From the course: Implementing Supply Chain Management
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Manage competing goals
From the course: Implementing Supply Chain Management
Manage competing goals
- Supply chain managers have to make a lot of tough choices between competing goals. Let's look at two conflicts that occur in almost every supply chain and I'll explain the techniques we can use to resolve them. The first conflict is between sales and operations. Salespeople tend to be optimistic about how much customers will buy and they know it's harder to make a sale when you don't have product available. So the sales department will lobby to make sure there's plenty of inventory. Operations and logistics managers want to maximize capacity utilization while avoiding waste shutdowns and overtime. So production plans are constrained by time and capacity limitations and the operations department is often lobbying to shrink inventories in order to save money. In many companies, that means that the sales department and the operations department are actually working towards different business targets, and most of the…
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