Having your supply chain management team make decisions about questions like the following is HARD if they are looking at screens like the one you see here.
- What to order?
- When to order it?
- In what quantities?
- With what priority?
On the other hand, this is EASY…
Having your supply chain management team answer the same questions while looking at something like the accompanying dashboard is EASY:
You really don’t even need to know how to read the language. If the dashboard were in French or Polish, you would still be able to figure it out probably.
You would think to yourself:
- RED before YELLOW before GREEN
- Smaller percent values before larger ones (Why? Because you see that the first YELLOW value—38.06%–is larger than the largest RED value—29.88%.)
- Replenish the quantity indicated in the quantity column
Buffer Status as the “universal language” of supply chain management
This easy-to-decipher language, when applied in a demand-driven MRP (DDMRP) or demand-driven S&OP environment in accordance with the principles articulated by the Demand Driven Institute is not only intuitive and universal, it also incorporates everything your supply chain managers need to know at any given moment:
- Quantities on-hand
- Quantities on open replenishment orders
- Quantities in demand spikes within each SKU’s spike horizon
- Quantities required to cover average daily usage
- Quantities required to meet demand today (plus any open backorders)
- Quantities estimated to meet any anticipated changes in demand (e.g., seasonality, promotions)
- Quantities required to cover typical demand variability
- Quantities required to cover typical supply variability
Yet, with all that included, still no complex screens! Just a color and a number to indicate priority, and another number to tell you the current actionable quantity.
It really is that simple.
Why isn’t YOUR supply chain that simple?
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