There is a rumor, as seems to be every year for Super Bowl week, that we are suffering from a shortage of chicken wings.
While it’s apparently true that the higher price of corn (due to greater use in production of ethanol for fuel and from the drought last summer) has made farming of chickens decrease, and the demand for chicken wings is always at its highest during Super Bowl week, the prices of chicken wings has increased significantly.
For the moment, let’s assume the rumor is true, that there genuinely is a shortage in chicken wing supply (relative to demand, which probably makes it more true).
If you’re a farmer or supplier of chicken wings, why would you ever let that happen?
As a supplier, you would be at a great advantage in knowing about your customer demand peak. What’s to stop you from letting that shortage rumor spread but producing more chicken wings to meet that demand at a markup?
Lean is more than simply “doing more with less” – it’s about being flexible enough to move with your customer demand and supplying the right quantity and right quality to meet your customers’ requirements. Spikes in chicken wing demand are no different – proper planning and supply execution would allow suppliers to reap a significant windfall from the demand surge.
I used to work for a company that had a six-month peak season and a six-month lull. One thing they did right was hire machine operators and assembly operators from a temporary staffing firm so they could flex to their seasonal demands. One thing they did wrong was build up inventory well in advance of customer purchase, necessitating the rental of additional storage facilities instead of proper demand planning, changeover optimization, proper batching methods (as necessary), and optimized machine maintenance.
By simply investing money in product they couldn’t move right away instead of proper planning and machine reliability, their flexibility disappeared. Customer demands changed, and either we had made too much of one assembly or not nearly enough of another. Machines broke down at the most inopportune times. Changeovers were lengthy and we had a lot of downtime.
Many industries don’t have the benefit of such significant knowledge of peak demand. When your industry has that benefit, be smart and take advantage of it.