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Complacency is a big obstacle to Supply Chain improvements.
Most consumer companies seem to be fine with 5-10% stockouts, losing their precious sales to consumers. Some in the pharmaceutical industry have learnt to live with even 10-20% stockout of their key drugs, affecting not only their own sales but consumer health as well.
When the teams check with their peers and even the industry leader, they also struggle with the same level of stockouts. There is no one to benchmark with, it looks quite normal to them. Until… a competitor comes up with a vastly more effective supply chain planning and execution, with far lower stockouts. Such an agile competitor starts eating into the established companies’ market share.
What makes business leaders so complacent? Are they unaware of agile supply chain practices? Or are they dismissive that these don’t apply to their unique context?
Let me know what you think…