Problem 01

“We fix the same supply problem every year.”

Recurring problems

Fixes that fail: a quick fix relieves the problem, but after a delay its side effect brings it back
What it looks like
The same shortage, expedite or write-off returns each season. Each time it is blamed on a supplier, a planner or bad luck.
What is going on
Recurring problems come from feedback and delays, not bad luck. Orders, stock, staffing and capacity react to each other late. Those late reactions recreate the problem.
What to do
Map the loops with the people who run them. Then test changes on a model before trying them on the network.
See it working
Supply Pulse shows how quality holds, shelf life, hiring and a distant supplier turn a demand peak into empty shelves and expired stock. Lag Lab splits an overshoot into its causes.
Problem 02

“Planning keeps calling it forecast error.”

Overshoot after a demand step

After a demand step production overshoots; of 215 units above demand, 140 are necessary refill, 59 come from decision rules and 16 from the forecast
What it looks like
Demand steps up and production, stock and hiring overshoot. The review blames the forecast and buys a better one.
What is going on
Overshoot after a demand step is the structure of planning, not the forecast. Part of it is stock and pipeline that must be refilled. Most of the rest comes from the decision rules.
What to do
Separate the necessary refill from what the rules add. Then change the rules, which is cheaper than a better forecast.
See it working
Lag Lab runs the same step three ways and splits the overshoot exactly. In its example, a perfect forecast removes only 7% of it.
Problem 03

“We don’t know which disruption would really hurt us.”

Unclear exposure

A disruption cuts off a concentrated low-cost supplier while a second source keeps the plant supplied
What it looks like
The risk register scores dozens of threats. Nobody can say which closure would stop shipments first, or for how long.
What is going on
Exposure is time-to-survive versus time-to-recover, not a risk-register score. A site is exposed when its stock and alternatives run out before the disruption ends.
What to do
Screen the main sites and routes on both times. Then price the responses that close the gap.
See it working
Global Disruption Atlas replays real disruptions on live chokepoint data and costs the responses. Network Stress Test finds which single site failure costs most, and what insuring against it costs.
Problem 04

“We’re committing capital on one forecast.”

Capital on a single forecast

Building full scale now leaves idle capacity; staged expansion adds capacity at demand triggers as uncertainty resolves
What it looks like
A new plant, warehouse or second source is approved on one demand forecast. Flexibility appears only as a note in the margin.
What is going on
Flexibility has a price you can calculate. The right to stage, defer, expand or lease has a value that can be set against committing now.
What to do
Value each option against the best fixed design. Then set the triggers for the decisions that can wait.
See it working
Real Options for Network Design compares committing now, the best fixed design, waiting, staged expansion and leasing on the same uncertain demand.
Problem 05

“Commercial, supply and network decisions move at different speeds and collide.”

Decisions at different speeds

Commercial decisions change weekly, supply monthly and network over years; out of step, they collide
What it looks like
Commercial promises change in months, the supply chain in a year, the network in years. Each function is right on its own, and the company still misfires.
What is going on
Clockspeed mismatch is a design problem, not a coordination problem. Decisions that take effect at different speeds have to be planned together.
What to do
Make the three speeds visible in one model. Then pace the fast decisions to what the slow ones can support.
See it working
Clockspeed Balancing lets a leadership team fly a company for 20 years and see what each mismatch costs.
Next step

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