Always plan to maximize efficiency

Many supply chain professional analyses their processes to discover ways to get the most out of their process delivery systems during peak demand periods. In effect, such analyses enable the service company to increase its peak capacity for a little additional cost.

For example, during rush periods team members perform only the tasks that are essential to delivering the service. If possible, managers use slack periods for doing supporting tasks, which in essence they are inventorying for peak periods.

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To maximize efficiency, managers examine even peak-time tasks to discover if certain skills are lacking or are inefficiently used. If these skills can be made more productive, the effective capacity of the system can be increased.

For example, the holiday season has the potential to bring joy to revelers the world over, but it can also strike fear into the heart of an unprepared supply chain manager. With maximising efficiency trades-offs with maximised revenue potential of a peak season and meet customer expectations, there are multiple factors that the manager must consider—from consumer demands to channel alignment to supply chain execution preparedness and beyond.

For instance, can the current warehouse physically handle an increase in inventory to fulfill the forecasted uptick in orders? Or are changes required to individual business processes, such as picking or packing, to accommodate a significant increase in volume?

Another way to attack the peak capacity constraint is by ‘cross-training’. The service level delivery system is composed of various components. When the system is delivering one service at full capacity, some sections of the system are likely to be underused. If the team members in these sections are able to deliver the peak service, they add capacity at the bottleneck. When the demand shifts and creates a bottleneck in other components of the system, the team member can shift back again.

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