We have produced a series of brief videos that we call Infinity Loops that specifically address the doubting Thomases. These videos quickly illustrate supply chain scenarios with never-ending problems that need to be solved. Please take a few moments to view some or all of the scenarios to see which ones apply to you. Then share the scenario(s) with other decision makers in your company.
Logistics Managers Scenario
Watch this brief Infinity Loop that illustrates this never-ending problem – To rush the order or not to rush the order? Be it nobler in the mind to suffer the slings and arrows of running out or the blame for outrageous expedited delivery bills for raw materials and finished goods? (With apologies to Hamlet!)
The Owner’s Scenario
My company’s experiencing impaired earning. What’s my way out of this mess? Should I fire the CEO to hold him or her accountable and then suffer from the inevitable delays training somebody new will surely require or keep the CEO and continue to fail to improve? Watch this brief infinity loop that illustrates the never-ending problem.
When you are the one who receives shipments from your suppliers, should you take the risk of being seen are too slow because you ensured perfect accuracy or should you receive really quickly an hope the errors the appear in the warehouse as a result are blamed on somebody else? Watch this brief infinity loop that illustrates the never-ending problem.
Purchasing Agent Scenario #1
Do you have time to order more often in smaller batches or are you forced to order in large batches which drive up inventories? Do you treat the small suppliers’ products with the same care you lavish on the suppliers that you spend the most with? Watch this brief infinity loop that illustrates the never-ending problem.
Purchasing Agent Scenario #2
Is it better to negotiate for faster delivery or lower costs? One screws you with high costs, while the other screws you with shortages. Do you get blamed either way? Do you feel like you’re stuck in a vice? Watch this brief infinity loop that illustrates the never-ending problem.
Purchasing Agent Scenario #3
Can you afford the time to expedite that comes when you wait until the last minute before ordering to reduce stock levels or must you order way early and increase the company’s exposure to obsolescence? Who gets the blame when you do the right thing? Watch this brief infinity loop that illustrates the never-ending problem.
If you buy just enough to cover the expected demand, there will be shortages and lost orders, because the forecast stinks! (Why can’t anybody forecast better?) On the other hand, costs, write offs and investments rise when we hold high inventories of raw materials, WIP and finished goods. Watch this video to learn more.
CFO’s (or controller of POs) Point of View
Are you responsible for keeping tight controls on the company’s spending? If you issue a new PO for each order, operational costs increase and purchasing runs out of time but of you authorize blanket orders inventories can increase. Either way ROI gets worse. Watch this video to learn more.
The argument between the CFO and the Sales Dept
If you are in sales, does the CFO allow the right amount of inventory or do shortages plague the plant’s ability to deliver when the customer needs your products? If you are the CFO, after you authorize more raw materials, do write-offs impair profits?