SUPPLY CHAIN STRATEGY

22 | R i g h t C h a i n ™ At the request of a client, we developed the Wrong Chain Model of Supply Chain Sub-Optimization, Dysfunction, and Conflict (Figure 5) to help them understand the sub- optimization and internal conflict they had created in their supply chain. It also happens to be the reason why there is sub-optimization, dysfunction, frustration and internal conflict in nearly every supply chain. Think about a typical supply chain including sales, manufacturing, sourcing, transportation, and warehousing.

Figure 5. The Wrong Chain Model of Supply Chain Sub-Optimization, Dysfunction and Conflict First stop... sales. Let's assume that the sales force creates the forecast and works on commission. What's the worst thing that could happen to a commission sales person? Running out of product. So, guess what kind of forecast they will most likely turn in? You guessed it... an inflated