SUPPLY CHAIN STRATEGY

E d w a r d H . F r a z e l l e , P h . D . RightChain™ complexity and therefore not removing complexity as much as his. Pruning for Profit In my experience the most fruitful first step to take in developing a supply chain strategy is to remove non-value added SKUs, customers, orders, carriers, and suppliers; SKUs, customers, orders, carriers, and suppliers that are more trouble than they are worth . With those removed, the same or less supply chain resource is much more profitably allocated to the remaining SKUs, customers, and orders. Forecasting becomes more accurate because the same forecasting resources are focused on fewer, more forecastable SKUs. Fill rate and market share increase as a result. The forecast accuracy for a SKU you don’t have is perfect. The leadtime for a SKU you don’t have is 0. The inventory investment in a SKU you don’t have is $0. The cube occupied by an SKU you don’t have is 0. The length of the pick line for a SKU you don’t have is 0. The planning time required for a SKU you don’t have is 0. According to Webster, pruning means “to reduce especially by eliminating superfluous matter, to remove as superfluous, to cut off or cut back parts of for better shape | 31

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