Free Consulting When do you call Demand Intermittent? When ADI >= 1.32 and CV Squared< 0.49 ADI – Average Demand Interval CV – Coefficient of Variation. (Look those up. I didn’t invent it) When ADI > 1.32 and CV Squared> 0.49 You cannot really predict anything. (it’s called Lumpy series) When ADI < 1.32 and...
Back to Basics / Free Consulting Why should we ‘do S&OP’? (Sales and Operations Planning), if at all, Here is how I brainstormed with a learned guy the other day. Just for philosophy’s sake. 1) Check whether Unconstrained Forecast is ACHIEVABLE 2) Check if there are any events that can DEPRESS supplies and hence Sales....
What’s my biggest achivement as a supply chain consultant? I pruned about 55 SKUs (finished products) at a client. (roughly about 8% of the SKU base then) What’s the big deal? SKU proliferation is the single biggest deterrent of efficient supply chain operations. For every SKU pruned, you unleash significant capacity (a highly non linear...
I never managed to understand Product Life Cycle Management. The notion of it. What am I expected to do by knowing the ‘definition’ of product life cycle management? Marketing speak. I can’t know ahead of time anyway. How hard it is to teach that some products do not even take off in the market? They...
Supply Chain Free Consulting. Where does Product Mix Planning fit into the MRPII/Interated Business Planning/S&OP framework? I have Petroleum – I can make Aviation Fuel, Petrol or Polymers. I need to maximize my profits. That depends on what’s in demand, what’s cheaper and faster to make and what gets more margins, what’s easier to handle...
Supply Chain Free Consulting Tons of academic literature on ‘Inventory models’ in Production x Distribution systems. But the best-case awareness is on how to look up a z value and area under the curve assuming demand is normally distributed. Thats what they teach in B schools. if someone bothers to know the ‘math’. E.g. Half...
Supply Chain Free Consulting Why ‘value’ demand forecast at a warehouse/factory ‘level’ when forecast by sense implies forecast of market demand? Forecast OF ‘customer’/region /market demand’. Can’t the supply plan determine where to supply from? Esp. in a million-dollar software used by two and a half guys in the company? Answer IF there are multiple...
Decision Sciences or Management Science was an evolved discipline. Since 1950’s. Its just that the lingua franca of the same is now finding more acceptance in the world of corporations. 20 years ago, a bachelor’s grad in Statistics was unemployable. Now most of them have multiple job offers. Only 10 years ago, ‘average’ IT consultants...
Supply Chain Contracts have been reasonably well documented in academic literature. Some of them are also well understood and implemented too by large companies in some form or fashion. From as basic as VMI agreements, price contracts, value contracts, volume contracts, capacity contracts etc. to as advanced as revenue sharing contracts and buy back contracts....
Supply Chain Free Consulting – Pray for Shortages. (As a Business). – Even If there is no Shortage, create shortage. – You do not have to deliver on time. Just settle against option or cash payment. – Have the state engineer a policy in ‘national’ interest’. (e.g. Taxes on Imports from a particular source –...
