Sanpo is an iaidō technique in which one must face several opponents at once. Its effectiveness depends on a comprehensive assessment of the situation and making several related cuts. Concentrating on only one opponent will not allow you to emerge successfully from such oppression.
Pandemic time is a time of not only demand turmoil, but also supply turmoil, forcing a comprehensive look at the supply chain. The collapse of supply chains has resulted in significant reductions in supplier service levels. The use of declarative lead times and the assumption of delivering 100% as ordered have proven to be misguided and inadequate to the realities of the “new” economy. Does the slow loosening of restrictions allow a return to the use of previous stock control rules ?
In my experience, few companies paid attention to tracking vendor Service Levels before the pandemic, or at least did not do so in a structured and dressed up process. The promise of a return to normalcy may give rise to the temptation to maintain this approach, even though it was not good at all. The consequence of making the tacit assumption of 100% Service Level of suppliers is usually to run the risk of an out-of-stock situation resulting from two problems:
– untimely deliveries
– incomplete deliveries
Knowing the current inventory position, as well as the demand forecast and its variability, we are able to calculate how many days of sales we have enough inventory for. Using a declarative lead time, we will send the order to the supplier at the latest possible date, cathartically allowing us to take delivery before falling into an out-of-stock situation. However, if our supplier is notoriously late, we may receive a delivery long after our stock reaches 0. The situation is similar for low supplier fill rates. If we keep up to date track the actual Service Level of suppliers, we are able to make decisions about the size of orders, as well as when to ship them, in a way that significantly reduces the risk of out-of-stock. Monitoring of supplier service levels can be realized, for example, by calculating the standard deviation for delivery delays and incompleteness over the past X months for each product. The calculated values should then be taken into account in the process of order management to suppliers, e.g. by including them in the calculated safety stock level or by postponing the date of order shipment.
An additional piece of information that is also worth considering when placing orders is our supplier’s work calendar. And in fact, the calendar of days on which he does not work. With this knowledge, we are able to accumulate inventory in advance for the sales coverage period when our supplier is not available.
He will learn more about how Smartstock optimizes inventory taking into account a supplier’s Service Level and supplier availability calendar. Order a demo.
Sanpo technique performed by our school’s iaidō teacher Takashi Kuroki to be viewed on the website: https://www.youtube.com/watch?v=XA0EV1UNSX8
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