The 3-R Supply Chain Problems

OPI

Macro Problem

Operational decision making is critical to business continuity, especially when
operations experience planned or unplanned disruptions. The quality of the decisions made in response to disruptions, has a direct impact on the business’s bottom-line and customer service levels. Optimizing the effectiveness and efficiency of business operational decision making can reduce cost leakages, increase customer service levels and enable a resilient supply chain.

Operational decision-making quality can be compromised when responding to disruptions causing inefficiencies in cost and time. This is partly due to challenges in accessing relevant information from different sources. The challenges are categorized as follows:

  1. Responsiveness – delayed access to information due to time taken in preparing reports.
  2. Relevance – difficulties in deciphering relevant and irrelevant information from reports.
  3. Reliability – data inaccuracies caused by human error and data source malfunctions.

The pain points of the existing decision-making process:
1.Limited stock tracking capability – Inability to track loss of stock to shrinkage.
2. Lack of on-demand inventory and demand balances – Inducing higher risk of shortages and overstocking related costs.
3. Fragmented information sources – Multiple reports are compiled by different role players increasing the risk of human errors and causing difficulties in extracting relevant insights.
4. Decreased employee productivity – Valuable human capital being consumed by tasks (compiling and circulating reports) that could be systematically completed.
5. Limited trend and pattern detection – Inability to profit from utilizing operational insight in mitigating disruptions and / or capitalizing on opportunities limiting business agility.

Document Author: Bernard Serote, Lesley Mbele and Brian Maja

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