Do you know the Greek legend of Sysiphus? He was given the task of rolling a boulder up the mountain. The boulder kept slipping away from him at the end of his path, so he had to start all over again.
Do you know the typical day-to-day business of logistics? It has the task of delivering the right goods in the right quantity at the right time, while making good use of production capacities and keeping throughput times and inventories to a minimum
The logistics are just as unsuccessful as Sysiphus managed to successfully roll his boulder up the mountain.
The reasons for this lie, on the one hand, in conflicting objectives, between which one would have to position oneself clearly; I have already written about this here on another occasion. Other major causes lie in the numerous disruptive factors that practically every value chain has to contend with: Unreliable delivery quantities and delivery dates from suppliers, unexpected rejects due to quality problems, unavailability of systems, machines, tools or operating resources; sick employees, unexpected market requirements, etc.
In the ERP system, we have planned our value chain neatly, the dates of the individual production orders and purchase orders match up neatly, all is right with the world. And then the chaos of the unreliability of all the resources involved in the value stream breaks loose. Before we know it, we end up in the world of emergency strategies, compromises and coordination meetings and are delighted that the goods are still finished at some point, even if many of the specified targets are not met.
Does logistics always have to degenerate into Sysiphus’ working methods? The gods had a hand in Sysiphus, but in our value chains we have the power to counteract the disruptions!
As with any control task, we must either eliminate or compensate for a disturbance variable. Otherwise, we have to live with the disruption and accept that we will not be able to achieve our targets.
I can either eliminate the disruptive factor of an unreliable supplier by making him more reliable, which may also involve changing suppliers, or I can compensate for his unreliability with safety stocks. The same applies to all other disturbance variables in the value chain.
In practice, we are often neither prepared to solve the problem nor to build up the safety stocks; instead, we participate in Sysiphus’ permanent occupation.
How about systematic “safety stock management” to get out of this vicious circle?
We statistically record all uncertainties in the value chain and use them to determine the (theoretically) required safety stocks to compensate for the problem. I would not recommend that you actually build up the identified safety stocks; they may have to continue their careers outside your company. Instead, by determining the safety stocks, we gain an economic measure of the cost of uncertainties in the process chain.
In the following, we take a systematic approach to the problems, starting with the most expensive disturbance variables. However, if we are unable or unwilling to eliminate a disruptive factor, we must be prepared to build up the necessary safety stocks. If we don’t do this, we will continue to live with logistical improvisations and keep rolling the same logistical stones uphill towards our goal, only to see them roll down again. Practical, but not really professional, right?
