Bullwhip on the Brain? Five Ideas to Improve Efficiency and Counteract Supply Chain Effects on Your Business

Joshua Zable 05 June, 2020

Topics: Predictive Analytics, Value Stream Maps, Minitab Statistical Software, Fishbone, Minitab Workspace, regression trees

Trucks in the supply chain

When facing a problem, you've most likely heard the saying "take the bull by the horns." It's often also easier said than done.

COVID-19's economic repercussions have forced businesses worldwide to deal with the phenomenon that occurs in multi-level supply chains where orders at the end of the supply chain, close to the customer, are amplified with each additional supply chain actor. This is called the bullwhip effect.

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You can't fully control the supply chain; however, there is something that can be done to help any business and counteract supply chain effects during this time: improve efficiency. Here are five simple ways to begin improving efficiency at your business:

1. Map the Current Process

Whether you prefer to use a simple flowchart, a cross-functional process map or a value stream map, visualizing the current state of your process is key and will inspire communication, help identify areas of improvement and build consensus across departments.

With over 90+ visual tools, Minitab Workspace makes it easy to bring your processes and improvement ideas to life and then effectively share and communicate them throughout your organization. Below is an example of a value stream map

Value Stream Map for ToysForPets.com

 

2. Understand Process Capability of Key Process Indicators

On-time delivery, machine up-time, downtime between lines, inventory accuracy and customer satisfaction are just a few of the common performance metrics in manufacturing. Knowing how well your performance metrics are meeting your goals is critical to figuring out how capable your process is, quantifying your key process indicators (KPIs) and discovering ways to increase efficiency.

Assess process capability expertly using the Process Capability Sixpack in Minitab Statistical Software. Our capability sixpack provides a comprehensive view of your process, specifically evaluating your KPIs, while checking critical assumptions. For further learning, download our free guide on How to Get the Perfect (Capability) Sixpack.Process Capability Sixpack Report for Satisfaction

3. Determine the Key Process Input Variables

Another way to get a holistic look at your process and find ways to increase efficiency? Cause-and-Effect Diagrams.

Also known as Ishikawa or Fishbone Diagrams, these tools can facilitate team brainstorming and help to visually organize all potential factors or variables in a process. When looking specifically at supply chain, you could include all input variables at each supply chain stage and then arrange them based on their influence on key process output variables.

Idea maps and CT trees are also effective brainstorming tools; all three tools can be found in new Minitab Workspace. 

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4. Quantify Process Relationships

Once you have all your input variables laid out, predictive modeling tools, like Linear Regression or Classification and Regression Trees (CART®) now in Minitab Statistical Software, can determine which critical input variables affect Key Process Output variables. These modeling techniques can quantify the effect of these critical input variables and really analyze those relationships, so you will know what ultimately matters and what doesn’t.

5. Monitor KPIs Over Time

If you'd rather try to stay ahead and have an idea when changes are occurring, you can leverage Control Charts.

Whether you use simple control charts, like the individuals chart, or advanced charts, like the EWMA (as shown below and discussed in our Bullwhip Effect eBook), both will help you monitor your process in Minitab Statistical Software and avoid the bullwhip in the future.

EWMA Chart of Number of Units Sold

Ready to Grab the Bull by the Horns?

Hopefully this has provided inspiration and ideas on how your business can improve its efficiency and face any supply chain issues that arise. If you'd like help with a specific problem or need guidance to get started, check out our Minitab Support page and contact us via phone or online.

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