Struggling to balance inventory and production schedules?

Balancing inventory and production schedules can feel like trying to juggle flaming swords while riding a unicycle. ????? But with the right strategies—like forecasting demand accurately, optimizing your supply chain, and regularly reviewing your inventory levels—you can keep everything in sync. Prioritize flexibility, automate where you can, and remember: it's all about finding that sweet spot between having enough stock and not drowning in it. Too much inventory can stifle cash flow so strive for a Just-in-Time (JIT) with a little buffer stock. I once owned a bamboo company. It was difficult to determine inventory levels with a new product and we ended up sitting on $150k+ over the winter months. I never let that happen again!

Demand forecasting requires the inputs from top management and Sales strategies guidance as well. Historical trends may not repeat all the time, to balance the supply and risk, supply chain people would need the alignment from all stakeholders to decide how to balance the inventory and risks. There’s no perfect demand forecast, forecast never gets 100% accurate. But without planning ahead, stock outs could cause the company lost competition in the market place.

To achieve a balance between inventory and production, it is crucial to consider the simultaneous equilibrium among Inventory, Throughput, and production Cycle Time. These three elements are interconnected through Little's law (where inventory = Throughput * cycle time). When making decisions regarding each of these components independently, any adjustments may have adverse effects on the other two aspects. For instance, aiming to minimize inventory levels in pursuit of a zero inventory approach could lead to a reduction in operational capacity, an increase in production cycle time, and ultimately result in customer dissatisfaction.

Depending on the complexity of the production process and the length of the planning Lead times, safety stocks can be planned in different stages in the pipeline to be able to react the demand fluctuations. All planners have to work synchronized towards the target safety stock levels on identified products that the company wish to have more flexibility to meet customer needs.

Production planning like the chief in the kitchen, it’s a beauty of Art to decide what you cook with the available resources? When customer orders comes in with different tolerances on waiting time, how do you lead the team to prioritize each steps of the food processing works to maximize the customer satisfaction rates.