Complex systems thrive on fast feedback loops. How fast should they be in supply chains?
Supply chains are complex systems with interdependencies and inherent process variability. Such systems require fast feedback loops for stability and control. How frequently should these feedback loops operate?
An important feedback loop operates in balancing supplies with demand. Since replenishment systems need demand outlook for the RLT horizon, we need a feedback mechanism to track actual demand and refresh the demand outlook. The more frequently we do it, the more stable the supply chain will be.
The unfortunate reality is that conventional S&OP process operates with a monthly or a weekly feedback which causes inventory mismatch.
Agile supply chains operate with a much faster daily feedback loop, which readjusts supplies to evolving demand patterns on a continuous basis.
Look at the feedback loops operating in your supply chain and make them more agile.