Let's look at the impact of error on the supply chain. I'm going to organize my thoughts around two key points --


1. An organization must be relentless in its rigor for removing error from the transaction systems, especially the order-to-cash workstream.


2. The organization must be prepared for early error detection since, regardless of rigor, errors will occur. Attention to remedial actions that are quick and efficient will pay big rewards in reduced stockouts, lead time, and inventory.


Let's address the second point first. I believe this point can be illustrated by describing my first adventure with a chainsaw. Being raised in the Texas Panhandle where a large tree was a six-foot mesquite, I knew nothing of chainsaws until I purchased my first one at age 60. After careful reading of the manual and tree pruning instruction book I was "ready" to saw and prune trees. The manuals overlooked what is evidently the major transaction in chainsawing --- replacing the thrown chain on the bar! I began the "ground-hog day" saga that well-versed chainsawers know well --- replacing the chain on the bar frequently. After several trips to fetch the wrench and lengthy searches for dropped parts in the woods, I analyzed this error and redesigned my remediation process. The solution consists of replacing the nuts with wing nuts so that I can take them off and replace by hand, and dedicating a one dollar rain poncho to be my dropcloth for the in-the-woods repair. No doubt it's a function of my low level of skill, but the chain seems to leap off the bar at the slightest provocation.


This is an example of my personal transaction system. The transactions consisted of removing limbs from trees. ( I learned that 10 minutes of sawing = four hours of pickup.) The better transaction system that reduces errors consist of my becoming more experienced at chainsaw and paying particular attention not to hit another limb while sawing one off -- -- -- since this seems to be a major source of chain leaping. The improvement has been slight, however emphasizing the advantage of my upgraded error remediation system. It has been a major timesaver, and illustrates the point I'm making about errors in the transactions. Eliminating them is good, but some will still exist no matter how diligently we remove them. A well-designed error remediation process (frequently called an exception handling process) is essential. The impact on the planning for the supply-chain has to do with reducing the uncertainty. It is well known that uncertainty is the primary inflator of the lead time and inventory in planning calcuations.


More on the importance and methods for early error detection and remediation later.