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My Mom, the Supply Chain Whiz

I have a secret. Everything I know about managing a successful supply chain, I learned from my mother.

No, my mom didn't have a PhD in supply chain management or an MBA in operations. Her credentials were even more impressive than that. My mom was a high school graduate, domestic goddess, and the chief operating officer of a family of eight.

Despite the often-unpredictable demands of her four sons and two daughters, mom was somehow able to ensure that our household ran smoothly. Key supplies like socks and milk always seemed to be replenished just in time, and whenever a new item was added to the nightly bill of materials, a.k.a. the dinner menu, she was sure to include those we liked in the auto replenish cycle, while those we didn't care for were summarily vanquished from the Fay family supply chain.

It wasn't until I started my own family that I realized just how complicated her job was. As my wife and I struggled to keep up with the needs of our growing family, I gained an immense respect for the skills my mother demonstrated all those years ago.

One day, I asked my mom how she was able to keep it all together. She shared two essential elements of a well-run household, which, as it turns out, are also critical to a successful sense-and-respond supply chain: communication and collaboration.

For example, my mom started the demand planning process at the point of consumption. She would sense how things were going with our family supply chain by asking critical questions (“Do you still have clean socks?”) and would then collaborate with us to understand how to best support our needs. This same model can be applied to supply chains.

The sense-and-respond approach involves having information flow back through the supply chain ecosystem to you, as opposed to from you, which is how most command-and-control demand planning models operate. Unlike the command-and-control approach where forecasts often don't effectively reflect end demand, forcing companies to juggle their supply based on availability, sense-and-respond data is more accurate, timely, and pertinent.

This is where many demand planning tools fall short. While these tools are typically very good at providing the right exception-based data, the reliability of the data source and how companies then use that data is where problems arise. For the supply chain to sense change in demand and then respond quickly, much closer ties between supply chain ecosystem partners are necessary, as is shared responsibility for providing accurate data.

One of the best examples of the power of the sense-and-respond approach is the new vending machine from Coca-Cola called the “Freestyle.” This machine dispenses up to 150 different flavors of soda from one self-contained machine.

In a 2009 Business Week article, Gene Farrell, vice president of the jet innovation program at Coca-Cola North America, was quoted as follows: “The Freestyle fountains are connected to the Coca-Cola network, and are constantly reporting sales data — by brand, location, and day part. It's a tremendous new tool for understanding how customers consume our products.”

Not only does this equipment enable Coca-Cola to instantly satisfy just about any customer's need, it also provides the company with the means of gathering precise demand information by brand, location, and time of day. For example, Farrell noted that after the release of the Freestyle units, Coca-Cola discovered that Caffeine-Free Diet Coke sales spike after 3:00 p.m.

The Freestyle is a prime example of how gathering demand data closest to where the end item is consumed allows you to share better information across your supply chain and collaborate with your partners to make better decisions, and thereby maximize your revenue.

Looks like my mom was ahead of her time!

10 comments on “My Mom, the Supply Chain Whiz

  1. Ariella
    October 6, 2011

    Great post. Many moms still handle teh household supply chain on top of working outside the home, as well. 

  2. saranyatil
    October 6, 2011

    Mom's! I would say they are the best supply chain guru's. Everyday they are so organized and plan their activities in a well mannered fashion.

    As you said they have been managing stuffs from ages though we have all the tools we still are finding it difficult to maintain a good chain.

    Loads to learn from them. Hats off to all the mom's.

  3. Adeniji Kayode
    October 6, 2011

    Any body that can manage the house can to some extend manage the supply chain, small wonder a saying says charity begins at home.Home is the begining of everything we do outside.

  4. Anand
    October 7, 2011

    Looks like my mom was ahead of her time!

    @Gerry, thanks for the post. You are right mom was ahead of her time! We can learn so many things from her. Right from multiplexing tasks to management basics, right from money management to family management she has mastered all management aspects.

  5. FLYINGSCOT
    October 7, 2011

    There are 2 recipes in life that are priceless:

    1) what makes a mother

    2) Coca Cola soft drink

    Looking at http://www.coca-colafreestyle.com/ it is now clear that we could buy one of these machines and reverse engineer the secret Cola recipe at last.  As for the first recipe only the great one in the sky knows this.

  6. Adeniji Kayode
    October 7, 2011

    You are right, throught the reason of use, Mom has dicsovered many managerial skills that many are attending seminars today to acquire and put the to use in putting her home in order.

  7. jbond
    October 7, 2011

    It is amazing how things that go on at home and are often overlooked are really essential to a successful business. A lot of planning has to take place when managing a family, particularly if the “manager” works a job while managing a household also.

    Kudos to the household “managers” who have made things possible.

     

  8. JADEN
    October 9, 2011

    Everybody engage the supply chain strategies in the household, only that we don't take note of it and some do it more better than the other.

  9. Daniel
    October 10, 2011

    Gerry, for doing good things in a good way may not require formal education or any university degree. Most of us are learning such things from others, who are doing things in well manner. It’s more or less like an art and the way we are handling the things. Former Apple CEO Steve Job is once a college dropout student, but later he had done many things without his degree

  10. Mr. Roques
    October 12, 2011

    I love the freestyle concept. I'm always looking for ways to cut the middle man and get information straight from the source, in this case the thristy customer.

    It gives Coca Cola a ton of info that can be used for the supply chain but also for marketing purposes (put caffeine-free ads right about 3pm), etc.

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