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!