2.3 Shortage Management (The “Chase” Process)

A shortage is a failure of the planning system. It is an operational emergency that directly threatens revenue recognition and factory utilization. Treating a shortage as a casual administrative task ("I emailed the vendor, waiting for reply") is unacceptable. Shortage management requires a "War Room" mentality: aggressive, daily, structured intervention until the clear-to-build (CTB) signal is restored.

The Shortage Protocol: Incident Definition

A shortage exists when the Committed Supply < Firm Demand within the frozen production window. It is not a topic for chat messages; it is a managed incident record.

The Daily Rhythm (Stand-up)

Shortage review occurs daily at a fixed time (e.g., 09:00). It is not a status meeting; it is a resolution meeting.

• Duration: Max 15 minutes.
• Focus: Exception management only.
• Mandatory Data: For every red line, the owner must state:
  1. The Constraint: (Part # & Qty).
  2. The Impact: (Line Stop Date).
  3. The Next Action: (Specific task, e.g., "Call Distributor VP").
  4. The Deadline: (When is the answer due?).

Mitigation Options (The Playbook)

Do not passively wait for the original PO to arrive. Execute parallel recovery paths immediately.

If Standard Channel Fails:

1. Spot Buy / Broker: Engage independent distributors immediately (refer to Chapter 1.7 for testing protocols).
   • Cost: Pay the premium. The cost of a line-down event usually exceeds the variance price of 5,000 resistors.
2. Alternate Sourcing:
   • Action: Trigger Engineering for "Drop-in Replacement" review.
   • Logic: Check for generic equivalents (e.g., standard logic gates, passives) where Mfr A ≈ Mfr B.
3. Logistics Acceleration:
   • Action: Upgrade to NFO (Next Flight Out) or Hand-Carry courier.
   • Constraint: If vendor is late, vendor pays. If demand spiked, we pay.
4. Production Re-sequencing:
   • Action: Split the build. Produce 50% now with available stock to keep the line moving; balance later.
   • Risk: Increases setup costs and tracking complexity.

Escalation Ladder

Escalation is not "tattling"; it is leverage. Use higher organizational tiers to unlock inventory that a Buyer cannot access.

The War Room Board (Tracker)

Manage the "Chase" via a centralized, visible dashboard (Kanban or Excel). Do not hide shortages in email inboxes.

Pro-Tip: Create a "Watch List" for items that are technically covered but have zero buffer. One quality failure on the dock makes these a shortage. Track them before they turn red.

The Root Cause Tag (Closing the Loop)

Solving the shortage is only half the job. You must fix the system flaw that allowed the shortage to occur.

The Rule: A shortage ticket cannot be closed until a Root Cause Tag is assigned and a parameter fix is implemented.

Common Tags & Fixes:

• Tag: Vendor OTD Failure → Fix: Update Vendor Scorecard; Increase Safety Stock.
• Tag: Data Rot (Bad LT) → Fix: Update ERP Lead Time from 12w to 20w.
• Tag: Demand Spike → Fix: Review Forecast Algorithm; Negotiate buffer liability with Customer.
• Tag: Quality Reject → Fix: Issue SCAR (Supplier Corrective Action); Quarantine vendor.

Final Checklist