At the core, there are two fundamental problems that, almost without exception, lead to the undoing of supply chain optimization initiatives: first, a misguided thirst for control; second, bureaucracy taking precedence over reality.

The most common form of misguided thirst for control is the ambition to set up a Grand Plan with details of everything that is about to happen so that supply chain execution can be reduced to a simple matter of pure orchestration. Nonetheless, the grand plan is terminally flawed when it comes to the irreducible uncertainty of the future. Production decisions, inventory allocations, price moves established based on the Grand Plan consistently turn fragile whenever the market forces end up deviating from the plan, no matter how accurate the underlying forecasts may be.

The larger the company, the more tempting it is to “play it safe” rather than real. The political forces at play in a large company punish failure more strongly than they reward success. Unfortunately, by avoiding chances of failure, chances of success are eliminated as well. If the worst that can happen is very little, then at best, success will be inconsequential as well.