Someone (who shall go unnamed in this article) posted a comment in response to a LinkedIn post entitled Why Your Forecast Accuracy Hasn't Improved. Here's what the comment said:
I think that quite a few of us have given up on pushing for accurate forecasts and resorted to other options such as planning at the sub-assembly level and putting together strategies to allow for more "agility," i.e., firefighting capabilities. I agree… that companies think they can grab additional market share or shelf space by offering more and more options, more varieties of items. This makes planning at the end item, not only inaccurate but, pretty much invalid as soon as the new product pipeline is updated.
I applaud the honesty
Yes. I added the emphases in the quote.
While we have been observing this trend for many years amongst supply chain executives and managers, we have not very often actually heard the confession made explicitly.
I was quite struck by the phrase, "quite a few of us have given up…."
In the world of professional sports, it is perfectly acceptable to use the word "rebuilding" to describe your situation even if no actual rebuilding is going on with the team.
Similarly, so it appears, in the world of professional supply chain management, it is perfectly acceptable to employ the term "agility" when one really means "we're getting better at firefighting."
And, after having abandoned all hope of "winning" (read: real improvement), what does that say about our supply chain professionals' willingness to continue to "show up every day for work to collect a paycheck"?
Firefighting as a strategy
Saying that your management "strategy" is to improve your "firefighting" seems, rather, an admission that you have no strategy for real improvement at all.
We agree that it is certainly a strategic move by cities to decide they need to have and operate a fire department. In that sense, firefighting—and even improvement in firefighting methods—is a strategy in support of safety of the citizens.
Nevertheless, I think that analogy breaks down when we consider this scenario: If the fire department in Minneapolis, were to get called every day, every week, or even every month, to put out fires at the same three or four addresses, I am guessing they would take some other action.
I don't believe the city's leadership would simply say: "We need to get better at firefighting. We need to be able to respond more quickly and more effectively when these fires break out—again and again and again and again. We need new and improved fire engines, water hoses, and ladders."
That being said, I am nearly 100 percent certain that the "firefighting" mentioned in the comment in the opening paragraphs above was firefighting in the same few departments, the same few operations, the same few product lines, or the same few warehouses or vendors time after time after time.
I am going to be so bold as to say…
- If you have "given up" on expecting real improvement in your supply chain operations (internal or extended)…
- If you have managed to convince yourself that "supply chain agility" is just another term for "better firefighting"…
- If you have fallen to the point that "better firefighting" is your "strategy"…
Then you need help creating a real and effective POOGI (process of on-going improvement). There is no doubt in my mind about it.
You might want to begin here by reading some of the numerous success stories of companies that have broken through by applying truly demand-driven principles.
Why Your Supply Chain Needs a 'POOGI' [Whitepaper]
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