A Symphony of Placid Beauty

Game6-FinalPosition

July 23, 1972. Reykjavík, Iceland. An event would occur that day that would rock the chess world and would continue to be talked about, even to this day. It was game 6 of the acclaimed world chess championship match between the World Champion, Boris Spassky of Russia, and the challenger, Bobby Fischer of the United States.

Fischer opened 1. C4, the English Opening – the first time in his entire career that he’d deviated from his beloved 1. E4 opening move. Spassky quickly transformed the opening into the Queen’s Gambit Declined, for which he was one of the world’s foremost experts in this line of defense.

What followed was a masterpiece. Fischer’s moves were new, exciting and novel on a variation that had been played by chess grandmasters for centuries. The moves were pure, clean and deceptively simple, yet powerful and profound.

When Spassky resigned after Fischer’s 41st move, not only did the crowd stand and applaud, so too did Spassky. They all knew that they’d witnessed a masterpiece. A game of such beauty and purity – still talked about to this day, as chess perfection.

Dr Anthony Saidy, a Fischer confidant and assistant described it magically when he proclaimed, “it was like a symphony of placid beauty”.

Fischer’s play in game 6 captures his signature style: crystalline – transparent but ingenious and incredibly profound and powerful. Nigel Short, the highest ranked British Grandmaster of all time sums up Fischer’s play nicely, “The thing that strikes me about Fischer’s chess,” he says, “is that it’s very clear. There are no mysterious rook moves or obscure manoeuvrings. There’s a great deal of logic to the chess. When you look at it you can understand it – afterwards. He just makes chess look very easy.”

There are a lot of parallels to Fischer’s chess, particularly game 6 from 1972, and Flowcasting.

Flowcasting, as you know, seamlessly connects the supply chain from the consumer to the factory in a natural and logical way. That’s easy to understand and most people seem to get that.

However, like analyzing Fischer’s moves, the nuances of the process are deceptively powerful and profound. I’ll outline a couple of important ones, though there are others and they follow the Fischer-like mantra – deceptively easy to understand, simple, yet profound.

The forecasting approach used by the leading Flowcasting solutions does not use any sophisticated algorithms. Instead it uses and builds on profile based forecasting techniques that have been around for decades – the subtle improvement (like some of Fischer’s novelties in game 6) is the use of differing forecast time periods by SKU, converting them to integer forecasts for slow selling items and then consuming these forecasts as actual sales happen.

Why is that placid-like beauty? Because if you study retail, and real sales history, you’ll uncover that the vast majority of products sell less than 26 units per year per store for virtually any retailer. Trying to find a fancy algorithm that can predict when these sales will occur is a fool’s game.

The simple combination of integer forecasting, consumption and daily re-planning simplifies the solution to deliver results. And, once explained to planners, makes sense to them and is easy to understand and manage. Much like Fischer’s moves, the ideas and concepts are deceptively simple and profound.

Consider also the simple and profound concept within Flowcasting of daily, net change re-planning. At our most recent implementation the solution works like this: for any product that had a sale or change that occurred yesterday, then the entire supply chain is re-forecast and re-planned from consumer to factory for that item.

In retail, on a daily basis, only about 5-15% of the products experience a change daily. Only these are re-planned daily, adjusting the future flows of inventory to ensure you remain in-stock and your inventory is productive. All projections are easily and simply converted into the language of the business so that the entire organization is working to a single set of numbers. One other benefit of net change, daily re-planning is that it also dramatically reduces system processing requirements.

Flowcasting is an easy concept and solution to understand and most people wholeheartedly agree with the premise. The trick to making it successful is to understand the nuances, embrace its simplicity and instill, over time, that kind of thinking in your planning organization.

Once you do, then, from experience, your supply chain and indeed your company will work like a Symphony of Placid Beauty!

 

Franchisees and the Question of Control

 

I have a very strict gun control policy: if there’s a gun around, I want to be in control of it. – Clint Eastwood

helm_control

A number of years ago, utilities companies, telecommunications companies, insurance companies, etc. started offering customers automated payment options as a convenience.

The premise was simple: Why bother taking the time to pay your bills each month when we can simply (with your permission, of course) automatically take the funds from your bank account or credit card?

When this was first offered, I must admit that I resisted for quite some time. I preferred receiving the bills each month, logging into my online banking site, selecting the payee and filling in the dates and amounts. I had control.

Month after month, my bills would arrive, each time with an insert or a perforated flap on the return envelope encouraging me to just give them my bank account or credit card number (and relinquish my control) to make my life easier. I continued to resist.

On occasion, I would make a dumb mistake entering the amount or the payment date. As a result, I would get dinged with late payment fees or other charges. I considered these penalties a small price to pay for retaining my control.

After years of managing my bills this way – and for no reason in particular – one month I came to the realization that not once had I ever decided to pay any amount other than the amount due on any other date than the payment due date. Not once. Ever.

It turns out that I wasn’t truly “controlling my destiny”. I was just wasting my time.

So I started signing up for automated bill payment with everyone who offered it. The bill would still arrive a couple weeks before the due date so that I could review the amounts and challenge any mistakes (i.e. I still had control), but no longer did I have to bother with all of the administrative nonsense to actually make payments.

With good reason, more and more retailers are moving in the direction of centralized store replenishment. Each day, POS data is collected and shared with the home office. And in many cases, the stores keep perpetual on hand balances and active planograms for every item. By planning store replenishment centrally, retailers can reap huge rewards by extending the planning process from stores to DCs to suppliers in a tightly integrated fashion (how does 98% in-stock while simultaneously dropping inventory sound?).

It’s really a shame that retailers with franchisee, owner/operator or dealership models can’t likewise benefit from centralized store replenishment. And why not, you ask?

Because the franchisees would never relinquish their control.

Hmmm…

Do the franchisees all use their own separate systems for store operations and staff their own I.T. departments? Does each store owner have his/her own fleet of trucks to pick up shipments? Do they each deal directly and independently with suppliers to bring product into their own dedicated warehouses? Does each franchisee develop his/her own advertising and promotion campaigns to draw customers into the stores?

You see what I’m getting at. There is a long list of value added services that a franchisor already provides to its franchisee store owners. Why couldn’t store replenishment also be such a service?

Like with automated bill payments, there are a few simple elements required in a franchisee model to ensure that independent store operators retain their control, while only relinquishing administrative tasks that add no direct value to customers.

Common Goals

From a customer standpoint, there is no line of delineation between the franchisor and the franchisee. There is a shared brand that receives the blame for poor customer service (or the accolades for a job well done). The needs of the end consumer must always be recognized as the raison d’etre for both the franchisor and the franchisee and be built into the supply chain processes like at any other retailer.

Transparency

Consumer centric rules of engagement need to agreed upon and executed faithfully at all times. For example, when there is a supply shortage at the DC, available stock needs to be rationed. Every franchisee wants to get his/her shipment, but when there isn’t enough inventory to go around, stores at risk of losing sales (and alienating customers) must have higher priority than those whose displays contain sufficient stock, but just won’t look very nice for a couple of weeks.

Where rules cannot easily be made, open and direct communication is a great substitute.

Visibility

Ronald Reagan once famously quipped: “The nine most terrifying words in the English language are: I’m from the government and I’m here to help.” Many independent store operators will have a similar reaction if the franchisor says “Trust us to handle your store inventory.” Franchisees are business people. As such, they will likely not be in favour of blind trust as a way to manage the businesses that feed their families.

Instead, franchisees will be better served if they can see the replenishment plans that are being managed on their behalf (much like getting your bills a couple weeks before the due date) and have the ability set their own policies to suit their individual businesses.

From the standpoint of meeting the most basic needs of the customer, there is no difference between a franchisee retail model and a corporate store retail model. Customers want stock availability and a good experience (however they define that) at a price they’re willing to pay. The fact that the ownership of inventory may have changed hands at the back door of the store before getting to the shelf is – to the customer – administrative and immaterial.

Why, then, should the process for managing the supply chain from the supplier to the shelf be any different under a franchisee model than for a retailer with corporate stores?

Telephone Poles

telephone poles

It’s no secret that the Navy Seals are one of the most elite teams on the planet. Highly skilled, trained and motivated, they operate with exceptional levels of commitment and teamwork, performing missions around the world that demand excellence and pinpoint precision – like the missions to kill Bin Laden, or rescue Captain Phillips.

If you visit their training facilities in either Coronado or Virginia Beach you’re likely to notice one of their secrets to consistently churning out elite teams.

You’ll notice a stack of telephone poles.

They look like remains from a construction project or a stockpile for a utility, but for Seal Commanders they are sacred. They form the basis of a training routine called Log PT – an approach that instills teamwork, discipline, vulnerability and commitment.

Log PT is not complicated. Essentially six trainees perform a collection of maneuvers that look more like a barn raising. They lift them. Roll them. Carry them and move them from shoulder to shoulder. Do sit-ups while cradling them. Stand for long periods holding them above their heads.

There is no defined strategy for a team of trainees to follow. They must learn to work together, to build commitment and teamwork.

When done poorly, the poles buck and roll, and the team fights with each other, boiling emotions. However, when done well, it looks smooth, quiet and efficient. It has nothing to do with strength – rather it’s performed well when teamwork and harmony emerge. When a team member falters, almost invisibly another team member adjusts their efforts to keep the poles level and steady.

Log PT is the brainchild of Draper Kauffman, a WWII Veteran who got the idea for Log PT (and others that help form the core of Seal training) from being stationed with and serving with the Corps Franc, on the front lines in Germany.

Log PT was designed and first implemented in the late 1940s. And still, to this day, is used to train and prepare elite teams.

Think about that for a moment. With all the new and exciting technologies available today, a simple program based on teams working together and in harmony moving telephone poles around is the core technology used to produce elite teams and performance.

Let that sink in and the lesson on offer.

Everyday, if you’re like me, you’re being bombarded with claims of incredible breakthroughs of potential future performance with new and brilliant technologies – like AI, Big Data, Augmented Reality, Virtual Reality, Internet of Things, just to name a few. And to be fair, I believe the potential is and will be enormous.

The lesson here is that the most elite producing teams on the planet has yet to see the need or benefit of changing their approach – an approach that literally hasn’t changed since the 1940s.

Here’s an example from one of our clients that is consistent with the lesson.

When we demonstrate the Flowcasting planning process for one of our retail clients, many people are shocked to understand how the promotional sales forecast is derived.

It’s basically built from a demand planner looking at POS sales history for that item from past promotions and then, if needed, collaborating with the Category Leader – for situations where there is limited or no history and/or the promotional offer is significantly different than past offers.

They agree on what they think they will sell for the event and the system spreads that forecast down to the participating stores based on simple rules about that items contribution to sales, store by store.

That’s it. Pure simplicity.

Yet, like Log PT, it is delivering awesome results – better than any approaches used before. Helping to deliver industry leading in-stock for promotional events – a thorn for most retailers.

Planners and Category Leaders understand they need to work together, and they do, building commitment and accountability for the promotional sales forecast.

Please don’t think that I’m shitting on new technologies like AI, IoT and any others. I’m not. I believe that there is and will be enormous potential for these technologies and that they will also largely deliver on these promises.

But, I also believe in what is simple and works.

So do my client’s customers.

Software Selection: Who’s In Charge?

Decide what you want, decide what you’re willing to exchange for it. Establish your priorities and go to work. – H. L. Hunt

21609-cart-horse

You’re living in a cramped 2 bedroom apartment and you decide it’s time to buy a house.

You have a spouse, 3 kids, 2 cars, a dog and a home-based business. On that basis, you determine that you’ll need a 2 storey home with 4 bedrooms, an office, a 2 stall garage and a medium-sized yard.

You give this information to your realtor and she compiles a list of houses for you to look at. Most of them are 2 bedroom bungalows with no garage on postage stamp lots.

In spite of your stated requirements, the realtor has determined that a 2 bedroom house is less costly to heat and cool, the cars can be parked outside and a small yard requires less effort to maintain. Most importantly, there’s an abundance of 2 bedroom houses on the market right now, so she’ll be able to get you into a house more quickly this way.

All of those things may be true, but you’re the one who’s going to be living there for the next several years, not the realtor. Sure, some tradeoffs are possible (even expected) – maybe the two youngest rugrats can bunk together until the oldest goes to college, or perhaps you can build your home office in an unfinished basement after you move in – but in this scenario, it seems as though the realtor is more interested in meeting her requirements.

All too often, a similar story plays out when companies embark on the journey of selecting new software to run their enterprise. We’ve seen it many times firsthand when it comes to supply chain planning software, but it really applies to any area of an organization that uses technology.

The burning platform may come from the business (“Our performance and productivity is suffering because of this clunky old legacy system!”) or from I.T. (“We can’t support this piece of crap any longer!”)

Regardless of the impetus for change, it’s the next decision where things start to go of the rails: “Well, since we need new software, then I.T. should be in charge of selecting it, right?”

Um, wrong.

I.T. certainly has a critical role to play, but if you’re the manager of a business process (and people) that will need to be supported by new technology, you take a back seat in the selection process at your own peril.

There are 3 things to always remember:

1. I.T. can’t read minds

I.T. folks love business requirements. Lots of them. With as much detail as you can muster. It helps them to shortlist candidates and research alternatives. If you don’t invest the time and energy to carefully think about what you want the future state to look like and write down your requirements, then you’re forcing I.T. to guess them. This would be like telling a real estate agent to ‘find me a house’ without providing any other details.

2. What I.T. considers important in a software package is not what the business considers important

Yes, the business has requirements, but so does I.T. A new software package must perform a number of functions in order to enable a new process. But it must also be supported (and supportable), process appropriate volumes and fit in with the established architecture of the systems that won’t be changing.

3. The business people will be using the new software each and every day to do their jobs

This speaks to the relative weighting between business requirements and technical requirements. The cheapest solution with the best processing speed and architecture that’s impossible for a user to understand and doesn’t support the business requirements isn’t much use. In other words, business requirements are more important and consequential to the running of the business than technical requirements – there, I said it.

So, suppose you get a good set of business requirements and a good set of technical requirements. A few software vendors come in to demonstrate functionality with the business folks and talk tech with the I.T. folks. You short list it down to 2 vendors:

  • Vendor A meets 80% of the critical business requirements, but 65% of the technical requirements
  • Vendor B meets 70% of the business requirements, but 75% of the technical requirements

What do you do now? The same thing you would do if the realtor at the beginning shows you a few houses that lacking in some way when compared to your ‘wish list’. You talk it through. You figure out which tradeoffs you’re willing to make. You discuss where workarounds might be used to bridge a functionality gap.

None of that is possible if you don’t give yourself the choice.

Ungrain

In 1983 Benjamin Libet, researcher in the Department of Physiology at the University of California, performed one of the most famous and controversial experiments in the history of neuroscience.

In simple terms, Libet’s experiment measured and timed the response of the neural circuitry of the brain, based on some very basic commands – like moving your left wrist, followed by your right wrist.  What he discovered is that there is a time lapse between the decisions our neural circuitry makes for us and our awareness of the situation.

What that means, in a nutshell, is that for basic operations and requests the brain has already been hardwired, or ingrained, into a conditioned response, basically without thought.  The brain has seen this movie (or ask) so many times that the response is automatic.

For us folks who are working on changing people’s behaviors and habits, we can relate.  People become ingrained in current practices, processes and ways of thinking and it usually takes considerable time and effort to change – the thinking and the response.

Libet, however, didn’t stop there.  Further work, research and experiments concluded that there were generally only two ways to change the history of the brain as it relates to a specific ask or task.  They are asking WHY and making a JOKE of the situation.

Let’s look at an important supply chain planning example and focus on the WHY.

To date, most retail planners, consultants and solution providers have firmly cemented and ingrained the thinking that to systemically create a forward looking time-phased forecast by item/store (or webstore) requires that you forecast at multiple levels and then spread the higher level forecasts down to the lower (store) level.

Initially the thinking was that the aggregate level forecast would be more accurate, and that is usually the case.  But some people realized that the higher level forecast was of no value – it’s the lowest level of forecast that drives the integrated supply chain.

Asking and wondering WHY enough times eventually surfaced that the higher level forecast was really only helpful in determining a selling pattern, especially for slower selling products where a pattern was difficult to detect.

Our colleague, Darryl, not only understood but asked WHY it was necessary to forecast at a higher level.  Couldn’t the pattern be determined, at the selling location, without the need and complexity of forecasting at a higher level.

Eventually, he arrived at a simple, sensible solution.  In a previous newsletter, I outlined the key elements of the approach but the key elements of the approach are:

  • An annual forecast is calculated, along with a decimal forecast (by day and week) for the 52 weeks that comprise the annual forecast
  • A category or department level selling pattern is calculated at the store location (or other’s if needed)
  • Simple user forecast thresholds are applied against the annual forecast to determine the forecast time period and how to determine the selling pattern – including using the category/department level pattern from above for slow sellers (to get the sales pattern)
  • The same thresholds determine whether to convert the decimal forecast to integers
  • For the forecasts that will be converted to integers, a random number between 0 and 1 is calculated, then the small decimal forecasts are added from there and once the cumulative forecast hits 1, then an integer forecast is 1 is used in that period, and the counter and randomizer starts again…this logic is applied to the 52 week forward looking forecast

Now, while the above is tougher to write to help understand, our experience in outlining this to people is that they not only understand, but it makes intuitive sense to them.

This solution was originally key functionality of the RedPrairie Collaborative Flowcasting solution and is now available within the JDA solution set, aptly named JDA Slow Mover Forecasting and Replenishment.

Yes, but does it work?

The graph below outlines the sales forecasts of our recent implementation of Flowcasting at a Canadian hardgoods retailer, using this exact approach:

Slow-sellers2

As you can see, a significant number of products are slow or very slow sellers (54% sell less than one unit per month at a store).  However, using this approach the company was able to improve in-stock by 6%, while also reducing and improving inventory performance.

Having an integer-like forecast for all these item/store combinations is important since it allows them to calculate time-phased DC and vendor replenishment plans, along with complete capacity and financial projections – allowing them to work to a single set of numbers.

In addition, the solution is so much simpler in terms of understanding, flexibility and processing requirements.

Given the above, people should embrace this solution full tilt.  This should be a no-brainer, right?

Nope, wrong.

Our old villain, ingrained, has helped cement the view of higher level forecasting in retail.

It’s ironic, and a little sad, that a number of people and companies who advise and help companies change and learn new and presumably better ways have not embraced this approach, and instead are still pushing old, tired and ineffective solutions.

They need to ungrain their thinking (ungrain is the opposite of ingrain and yes, I made this word up!).

My advice is simple: if you’re a retailer who is forecasting at a higher level, or you’re someone who’s pushing this approach, please stop.

Learn. Understand. See it yourself.  Ask WHY.  And, importantly…

Ungrain the old and begin to ingrain the new.

Last Mile Delivery: Really Folks?

 

One way to boost our will power and focus is to manage our distractions instead of letting them manage us. – Daniel Goleman

shiny_object

Okay, first a confession out of the gate. The title, quote and image above might lead you to believe that I’m judging last mile delivery (and the broader omni-channel retailing discussion that goes along with it) as a ‘shiny object’ distraction.

I know that’s not entirely true. But I believe it is at least partially true.

To be sure, retail is changing and it’s changing rapidly. Customers want more choices in terms of how they make purchases and how they get those purchases to their homes – and they aren’t super keen on paying a lot more for these choices.

Retailers who put their heads in the sand and don’t actively address these challenges will (and in some cases already do) find themselves in serious peril.

Where is last mile delivery headed? It’s still evolving – but getting into those details is not the point of this discussion. I’m going to stay in my lane. At the risk of oversimplifying things, a sale is a sale and the supply chain planning challenge is to have the product available where the sale will be fulfilled.

The beef I have is that all of the discussion about last mile delivery seems to be making the blanket assumption that retailers have everything aced right up to the last mile.

As if to prove my point, I received an unsolicited email today (God only knows how many supply chain related online publications have my email address at this point) asking for my participation in a survey with the title: “Can we solve the last mile?” The opening two sentences read as follows:

“The last mile is bearing the brunt of the eCommerce boom. Yet, it represents a great source of angst and expense for retailers and last mile providers alike.”

After that is a ‘sneak preview’ of survey topics that focus solely on last mile problems – the implication (likely unintended) is that the challenges in the last mile are completely independent of all the activities that precede them.

Retail out-of-stocks have been a major problem since they started measuring it (8% on average and double that during promotions). The most prevalent cause cited by all of the major studies is inventory management and replenishment practices at store level. Not surprisingly, the lack of attention on solving for these causes means that they haven’t yet magically vanished. Perhaps someday, if we keep wishing really hard…

It’s pretty clear that ‘non Amazon retailers’ will need to make use of their bricks and mortar store network to enable whatever last mile delivery options they intend to pursue. How will they be successful in that regard with such abysmal out-of-stock performance and no idea what the accuracy of their electronic on hand records are (if they even have them at all)?

The day is coming when customers will expect to see store on hand balances on your web page before they submit a ‘click and collect’ order – what happens when the website says you have 3 in stock, but there isn’t any to be found when the customer goes in to collect?

Finally, we can’t lose sight of the fact that the ‘omni’ in ‘omnichannel’ is a latin prefix meaning ‘all’ or ‘every’. One of those ‘every’ channels is customers walking into a store, getting a cart, selecting products and paying for them at the checkout – kickin’ it old school to the tune of 91.5% of total retail sales.

Yes, e-commerce is growing like crazy, but it’s going to be awhile yet before online selling is truly dominant in retail as a whole.

And if (when) that day comes?

Again, I’m not suggesting that working out the last mile won’t be critically important. I’m just saying that retailers still have some work to do in getting basics right (like being in stock and knowing how much is on hand) in order to make it all work.

Princess Auto’s Flowcasting journey featured in Canadian Retailer magazine

CR_SC2017

Our client Princess Auto Ltd. is the subject of a feature article in the inaugural Supply Chain issue of Canadian Retailer magazine (published by the Retail Council of Canada). Click here to learn about how they are using the Flowcasting planning process to significantly improve in-stocks and profits while unleashing a new omnichannel fulfilment model. You can also download a PDF copy here.

 

A beautiful mind

Do you remember the movie “A Beautiful Mind”?

The film is based on mathematician Dr. John Nash’s life, and, during one part, attempts to explain how Nash got the idea for his equilibrium theory as a part of game theory. In the scene Dr. Nash is at a bar with three pals, and they are all enraptured by a beautiful blond woman who walks in with her friends.

While his friends banter about which of them would successfully woo the woman, Dr. Nash concludes they should do the opposite – Ignore her. “If we all go for her,” he says, “we block each other and not a single one of us is going to get her. That’s the only way we win.”  That’s the moment when he formulated his idea.

The idea that pops into Dr. Nash’s head at that moment is very instructive in the innovation process.  Often, real innovation happens because you are in a situation and you’re paying attention, or listening, and you just connect the dots.  It’s the subconscious mind at work, finally coming to grips with something you’ve likely been pondering for a while.

It’s a great film and a beautiful story.

Here’s another beautiful story of essentially the same approach that was used to create the breakthrough thinking and solution in demand planning at store level – which, as we know, drives the entire Flowcasting process.

In retail, forecasting at store level, systemically, has been a major challenge for a long time.  Not only do most retailers have millions of store/item combinations, they also need to deal with virtually every imaginable sales pattern.  But, by far, the largest challenge, is the large number of slow selling items – accounting for 50%+ of virtually any retailers assortment.

The main issues with slow selling items is twofold: finding a selling pattern amongst sparse data, and ensuring that the forecast reflected the somewhat random nature of the actual sales.

The hero in our true story is named Darryl.  Darryl is the architect of the RedPrairie Flowcasting solution (now part of JDA) and, specifically, the profile-based, randomized integer forecasting approach that has simplified retail store level forecasting to a beautiful, elegant, intuitive process that does something incredible – it works and is very low touch.

The baseline forecasting process works like this:

FcstApproach2

In Darryl’s approach, unlike that of other attempts, he first calculates an annual forecast by item/store.  Then simple user defined sales thresholds automatically doing the following:

  1. Determine what time period to use to forecast in (weeks, months, quarters, semi-annual)
  2. Determine which level of already pre-aggregated history to use to spread the annual forecast in the time period
  3. Determine whether to convert the forecast into integers – which he randomizes by store/item, ensuring that the same item across many stores will not have an integer forecast in the same week

How did he think of this?  Well, similar to Dr. Nash, he found himself in a situation where someone said something very interesting and it sparked his thinking and helped him connect the dots.

Rumour has it that Darryl was walking around a Canadian Tire store years ago and was talking to the owner of the store.  They approached a section of the store and the owner grabbed a particular product and said something like, “I don’t know when we’ll sell these, all I know is that we’ll sell two every quarter”!

BOOM!  The idea for a different time period for forecasting by item/store popped into Darryl’s head and this event triggered the thinking and eventual development of the baseline forecasting process.

This is a significant development – so much so that it has been patented and is now available with the JDA product solution set.  What it has done is obsolete the need for multi-level forecasting approaches that, to date, have been the norm in attempting to create store/item level forecasts.

This approach is simple, intuitive, elegant and is computationally blazingly fast – another key requirement in retail store level forecasting.

Oh, and it also works.  We implemented this exact approach during our very successful implementation of Flowcasting at Princess Auto.  The solution is forecasting items in all varying time periods and is creating store/item forecasts for products that sell from 1 unit a year at store level, to over 25,000 units a year.

Even more important is that the people that would become demand planners (with no prior knowledge or experience in demand planning) would understand and become proficient using this approach.  Just another benefit of simplicity.

John Nash looks like any other bloke.  But, without a doubt, he’s got a beautiful mind.

The hero in our story, Darryl is just like John.  If you met him, you’d immediately think he’s another Vermont farmer who’s good with hydraulics.  But behind those coveralls and hay-stained hands is…

A beautiful mind.