Phugoid Oscillations and Congested Ports

When I was studying for my Private Pilot certification, I learned about phugoid oscillations. Most airplanes that are disturbed from level flight will go through a series of diminishing oscillations until they reach level flight again (if no controls are moved and the trim isn’t changed). 

An aircraft that will eventually stabilize itself from minor deviations has aerodynamic stability.  Most aircraft are built to be aerodynamically stable.  If the pilot stays hands off, the plane will right itself from minor deviations.

Figure 1 – Phugoid Oscillations

Supply Chain Oscillations

We may be seeing something akin to phugoid oscillations in the congestion at ports.  Port congestion is peaking again in California and is also building on the east coast.[1]  California port congestion last peaked in the first quarter.  The congestion was eventually capped by vessel supply.  As those vessels were delayed in their normal rounds, other temporary vessels have been added.  Now there is another round of congestion building.

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Planning with Uncertainty

“Guests, like fish, begin to smell after three days” is an adage attributed to Benjamin Franklin.  Today we might adapt that old adage to say something about demand disruption.  We are still dealing with so much demand uncertainty even several months into the pandemic, and that stinks like old fish! And there is no end in sight.

No matter what industry you are in, demand uncertainty has moved in and isn’t moving out any time soon. Many industries are seeing lower demand and huge uncertainty, including anything to do with away from home eating and entertainment.  For example, the continued daily uncertainty about restaurants being opened or closed complicates planning for foodservice suppliers, suppliers of suppliers, and growers. 

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How Much is Enough -Without Being Too Much?

How much should I make when demand is uncertain? How much should I order?  How much is too much when inventory has a shelf life after which it is no longer usable or sellable? 

These are uncertain times.  For many industries, past sales are no longer valid in predicting future demand. At least not until the economy gets back to a new normal after the pandemic.  Demand is way down, or even completely gone in some industries (such as foodservice and travel).  Demand is way up or at record levels in other industries (such as PPE and cleaning products).

This is the first in a series of blogs on the topic of lot sizing to determine optimal batch quantity for production or ordering in uncertain times.  I’ll explore some of the historical methodologies and some of the newer philosophies.  My focus is on adapting these methodologies and philosophies for products with finite shelf life when demand is uncertain.

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