Recently I posted a couple of articles that raised the question of “Who has the power—your planners or your expeditors?” After the second article was published, one of my contacts on LinkedIn, who also happens to be an inventory management consultant, sent me a message.
This inventory management consultant relayed to me an insightful anecdote. He told of his experience regarding a plant “that runs 24/7.”
As “products come off line,” he says, they “are [immediately] palletized for shipment to outside operations.”
One early Friday evening, he tells me, “a message went out to [multiple] cellphone contacts saying, ‘Emergency! We are out of pallet edge protectors.’”
Since he was clearly familiar with this firm's operations, he gave me some more background. “[These] edge protectors are… vendor managed inventory….” he added.
Nevertheless, my contact told me, the cellphone messages triggered “a mad scramble. People [nearby] came in from home." He went on: the “supplier was contacted [and the supplier’s] rep personally drove over [some] edge protectors.”
The “immediate crisis [was] averted,” thanks to the quick response from the supplier. However, he continued, “Throughout the weekend, [internal] dialogue continued as to the cause” of the shortage, and the required emergency action.
The truth was later revealed that the “edge protectors [had actually been] delivered Friday afternoon,” well before the so-called emergency ever arose.
The problem was that, while the edge protectors had been received and were sitting on the dock, they had never been “received into system or put away.”
My LinkedIn contact told me, “The warehouse supervisor said, ‘I don’t know what the big deal is. [The edge protectors] are shown as optional on the BOM!’”
The anecdote concludes this way: “At Monday morning's operations meeting, the planner ended up sitting directly opposite the company’s vice-president. The VP looked at Bob* and said, ‘Bob, how could you let us run out of edge protectors?"’
“What do you think Bob is going to do?” my LinkedIn friend asks.
* Note: Names have been changed to protect the innocent.
This story is not unique
I don’t know about you, but I am 100 percent certain that the anecdote my LinkedIn contact brought me (or something very similar) has been repeated thousands of times, and will yet be repeated thousands of more times in the next 30 days, at companies all around the world.
In fact, I am so certain that you are familiar with just that kind of occurrence that I am not even going to finish the story.
Despite the knowledge that our traditional planning systems are, in many respects, just plain broken, it is the planners who must rely on these broken systems. These same planners are then, all too frequently, “called on the carpet” to explain the outcomes—bad outcomes that are as often as not the result of inputs and algorithms that are far outside the span of control of the planners.
Meanwhile, the expeditors and “firefighters” get the glory for rescuing operations from otherwise certain disaster. (Fortunately, in many small companies, the “planners” are the expeditors and firefighters.)
And, in our anecdote, the problem was much, much simpler than a poor planning algorithm or bad inputs. It was nothing more than data latency or a failed business process.
Nevertheless, I think you get my point about who is blamed.
Demand drive unites the functions
The proven experience of companies that have implemented a conscientiously applied demand-driven program as articulated by the Demand Driven Institute have shown that DDMRP (Demand Driven Material Requirements Planning) can bring an end to “the blame game,” while improving performance across an array of crucial metrics, including customer service levels and return-on-investment.
You should look into it. We can help.
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