The Rule of 80/20 is not SustainableSeptember 14, 2020
Art’s Law #3 1% = 50%
The 80/20 Rule is not sustainable for problem resolution. We need to think about 80/15/4/1. Where the last 1% of demand typically represents 50% of business complexity.
The last 1% of demand or purchases create 50% of the customers, suppliers, or product numbers.
Look at eliminating the last 1% by;
- Eliminating and stop offering these part numbers.
- If must keep the products, use 3D or additive manufacturing to supply them.
- Use 3PLs is to manage low volume and cost purchases.
Envision how much complexity can be eliminated without the last 1%!
“Stop letting the process manage you! Become the champion of your game plan and achieve sustainable profits.”
Categorized in: Supply Chain Entropy Busters®, The Inventory Doctor®