Sunday, September 8, 2013
The Importance of Effective Inventory
On the first of class as Professor Zak talk the class and described what Supply Chain Management was and mentioned a key component to the practice, variability is not good. While the class is still in the first few weeks of the mini key components have quickly risen of to what makes a good supply chain management. A perfect exam of that has come with the recent case study that we've gone over a class. The case showed many of us that having up-to-date technology to have a solid system, and at times it may deter the effectives of a system. Yet, two of the largest consulting firms (McKinsey & Bain) in the world make key points to the supply chain management practice. 1) have flexibility in your system, and 2) inventory must be managed well for a company to succeed.
McKinsey articles speaks of the economic nature of the world economy has its effect on traditional supply chain practices. Creating a domino effect that can seriously hinder a company's performance. This is referred to as the "bullwhip effect", yet while often times this may lead to extremely complicated IT solution that may possibly bring more problems than solutions, thus often times the simply solutions is the best.
Equally Bain & Co. has seen there own experiences bring a light on this very topic. Two Bain consultants share their insights on the topics and provide 10 key things to note when dealing with a supply chain issue. They call these 10 tips the inventory check, all in an aim to improve the efficiency of any supply chain for an organization. An again the notion of simplicity comes into place. From making sure the logistics and numbers make sense to evaluation of the inventory of your respective company. These two respected consulting firms also acknowledge the fact that creating some sort of system where individuals have specific roles and duties that they become of the masters of, thus creating a change where it is a smoothing running machine.
Yet I can't help but think of these two global companies can learn a thing or two from the Indian men's delivery service. Here are two firms who hire some of the brightest people from some of the best schools in the world. But there also uneducated individuals from around the world who have figured out an array of solutions to make their respective supply chain efficient. Yes, I do recognize that situation is different and it does get extremely complicated in large companies. But we can all learn from even the simplest supply chain models. As the mini progress I am eager to see how different situations are approached and solved.