiveness.

    I have seen that achieving true “breakthrough” in responsiveness however, can only be achieved by empowering the thousands of people involved in making course corrections due to unexpected events throughout the day. Establishing a Response Management competence means that individuals can understand the impacts of their decisions ahead of time, and can collaborate quickly and consistently to converge on the best course correction based on the current state of the business.

    I have witnessed this breakthrough with high tech companies such as, Jabil, Lucent, Teradyne, and many others, where frequent demand changes, engineering changes, yield variability, raw material shortages, outsourcing challenges, and impatient customers rule every single day. All these companies have planning tools, but without Response Management, they can’t solve today’s problem today.

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