Monday, 29 November 2010

Supply chain benefits

Over the last few years, O.R. professionals have given a great deal of attention to supply chains and their behaviour. O.R. people have improved JIT systems, developed algorithms for distribution of goods, and much else. In Saturday's Indepenedent newspaper (27/Nov/2010, page 55) there was an amusing story of the consequences of improving supply chains.

The story reads: "The John Lewis quest for worldwide domination continues with another new initiative designed to ensure shoppers never leave their department stores. Retail Week reports that supply chain improvements have reduced the amount of space John Lewis needs for stockrooms these days, so it plans to turn some of them into beauty spas and hairdressers. It's even promising to install theatrical stages in some of its cafes so you can be entertained while taking a break from spending your money."

Retail Week had the original story in its issue dated 26th November.

The lesson for O.R. models of supply chains is that they need to consider what happens to storeroom space when the needs for buffer stock is reduced. These aspects of the system may not appear automatically in the supply chain model ... but evidently they should!

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