Allocating an Hour a Day For Oneself is a Fantasy

There are those who recommend we set an hour a day to step back from our busy schedules.

I would really wish that could be true.  We all could use an hour a day to reflect on what we’ve achieved, organise our thoughts, develop ideas, and plan. 

Experience, however, shows it can’t happen for most of us. Many who commute to work already spend so much time going to and from their jobs.  If so-called time management experts suggest that the time while commuting is an opportunity for reflection, it is likely they haven’t undergone the daily hustle of riding public transport or the necessity of attention while driving through traffic.  

We wake to immediately get ready for our day and we sleep at the latest hour possible so we can maximise time with our families or to do that very last task we want to finish.

There is really not much we could allocate in terms of time to retreat and regroup. 

If we want to get a handle on things, a daily allocation of an hour for ourselves is not the answer.  It is right we should assess and plan our tasks but we need not a continuous full hour to do it.  Instead, we should dynamically assess and plan in short intervals throughout our day. 

We won’t need more than five (5) minutes when we wake up at the start of our day to see what we will do in the next one hour or so.  One to two hours later, we would have another five to maybe at most ten (10) minutes to see what comes next for our day.  We can arrive at our workplace at the start of our daily work shift and do a quick mental review of the one or two tasks we will do.  

We should only look at most three (3) tasks at a time.  Not more.  Else we overwhelm ourselves. 

We can do these 5- to-10-minute intervals of planning every two to three hours during the day. 

We should be ready for interruptions and disruptions.  Interruptions are those things that vie for our attention.  It’s the bosses asking (which is really telling) us to do another task they deem urgent.  It’s our spouses who call us and ask us to pass by the supermarket after work to buy a dozen eggs.  It’s the friends who text asking us to chat with them for a few minutes online. 

Interruptions may deserve an initial response:  No.  But it’s nice to include a reason.

No, boss, but I’m finishing the other tasks you assigned me the other day

No, dearest spouse, but you can make a full list of grocery items so that I can schedule going to the supermarket later in the week and buy all what we need in one go. 

No, friend, I’m not available for an online chat today, how about we text and meet next weekend? 

Unfortunately, many who interrupt us won’t take No for an answer.  When this happens, we may cede but we can still work our schedule to minimise the interruption. 

Okay, boss, I’ll get on your request right away.  But in reality, I’ll do it later. 

Yes, dear, I’ll pass by the supermarket after work.  But I’ll pass by the convenience store instead which is on the way and get in and out fast.   

Okay, pal, let’s talk now online if it’s really urgent.  But I’ll end the conversation after 15 minutes.

Disruptions are those things that force us to stop what we’re doing and demand our attention before we can resume what we were doing. 

We either challenge the source of a disruption or sidestep it.  In most cases it is wise to do the latter as disruptions can be just too difficult to overcome (e.g., natural disasters, traffic, angry boss). 

We end up not doing as we planned when we encounter disruption and the best way to get back on track is to re-evaluate and re-schedule what we couldn’t finish.  It would be best to take a short break to collect our thoughts and plan what we’re going to do for the rest of the day.  

Disruptions are products of adversities.  And because adversities are hard to anticipate, the disruptions they bring are practically unavoidable.  We get hit, we roll with the punches, we pick ourselves up, and we get back on track. 

We can never get the hour we want in a day because we will get our share of  interruptions and disruptions.  We can say No to interruptions or negotiate with the ones who are doing the interrupting.  Disruptions, however, are unavoidable and they wreck our schedules.  The bright side to any setback from interruptions or disruptions is we can always bounce back.

When we set our minds to what we want to do, we can get it done whatever life throws at us. 

“It’s not whether you get knocked down, it’s whether you get up.”

– Vince Lombardi

About Overtimers Anonymous

What Organising Really Means

There are four (4) basic functions to management:  planning, organising, directing, and controlling. 

We can picture what planning, directing, and controlling are.  They’re kind of straightforward and self-explanatory.  Organising, however, is not. 

When we “organise,” what’s the first thing that comes to mind?  We perhaps think of putting our stuff in order, like filing away papers and cleaning out the clutter.  Maybe we see organising as rearranging the tables of our subordinates, laying out the machinery, and scheduling who’ll work from home versus who’ll be at the office.  It can be that we think it is about making an organisational chart that shows the positions of people. 

Organising as a management function, however, is more than just all of the above. 

The dictionary defines organise as “cause to be structured or ordered or operating according to some principle or idea,” and “arrange by systematic planning and united effort.”  The key words are structure, order, and arrange and it is done for a principle or idea via systematic planning and united effort.

Organising is therefore not just making things neat.  It’s about making things ready for a specific purpose.  The “things” in this case are people, assets, resources, and products

Organising People

Managers organise people to do their jobs efficiently and effectively.  Organising is about employing and deploying the people crucial to making the enterprise’s goals into realities.  These include those we directly hire, i.e. employees, and those we engage with such as contractors and vendors. 

The tasks in organising people include team building, organisational development, training, defining job descriptions or scopes of work, and assignment of duties and responsibilities. 

Organising Assets

To get things done, managers need to have their assets in place and ready to be used.  These include having enough funds to pay for them and prepping them for operation. 

There have been many times I’ve seen managers order equipment and then realising they didn’t set aside enough money to pay the seller, causing delays in installation and start-ups.  

Organising assets includes tasks such as allocating cash in conjunction with budgets, setting up work stations, making and doing a checklist for preventive maintenance, calibrating gauges, running diagnostics, preparing storage space, and housekeeping.

Organising Resources

Resources are the materials, supplies, energy, water, and spare parts that we need to get things done.

Managers tend to underestimate the organisation of resources. 

Organising resources include preparing purchase orders, putting items in their proper place, checking that item codes are updated in the information system, informing security and receiving clerks what vendors are delivering the next day, clarifying policies such as first-in first-out retrieval, cycle counting of items to reconcile with inventory records, and regular quality inspections of critical components & parts. 

Organising Products

Similar to organising resources, we should make sure products are in their proper places, their codes complete in our computers, and delivery documents are arranged visibly for dispatch. Organising products also includes classifying each product’s inventory policy, marshalling finished goods for staging, categorising them by segment, group, family, and stock-keeping unit, and fixing the process descriptions and parameters of each. 

Organising products is no less important than organising people, assets, and resources.  In many cases, it should be the first to be done before the rest.

Organisation is not the same as organising.  The former is about structure; the latter is function.  Organising is work we may call mundane but necessary because the devil is in the details.  We can plan, direct, and control but if we don’t organise, that is, focus on things, make sure they’re in order, arranged, and ready for the strategies we will execute, then we’ll for sure run into trouble. 

Leaders rally people to a cause.  Managers organise people, assets, resources, and products to make real the goals of the cause.   

About Overtimers Anonymous

Owning versus Managing: What’s the Difference?

Do you own the business or do you manage the business?*

A senior member of the board of trustees of a high-rise building walked into its administration office and asked the accountant there to order parts for a diesel generator set.  The senior board member believed that the generator needed a minor repair and not only does he tell the accountant to buy parts, he also tells the building technicians to do the repair the coming weekend.  At no time does he talk to the building manager or the engineer both of whom were at the office. 

The building manager didn’t agree with the board member.  She made that clear in a previous board meeting where the senior member as well as the president and other board trustees were present.  The building manager felt that an outside contractor, with special expertise in generator sets, should diagnose and repair the building’s diesel generator.  It shouldn’t be entrusted to the building’s technicians who themselves said they were not qualified to do the job. 

The senior board member didn’t care for the building manager’s opinion and didn’t bother to talk to the engineer.  When asked why, the senior board member said the technicians agreed to do the job and the engineer didn’t seem to be interested. 

We can easily see that the board member was wrong for pushing ahead with a job that is the responsibility of the manager.  But this kind of thing happens a lot not just in buildings but in businesses.  Owners hire managers but take it upon themselves to micro-manage daily activities.  

Owners would insist on being part of every daily decision, from approving every petty cash disbursement to studying every project, big or small.  Managers end up paralysed; they won’t move until the owners tell them what to do. 

Thus, the question to enterprise owners: are you there to own the business or manage the business

Managing the business is about planning, organising, directing, and controlling the enterprise’s day-to-day activities and projects.  It’s about supervising people, procuring resources, budgeting & accounting, and compliance to rules & regulations.  Managers make sure goals are met and strategies executed. 

Owners set the standards and peg the objectives of the enterprise they have stakes in.  They monitor the performance of the enterprise in which management delivers and reports.  They listen to management’s recommendations on issues such as budgets, plans, projects, and strategies.  It is the owners who decide via their boards or executive committees whether plans push through or not and how much resources will be planned, procured, and given.   And of course, it is the owners who hire and fire the managers. 

Both managers and owners share the same common interest:  make the enterprise prosper.   Each just have different roles.  But because we are human in which we each have our own opinions, owners sometimes cross the line and interfere with management. 

There is nothing wrong when owners complain when they notice employees come in late for work or when they question why customers aren’t receiving their orders quickly.  There is nothing wrong when owners suggest ideas to managers whether it be for process improvement or for a new gadget. 

It becomes wrong when owners push managers on how to address a complaint or how to adopt whatever idea or suggestion is raised.  Managers are there to figure out how to do things.  Owners are there to see how managers perform. 

Managers represent the owners when they deal with clients, vendors, contractors, community, and government.  Managers therefore should make sure their decisions and policies are in line with the owners’ standards and objectives. 

Owners lead.  Managers execute.  Owners set the destinations; managers map the routes.  Owners approve the strategies; managers act on them. 

There should be no overlap.  No crossing over.  Owners should know their place as much as managers should too.  If owners want to manage, then they should assume the position but be ready for the consequences, one of which is organisational paralysis. 

*Thank you to Mr. Jovy Jader of Prosults for coining the question and inspiring this blog. 

About Overtimers Anonymous

Management is Not Leading, and It Isn’t Staffing Either

First thing I was taught as a management trainee at a large multinational corporation in 1985 was that there are four (4) basic functions to managing. 

These are:  Planning, Organising, Directing, Controlling.

In 2021, when I search for “management functions” on the Internet, the results mostly are:  Planning. Organising, Leading, Controlling, and Staffing.

Leading had replaced Directing.  There’s that additional 5th function called Staffing. 

I see leadership, management, and supervision as three circles, in which one is a subset of another:

Leading or leadership is not management but encompasses it and more.  Leadership is about influencing people towards a cause, philosophy, religion, or vision.  Management lies within leadership, not the other way around.  To call leadership a “function” of management degrades that special talent or gift of charisma and influence not many people have. 

Management is about getting and administering the resources that would bring reality to a leader’s cause.  Leadership is enrolling people while management is about enrolling resources and doing the details in enrolling people. 

And then there’s supervision.  Supervision is overseeing people, making sure they are following policies, rules, regulations, and directives laid down by managers and leaders.  It falls within the sphere of management but it isn’t management.

Staffing isn’t a function of management.  Management plans head counts for staffs, organises the resources for staffing, directs the staffing, and makes sure the staffing activities are under control.  But it isn’t a function by itself; it’s one of many activities covered by management. 

I wonder if the people who put in Leading and Staffing as management functions have done any actual management at all. 

About Overtimers Anonymous

Behold The PSI: A Basic Tool for Supply Chain Planning

The PSI or Production-Sales-Inventory is a basic spreadsheet template for supply chain planners. 

It looks like this:

The PSI has three sections:  production, sales, and inventories. 

Production represents the in-flow of an item or what’s going into inventory.  A basic example is finished goods input coming from a manufacturing operation’s output.  We can also call it supply. 

Sales is the out-flow of an item or what’s going out from inventory.  An example is a shipment to a customer.  We can also call it demand. 

Inventory is the stock of an item on-hand in storage, such as how much of an item is in a warehouse. 

The PSI makes visible production, shipments, and inventories over a range of time periods or what we can call time-buckets.  It’s an outlook for planning.  It’s up to the planner if he or she wants to use weeks, months, or even days for the time buckets.  It’s also up to the planner how many time buckets to plan for.  It doesn’t have to be just three as in the figure below.  It can be any number.  Some enterprises use six (6) buckets for a 6-month outlook; others go up to 12.  It is the planner and his superiors that decide what periods to cover (e.g., weeks, months) and how many. 

The PSI’s horizontal rows list the items or products.  Each row shows the production, shipments, and inventory outlook for each item via the quantities in the respective columns or time buckets. 

An item can be a product, material, or a supply or spare part. It is recommended to select an enterprise’s most important items to the PSI.  By very important, that would mean those that executives often keep an eye on. 

Working the PSI starts with a beginning inventory at the zero (ø) column of the inventory section. 

The planner’s basic aim is to track the inventories from one time-bucket to the next.  In the figure below, the planner notes that inventories at the end of week 1 becomes fewer as a result of sales in the same week. 

When the planner, however, inputs the production and sales of week 2, the inventories end with zero (ø) on week 2. 

To put what I just said in a formula:

and to put it to represent every time bucket:

where x is the time-bucket number.

The aim of the supply chain planner is to ensure there will always be available inventory for sales.  Hence, supply chain planners typically prefer there’d be extra stock at every time bucket.  

Supply chain planners typically set inventory targets for every time-bucket in line with their superiors’ policies and strategies.  Sales for each time-bucket usually are based on forecasts and customer orders. From the inventory targets, the planner computes the production or sales needed and still have enough left to meet inventory targets.

Planners focus on either how much to sell or how much to produce to meet inventory targets. 

If it’s production, planners would adapt the ending-inventory formula and make it look like this:

For a desired ending inventory of five (5) units of items A and B, the planner would set production numbers that would match sales but leave at least five units at every ensuing time-bucket. 

When the enterprise wants to plan how much of an item to sell given inventory targets and ongoing production, the supply chain planners would adopt the following formula: 

Which in the PSI would look like this:

…which looks just like the PSI for production.  😀

The PSI in the above diagrams show the same numbers but illustrates a different approach.  The planner either figures out how much to produce or calculates how much to sell for the ultimate purpose of having enough inventories at every time-bucket. 

An enterprise can tailor a PSI for its particular business. 

For an enterprise that buys finished goods and directly sells to customers, for instance, a planner can adapt a PSI from a production-sales-inventory template to one that is purchases-deliveries-inventory:

An enterprise that imports items and converts them to finished goods, a PSI may look like the one below. 

I found this especially useful in a metals manufacturer that was importing metal coils that then were then cut up and converted into steel sheets, plates, tubes and pipes.  As steel coils were the key components of the manufacturer with its weight in metric tons as the standard of measure, the PSI enabled the manufacturer’s managers to plan the quantities and timing of importing and converting expensive metals without having too much on floor for too long. 

When enterprises use a common measure from key materials to finished product, the supply chain planner could expand the PSI to a 4-column spreadsheet consisting of purchases-production-sales-inventories:

A 4-column PSI would be particularly effective for enterprises with few but predominantly high-volume products such as those in commodities.  And it opens up participation of practically the four (4) core disciplines of the supply chain:  purchasing, production, logistics, and planning. 

The PSI doesn’t require sophisticated software or hardware.  One can use an ordinary spreadsheet program (e.g. Excel) or even do it by hand with or without a calculator (or abacus). 

The PSI gives visibility to an enterprise’s supply and demand picture from present to future for key items, whether finished goods, materials, or parts. 

The PSI’s limit is that the more items an enterprise has, the more tedious it becomes to plan and track.  ERP systems coupled with up-and-coming artificial intelligence (AI) software can make up for that.  Many enterprises, however, rely on planners to plan the items they carry.   

Even with its simplicity and features, it’s hard to find an enterprise that actually uses a PSI.  Many planners tend to devise their own templates, using spreadsheets mainly, despite the availability of integrated planning tools provided by expensive software. 

Most of the planning spreadsheets I’ve seen are hard to understand or are very specialised.  When I present the PSI template to planners, however, I’ve gotten very positive feedback with executives welcoming its application. 

A PSI is a basic manifestation of what a supply chain planner does, which is to plan production or estimate the demand needed with a minimum amount of stock at every time period.  It is a basic tool for supply chain planners.  It’s simple to set up and provides a comprehensive canvas of what an enterprise’s supply and demand would look like in the present and future.  It has its limitations in the complexity of an enterprise’s items and operations. But at the very least, it provides a foundation for planners to manage inventories and optimise supply chain productivity. 

About Overtimers Anonymous

Why Shifting from the Month-End Surge to Delivery by Demand is Common Sense

“We just have to live with it,” the General Manager replied. 

The GM was responding to my comment that month-end surges in sales orders were causing inefficiencies in the company’s logistics operations. 

I was presenting an operations assessment report to a company that distributed name-brand computer printers and accessories.  One of the key observations from my report was that the majority of sales orders (more than 50% of monthly sales) came at the end of every month.  Staff from sales, accounting, to logistics rushed deliveries to fulfil the orders and meet revenue targets.  Sales personnel counted on the deliveries to achieve if not beat their quotas and benefit from incentives. Not attaining the targets and quotas was simply not acceptable.  

The company is an exclusive distributor for a large name-brand supplier of printers.  The supplier dictated the monthly sales targets.  The supplier expected the company to meet those targets from month to month, no questions asked.  Hence, the company’s General Manager said that month-end surges were something they could do nothing about.  It was something they had to live with. 

Many executives do not want to shift from the practice of month-end selling and delivery.  “It’s not for discussion,” a consumer goods wholesale executive once told me when I said the monthly surge in deliveries was causing her firm’s transportation expenses to rise.  The executive did not want to change a practice which has become so ingrained in the company’s culture.

Executives don’t dispute that month-end surges bring about inefficiencies and high costs throughout the supply chain.  Surges cause stock run-outs as inventories deplete quicker than suppliers or manufacturing lines can replenish.  The surges also drive up inventories of customers which result in increased product returns especially for products with limited shelf lives.    

Logistics expenses increase as month-end surges strain storage and transport capacities.  Some firms rent additional storage to stockpile products in anticipation of sales surges.  Transport providers tend to sub-contract additional trucks to ensure there are enough vehicles to meet the demand.  Both the additional storage and transport capacities result in higher delivered costs for products.    

Month-end surges are sometimes coupled with periodic sales promotions and price changes which fuel more spikes in orders and delivery volumes.  Surges thus cause a “bullwhip” effect in which the up-and-down delivery volumes and resulting peaks and valleys in inventories amplify speculations throughout the supply chain. 

Executives are reluctant to move away from month-end surges because they fear lower sales will result.  They are afraid shifting from month-end sales would cause a decrease in revenue which they can ill afford in organizations that especially measure performance by monthly targets.

Moving from month-end sales to just deliveries driven by demand is common-sense logical.  It’s just not accepted given the anxiety it would cause among executives. In a demand-driven supply chain, one delivers only what and when it is needed.  The fear is the demand and the subsequent sales might not be up to par with immediate targets.

A downturn in sales would indeed be expected as customers would exhaust overstocked inventories from any previous surge.  In succeeding months, demand would pick up and sales would average closer to what would have been with month-end surges.  But executives would have to have faith that that will happen and executives don’t like to count on faith. 

Stakeholders in many companies measure executives via short-term targets.  Stakeholders want to see continuous growth in their company’s finances especially if they expect dividends and bonuses every year.  Creditors, such as banks who provide loans, also want to see continuous short-term gains to assure themselves that they will be paid the interest and principal of what they lent. 

The month-end surge is a manifestation of short-term thinking.  Shifting from the month-end surge requires changing one’s mindset from short-term to long-term management.    

When delivering only what is needed and when it is needed, all functions of the organization have to work closely together.  Sales needs to forecast future demand from the grass-roots level or from the end-user, whether that be the customer or the customer’s customers.  Marketing would support sales where it sees demand is lacking or where there is potential.  The supply chain from logistics, manufacturing, and procurement would have to build in a capable system and structure to anticipate the demand.  Sales, Marketing, and the Supply Chain, most of all, would need to communicate and come out with a consensus of action every time they review actual and forecasted demand. 

Attaining higher sales is not a product of individual sales persons or a result of incentives for just one group.  It is the product of teamwork.  Any challenge in fulfilling demand and achieving targets can be met if the organization works as a team. 

And isn’t that what organizations are supposed to be doing in the first place?

About Overtimers Anonymous

Originally published in LinkedIn May 06, 2019

Logistics Solutions Can Be Simple

A medium sized retailer of health food items imports products from abroad.  The retailer prides itself with a very well organised warehouse and a crew of workers that swiftly repack the imported products and send them to the retailer’s stores all over the country. 

The retailer’s sales department, however, has constantly complained about lack of enough fast-moving products to stock store shelves.  They frequently request for more items which the retailer’s purchasing department promptly orders.  Yet, the sales people still complain.  Why are store shelves empty despite the inbound volume of imports?

A consulting team the retailer engaged found that the retailer’s warehouse was indeed quickly repacking and delivering needed fast-moving imported items to stores.  Once they arrive at the stores, the fast-moving products were sold within days. 

But the warehouse inventories showed almost no stock available of the fast-moving items at the beginning of every work week.  How can this be since imports via container vans were arriving every week?  The stocks have been arriving but the warehouse says they are not on inventory.  Where were the items? 

It turned out that when container vans of imports arrived, it would take as long as ten (10) days to completely unload, put away, and enter items into the warehouse inventory records.  Every container van would have a mix of as many as a hundred products totalling to as much as a thousand cases or packages.  Some items like paper products were bulky, some like food supplements were tiny.  The warehouse’s personnel would unload products from the container van into pallets, but it would take several days to sort the items, inspect them, and scan them into inventory.

Hence, even as the imported items had arrived, they were still “in-transit” on the retailer’s inventory system.  The warehouse didn’t repack and deliver products until they were entered into the system. 

To complicate things further, sales people would ask the warehouse to put priority in receiving items that were running low on stock at stores.  That resulted in warehouse staff in receiving some items from inbound container vans and putting others in a holding area, in which these latter items would sometimes sit there for as long as one (1) month before anyone sorts and scans them.  This resulted in a vicious cycle where products were alternating in out-of-stock as warehouse staff switched priorities in receiving one item to another. 

The solution to the problem was simple.  Management just had to re-enforce the retailer’s policy of unloading every container van completely before receiving another one.  Management also had to shorten the time to receive inbound imports.  More than a week was too long.  It turned out that the employees assigned to receive inbound container vans sometimes were pulled to do other jobs in the warehouse.  Management only had to put a stop to that and have the assigned employees work full-time in receiving the vans. 

The consulting team also suggested the management review the retailer’s purchasing and inventory policies.  It wasn’t that the purchasing department was buying enough; it was that they weren’t buying frequently enough. 

The purchasing management preferred to buy items in bulk to take advantage of pricing discounts.  They would order only once a month or even less so.  As inventories ran down, the next scheduled arrival of vans would sometimes be weeks away.  Planners and purchasers ended up rushing the dispatch of container vans which sometimes delayed the delivery of other items and again brought on a vicious merry-go-round of items running out of stock. 

Purchasing just needed to balance buying in bulk and scheduling shipments to arrive more frequently, such as weekly versus monthly.  Purchasers could negotiate contracts with vendors to commit to buy in bulk at competitive prices but ask that deliveries arrive in smaller quantities more frequently. 

Logistics is about ensuring a smooth supply of materials and products from one point of the supply chain to the next.  It’s about planning, buying, and transporting enough.  Not too much to cause pile-ups of stock that tie up space and cash.  And not too few that risk run-outs that interrupt production and compromise services.

Logistics is broad.  It covers what comes in, what comes out, where it goes, and where it leads to.  One may say it covers all the things that sales, marketing, and manufacturing do not. 

Logistics is not the supply chain.  It’s a big part of it but not the whole of it.  Logistics is the life-blood that courses through the supply chain but it isn’t the supply chain.  It works with counterparts such as planning, procurement, and production to make sure merchandise moves through suppliers and manufacturers to meet the demands of customers. 

Improving logistics is about improving the flow between points in the supply chain.  That means minimising bottlenecks and focusing resources to move things where they are slowest.  It means making sure stuff are put away and at least cost and risk of damage, at the same time making sure they don’t over-stay in one place.  Scrap and out-of-stock are what logistics practitioners avoid as much as they could.  For when there is scrap or out-of-stock, it’s a failing mark for logistics. 

As the case of the health food retailer illustrated, logistics solutions usually come back to basics.   Inbound receipts were moving too slow and caused stocks to run out at stores.  What was needed was re-enforcing policy and focusing on finishing every job of unloading the container van and putting away the items.  With items flowing with fewer delays, the warehouse would be able to repack and deliver to stores the items they sorely needed week to week. 

Logistics can look complicated but the solutions can often be simple. 

About Overtimers Anonymous

DRP, Deployment and the Role of the Supply Chain Engineer

Distribution Resource Planning (DRP) was my first assignment as supply chain planner for a large consumer goods firm.              

It was the late 1980’s and Manufacturing Resource Planning (MRP 2) was at the height of popularity in the corporate world.  The company I was working for was embarking on integrating MRP 2 in an information technology upgrade of its operations and DRP was one module offered. 

DRP is a planning tool in which one schedules the deployment of items, usually finished products, to distribution centres or depots at different geographical locations.  It manifests itself in matrices such as the following for a depot and a central storage facility:

The matrices serve as templates in which the planner can see how much a depot needs at a point in time in the future.  In the following example, it’s week three (3) in the future:

To anticipate the out-of-stock on Week 3, the planner simply schedules the shipment of product to the depot.  Assuming a lot size of 800 and a two-week transit time, the planner schedules a shipment from the central facility at Week 1:

It’s simple enough for one item and for one depot.  The work adds up when it includes several depots:

For multiple items and multiple depots, the work adds up even more:

As much as the planning is simple per item per depot, the work becomes more cumbersome and complicated with multiple depots and multiple items.  Hence, DRP works best with the help of MRP 2 software that would automatically compute the schedules for all items for all depots. 

It’s no wonder then that organizations look forward to artificial intelligence (AI) in planning the deployment of products.  It’s just a lot of simple work that a machine can do instead. 

If only it was that easy. 

DRP deployments don’t take into account uncertainty and sudden disruptions.  It assumes things will go as planned when in reality, they do not.  Such as when a planned arrival is delayed: 

Customer orders as a result are not served.  And the disruption may even cause customers to speculate: 

In such scenarios, automated planning is no longer useful.  Human intervention is needed as the central facility would either rush stocks to the depot or the sales force served by the depot negotiate with customers to smoothen demand. 

When it comes to uncertainties, planners tend to build up inventories to avoid situations like in the aforementioned example.  It defeats what DRP is trying to do which is to keep inventories manageable and at the same time serve customers only when they would be needing their items. 

Information technology (IT) software does not provide a fool-proof automated solution for planning inventories and deployment.  Yet, many managers make the mistake expecting that computer programs will do so.  DRP is no exception.

Deployment is a critical step in the supply chain, especially for enterprises that have markets in far-off places.  It isn’t something that can easily be automated.  It requires a framework founded on an overall strategy. 

An overall strategy answers how the enterprise shall distribute its products: 

  • Do we set up depots or distribution centers at different geographical regions?
  • Do we deliver directly to markets from a single central distribution facility?
  • Do we build manufacturing and distribution facilities at different locations?
  • Do we just rely on a 3rd party logistics (3PL) provider to do all the sales and distribution of products? 

The distribution strategy will need to align with how the enterprise wants to sell and deliver its products. 

  • Will selling be via retail channels?
  • Do we negotiate contracts with distributors, wholesalers, and/or licensed dealers to sell at different markets?
  • Does the enterprise utilize e-commerce for customers to order and couriers to deliver? 

The framework for deployment consists of both policy and structure derived from a distribution strategy.   

Policy would cover such areas as:

  • Inventory: how much to keep, when to replenish, how items are handled (e.g. first-in first-out);
  • Service:  how items are dispatched (e.g. minimum quantities, lot sizes, less-than-truckload [LTL] limits);
  • Quality:  how merchandise is inspected, how damages are prevented;
  • Risk: how products are secured and accounted for. 

Structure would involve the assets and people directly involved with deployment.  These would consist of:

  • Facilities such as depots, warehouses, storage equipment (e.g. racks, tanks, vessels), & materials handling (e.g. forklifts, conveyors);
  • Transportation assets from trucks, vans, to shipping containers and air-freight;
  • Organizational structure and management set-up.    

The effectiveness of a deployment framework depends on how well the enterprise develops its policies and structures.  This is where supply chain engineers (SCE’s) can help. 

SCE’s can assist executives in studying various scenarios for an enterprise’s deployment framework.  These range from assessing the capacities and financial effects of product flows via different network options to determining optimal inventory levels taking into account the risks of stock-outs and overstocks. 

SCE’s can also fine-tune options on how an enterprise can deploy its products efficiently and effectively.  For example, SCE’s can help executives decide whether cross-docks would be a better option to rapidly move products from centralized locations to customers. 

DRP is a good tool for supply chain planners.  But like all good tools, it is most effective when it fits in with a framework founded on a well-developed distribution strategy. 

Supply chain engineers have the expertise to help enterprises optimally spread their inventories to the markets they want to sell to, with the tools and software they are familiar with and can muster. 

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