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Dive deeper for the root cause, before making a trade-off in Supply Chain.
Supply Chain teams struggle with several trade-off decisions to manage their performance parameters. Should they improve service levels with higher system inventory or give fresher products to the market with higher stockouts? Should they keep surplus production capacity to service peak demand or manage it through inventory build-up? We can go on and on…
We often don’t realize that a trade-off is nothing but a compromise, as we are unable to maximize both the performance measures.
It need not be so. Whenever you face a trade-off, dive deeper to identify a common root cause which affects both the measures. Eliminating this root cause improves both the performance measures simultaneously.
Toyota realized it many decades ago and worked on eliminating the root causes, which led to innovations like Zero defects, JIT, Lean, Kaizen, TPM, SMED, etc.