Is your business a victim of internal self-inflicted supply chain crime?
Like a burglar sneaking round the back, are you being robbed by some of your resources while you are dealing with others?
Let me explain. If you have capacity constraints, you are absolutely right to focus on them. Maybe you are short of a particular skill or resource (like drivers, for example); maybe you have a bottleneck in the factory; or maybe the loading bays are causing the hold-ups.
Whatever your particular problems may be, you need to plan, schedule, and manage constraints carefully to make the most of their limited capacity.
However, while you are busy with your bottlenecks, do you know what your other (non-bottleneck) resources are up to?
If they are located ahead of the constraints and if they have more capacity than them, then they are probably stealing money (profit) from you! Typically, 'non-bottlenecks' tend to use their spare capacity to keep running and, in so doing, suck in more material and stock into your business, than your bottlenecks can get out.
Trust me, I see it everyday: left to their own devices, 'non-bottlenecks' will look as busy as your real constraints. The situation is made even worse by the use of inappropriate key performance indicators.
If you push for productivity and utilisation on all your resources, your own people will not allow your 'non-bottlenecks' to slow down or stand idle. They will just keep going, building up stock that you will probably end up throwing away because it will have gone out of date or become obsolete before reaching the end of the supply chain.
By the way, I am not just talking about perishable material ... think about packaging as well. Just add up the numbers of what you throw away.
Hugh Williams is founder of supply chain planning specialist Hughenden