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Supply chain Exceptions

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Exceptions in the supply chain often represent a disproportionally large opportunity cost. The opportunity cost for companies includes both missed revenues and lost market share. If a company's normal supply chain partners are unable to accommodate this spot and unplanned need, this will result in back-orders or lost sales.

The other expenses in the Supply chain is when a company has purchased too much material. Excess Stock typically sits as inventory until companies are ready to declare these, and a decision is made to scrap material.

Many companies focus resources on optimizing processes when things go as planned, but often do not have a well-defined process or tools to manage situations when things do not.