Service levels require careful planning. If supply chains are to be resilient businesses have to be responsive to customer demand and agile to supply goods and services when required. To provide excellent service means meeting customer demand and that requires inventory management. Planning service levels to meet dynamic demand is key. Serving customers means businesses have to have inventory available. Holding inventory ties up working capital so the trick is to keep inventories low whilst still meeting demand. There is a trade-off between cost and availability and balance is necessary. It is a dilema betweem just-in-time or just-in-case. The latter is costly. but the former can also be costly if you lose customers. Contemporary supply chain systems are dynamic. We no longer design systems and processes for long time periods. Systems are dynamic and so must design of the systems be responsive to change. In this episode Tony Hines discusses some key aspects of planning service that gives value to customers and is profitable for the network.
This is why you should listen to the Chain Reaction Podcast – All About Supply Chain Advantage. Evidenced based opinion delivered directly to you about everything happening in supply chains affecting business. Stay informed about supply chains by listening to Chain Reaction – subscribe today.