Are you one of those people that never RSVPs? Even when it can be as easy as the click of a button these days? Have you ever thought about the potential consequences of not sending in a reply, particularly if you do show up? A recent article in the Wall Street Journal entitled : “Nobody RSVPs Anymore” illustrated some very dramatic examples of the problems bad manners can yield. For me this article was very timely because it came out two days before I hosted a holiday open house where less than 50% of the people responded. My husband thought I was crazy when I insisted that we have enough food and drink for twice the number of respondents BUT I was right and he was wrong (not the first time 😀 ). Sure enough almost all the invitees showed up even though most of them did not respond.
Now, you may be wondering what this has to do with Supply Chain – EVERYTHING. Demand planning is a critical element in a Supply Chain and knowing how many people will need to be “supplied” with food and drink is critical information for the supplier (me). Inaccurate information or none at all can result in way too much inventory (perishable food in this case) or not enough inventory (my WORST nightmare). In my scenario, I had a risk mitigation plan in place (bought more food) because I felt having too much food was less costly to me than running out (resulting in dissatisfied guests – especially those that were kind enough to reply). In the case of a hosted, home party, it does not cost the invitee anything whether they RSVP or not (other than perhaps being taken off the list for future events). But, when you think about a buyer / supplier relationship the risk associated with No RSVP (demand planning) will be transferred to the buyer through a higher price. Those are real consequences and can add up to real dollars.
In general, many organizations do a poor job in demand planning or if they do it, it is not always shared with the supplier. Why not? If, as a supply chain organization we can make it easier for the supplier to serve us, why don’t we do it? In the article noted above, many people do not RSVP because they want to maintain maximum flexibility. In other words they want to be able to “decide that morning if they want to go out that night” – as a hostess that is maddening. As a supplier, those buying organizations that provide the courtesy of a reply (demand forecasts) will reap the benefits. I am also a supplier (beyond hosting parties) and my consulting clients that can provide me with predictable demand can expect my best resources and best pricing. The greater the commitment, the stronger the relationship, which has even greater benefits.
If you believe that not providing your suppliers with demand forecasts when you can is a good strategy think again; particularly if you are buying goods or services that are critical to your business. If you have ever played the Beer Game you will remember that the most valuable asset up and down the supply chain is information. Keep in mind that your suppliers may also have suppliers that they rely upon to provide you goods and services – your demand information will be critical for them as well.
The next time you receive an invitation, think about the “supply chain” implications and just RSVP. The same goes for your supplier relationships, the favor of a reply can pay huge dividends in more ways than one.
Join in the conversation and let us know what you think . . . . . . .