Are You Planning To Fail?

By Narayan Laksham and Richard Sherman

The problem with managing demand and supply variability in the supply chain stems from the inability of traditional planning systems to solve the bullwhip effect, a problem demonstrated by Prof. Jay Forrester in his 1957 computer simulation and subsequent HBR Article on Industrial Dynamics. New breakthroughs based on Lean principles and systematized with Web-based applications enable companies to create demand responsive supply networks to increase customer service, liberate working capital through significant inventory reductions, manage suppliers, and improve Return on Invested Capital (ROIC) from their operations.

competing in today’s global marketplace requires companies to profitably respond to the dynamics of market demand in a timely manner. What may seem a simple proposition in theory is, in reality, extremely difficult given the complexity of today’s global supply chains coupled with increasing pressure to cut costs, decrease inventory, and raise profit margins.