Supply Chain - Show #86

Jon Kirkegaarde, Owner of DCRA Inc. has over 40 years in global supply chain management, consulting, and servicing. Through his experience, he breaks down the issues in supply chain – starting with how the term is used and ending with how it can be fixed.   

He explains that the real problem is sales/operations planning and when companies implement plans that are slightly better than the competitors, they have a competitive advantage. 

He likes to give a quiz – what’s the best model for supply chain: 

1. Selling for $10 with costs of $5 and holding inventory to immediately fill customer demand. 
2. Selling for $8 with costs of $6 and holding components to build to demand which allows for flexibility as demand changes with deliver times of 3-6 weeks. 
3. Selling for $7 with costs of $5 with no inventory holding costs so the consumer saves money but must wait 3-6 months for delivery. 

There are advantages to each option – and many companies take higher risks to fulfill customers’ orders right away.  And, as Jon says, “no one gets fired for having inventory, they get fired for not having inventory.” 

But that $5 margin sinks quickly with warehousing costs or having to dispose of goods no longer needed. 

Other companies minimized their risks to fill on demand, yet outsourced their full operations to the international manufactures and lost control of sales/operations planning and ran into trouble with the current shipping issues. 

He does have an answer that you can listen to on the full podcast episode. 

Links: 

http://www.dcrasolutions.com/ 

https://soptime.wordpress.com/2020/06/07/the-silver-lining-of-covid-19-a-call-for-u-s-manufacturing/ 

https://soptime.wordpress.com/2013/12/10/think-of-sop-as-your-supply-chain-golf-swing-golf-coach/ 

https://soptime.wordpress.com/2021/12/07/webinar-sop-diagnostic-launch-focus-with-throughput-ai/ 

 

Connect with Wendy - https://www.linkedin.com/in/wendypease/ 

Connect with Jon - https://www.linkedin.com/in/jonkirkegaard/ 

Music: Fiddle-De-Dee by Shane Ivers - https://www.silvermansound.com