* CARRY ON EXPEDITING ?

Supply Planners everywhere spend a great deal of their time interrupting carefully crafted Master Production Schedules to expedite the supply of items for which a stock out is anticipated. This is sensible given that one of their most important objectives is to provide a high level of customer service - their job depends on it!

Why is so much expediting necessary? The answer is very simple: forecast inaccuracy. Even while achieving a 'world-class' level of forecast mix accuracy of 80%, some 80% of the individual item level forecasts will be >40% wrong, usually those of medium/low volume and, therefore, higher variability. And irrespective of safety stocks and time fences, the ERP/MRP system will provide exception reports that warn of potential stock-outs which Planners inevitably respond to.

What many Supply Planners, and maybe their Leaders, don't realise is that all the expediting is driving up inventory levels, lead-times and cost of goods. Again, the reason is quite simple: an unplanned schedule interruption uses unplanned change-over capacity (ie. cost) and increases the lead-time of the interrupted items. This causes them to arrive late thereby prompting further expediting and so a vicious cycle of capacity wasting/lead-time increasing expedites is set off to accompany that still being caused by forecast inaccuracy. Through Little's Law (Inventory = Throughput x Lead-time) the increases in lead-time cause higher inventory levels and subsequent increases in the lead-time and safety stock parameters (aimed at improving supply and service OTIF) have the same effect, as do the so called OEE improving batch size increases that often follow.

There is little Supply Planners can do about this problem - historical Leadership has allowed their supply chain to be designed in such a way that all their efforts to provide those important service levels are actually destroying Supply Chain, Operations and Corporate performance: both cash-flow and profitability.

What should highly motivated and conscientious SC & IT Leaders do to rectify these mistakes from the past and reduce their inventory by c40%, shorten lead-times and eliminate both use of unplanned capacity cost and expediting? They could read the following which comprehensively explains the root cause of the problem and how the counter measure can be trialled and implemented..........and you don't have to be brave, the correct way to drive replenishment can be quickly implemented through your ERP and its significant benefits start to appear almost immediately, in fact as soon as you start ordering the right quantities at the right time: Factory flow is non-linear so don't use Master Production Schedules | LinkedIn or Lean isn't Lean without E2E Pull

In the meantime, what should Supply Planners do?

CARRY ON EXPEDITING (until you get promoted).

* Non-British readers might like to know that the Carry On films (Nurse, Cruising, Camping, Cabby, Up the Khyber, Screaming, Cleo, Jack & 23 others) were a series of hugely popular UK comedy films made in the 1960s-70s, they had a very end-of-the-pier sense of humour: cheeky, saucy, slapstick. A few actors starred in many of the films and one of the best known was Sid James (pictured) whose character had a very distinct laugh and was typically wise-cracking and crafty - his first high profile part was in the classic Ealing comedy "The Lavender Hill Mob", and can also heard in many editions of Hancock's Half Hour.