Author Archives: Mike Doherty

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Mike Doherty

Four Hundred Forty-Nine

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“Failure is an option here. If you’re not comfortable with failure, you’re not comfortable with innovation.”
– Jeff Bezos

Unilever is a consumer-packaged goods giant. Several years ago, they had a serious production problem at one of their factories near Liverpool, in the north-west of England. They were making washing powder in the standard way – the way washing powder is still made today, where boiling chemicals are forced through a nozzle at very high speeds and as the pressure drops, they disperse into vapor and powder. Then, the vapor is siphoned off and the powder collected in a vat, where additional chemicals and ingredients are added and then sold as washing powders.

The problem Unilever had was that the nozzles didn’t work very well or smoothly – they kept clogging up. They were inefficient (causing numerous production delays), kept blocking and produced varying grains of powder, of different sizes. This was a major issue for Unilever, not just because of maintenance and lost time, but also in terms of the quality of the product which was rightly disappointing customers. They needed to develop a better nozzle. Much better.

So, they turned to an internal team of crackpot mathematicians. Unilever, like many large industrial giants, could afford the best and the brightest and had on staff a team of math folks who were experts in high-pressure systems and fluid dynamics. They were also experts in the physics of what is called “phase transition” – the process that governs the transformation of matter from one state to another (e.g., from liquid to gas).

The expert math team did what experts often do – they delved deep into the problem and developed sophisticated equations and solutions. After a long period of study and design, they came up with a new and what they believed was brilliant, design.

Problem was, it didn’t work. The powder granularity remained inconsistent, and the process was still inefficient.

In desperation, Unilever also turned to their team of biologists – a team with no knowledge of fluid dynamics and phase transitions. This team had something else that would prove crucial – a design approach that was rooted in experimentation. A test, fail and learn approach. One that seemed to understand that failure was part of learning, and often a necessity for innovation.

Instead of a brilliant design, they would make some minor tweaks, try it, see what worked and didn’t work, adjust and test again. Then, rinse and repeat, until they had a better nozzle that worked in practice, not just on paper.

They would take ten copies of the nozzle and apply a small change to each one, then test each one to see which ones failed, but importantly, which one performed the best. They would then take the “best” nozzle and do the same thing again: create ten slightly different copies and then repeat the process. Then repeat it again. And again. And again.

After 45 generations they had finally developed a nozzle that was excellent.

A world class nozzle had been built because of testing, discarding and improving upon four hundred forty-nine ‘failures’.

Progress/innovation had been achieved not by a grand, brilliant design, but instead by rapid interactions with the real world.

An approach, it turns out, that is fundamental to designing something better, even in supply chain management.

When it comes to inventory planning, people are embracing the concept of Flowcasting. That’s good. In my opinion, the breakthrough that’s made Flowcasting possible, is the capability to forecast, replenish and managing slow and super-slow selling items at store level.

The best solution to this chronic issue that had plagued planning system providers, was developed and architected by our long-time colleague, Darryl Landvater of the Oliver Wight Americas Team. And, largely by using the same approach as the biologists from Unilever – a test and learn approach, refining based on real-world learning’s, then doing it again and again until an elegant, intuitive solution was proven.

I won’t bore you with the details, but repeated tests and learning’s helped him understand and correctly conclude that managing slow sellers at the store level is simultaneously a forecasting and replenishment issue. His solution is the only approach that I know of that manages both the forecast and replenishment plan at store level in unison. It ensures a valid simulation of reality and, critically, that inventory can be maintained close to the store safety stock level for these types of items. That’s critical for a retailer, since most retailers have a significant percentage of slow sellers.

I’ve never asked Darryl how many ‘failures’ he endured on his journey to developing his slow seller solution, because it doesn’t really matter.

I’m just glad he did.

Keep buggering on

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There are few people that have had such a profound impact on world history as Sir Winston Churchill. A personal hero of mine, Churchill was an inspirational statesman, writer, orator and leader who led Britain and her allies to victory in the Second World War.

Churchill was an enduring optimist, who believed in duty, hard work and a never say never attitude. In my humble opinion, it was his passion and total belief that ultimately freed Britain, and Europe, from the grip of the gestapo.

An accomplished writer and orator, he was renowned for many sayings that summarized his philosophy and outlook on things. One of these, was the phrase “keep buggering on” – a phrase used to encourage people to keep going, even when faced with overwhelming odds. Churchill believed that to achieve one’s goal, you need to “keep buggering on” – never giving in and continuing the journey until you reach your goal.

I’d like to share a true story of my colleague, Andre Martin, who – for roughly 50 years – has “kept buggering on” to realize his dream of a completely connected, seamlessly integrated supply chain from consumption to source; what we call Flowcasting.

To begin, let’s turn the clocks back to 1974. Andre has a huge problem on his hands as the Director of Manufacturing and Distribution at Abbott Labs in Montreal, Canada. He’s getting beat up about and trying to understand why the service levels in Similac (an infant nutritional product), and others, are dismal. They hover around 90% or so, but the target is 98%, or better. To make things worse, his manufacturing and distribution folks are at loggerheads and often in a fight.

Andre recalled a Jay Forrester article entitled “Industrial Dynamics” written in 1958 and decided what was needed was an inventory planning system that connects and manages 4 separate levels of inventory – their 10 regional DC’s supplied by a central DC, which was supplied by 3 factories which were supplied by multiple vendors.

About the same time a colleague recommended that he attend an Oliver Wight MRP seminar in Boston – which he did and where he met Oliver Wight. Soon after he would retain Oliver Wight in a consulting capacity. Andre would share his idea how he was thinking of planning production and synchronizing purchases with suppliers using the principles of MRP. Given that Abott had two more levels of inventory to manage, what Andre concluded was that he needed a four-level planning system that would integrate all levels.

Ollie liked the idea and agreed with the concept but informed Andre that no such software system existed in the market. To realize his design, he would need to develop it himself but could count on Ollie’s support and guidance should he choose to do so.

In fact, Oliver Wight informed Andre that he knew a person that could help develop the new software and introduced him to a young dude named Darryl Landvater. Two days later Darryl visited Montreal to work with Andre and began the journey to develop the very first integrated DRP/MRP solution – connecting distribution and manufacturing into an integrated system.

Once designed and implemented, the results were phenomenal! Service levels increased to 98-99% consistently, inventories were reduced at all levels by 25-60%, obsolescence was down by 60% and the cost of production fell by 15% as well.

Given the success of this initiative, Andre continued to think about seamlessly integrating any industrial supply chain. At the 1975 APICS conference in San Diego, California, he’d confirm his thinking. He had been pondering about an integrated supply chain driven from store-level to supplier using the principles of what they implemented at Abbott Labs. His breakthrough idea was that he flipped the MRP concept of a bill of material and instead created a bill of distribution – so the integrated supply chain could be driven by only one forecast.

At the conference he’d bump into and discuss this idea with the legendary Dr. Joseph Orlicky, the father of Material Requirements Planning (MRP) and a planning guru. Upon hearing Andre’s idea, Joe thought about it for a few minutes, then responded in a profound manner. “Andre”, he said, “your idea is sound, because you should never forecast what you can calculate.”

Not long after his success with Abott Labs and the DRP/MRP integration, Andre would join the Oliver Wight organization to help take DRP mainstream, including writing the seminal DRP book and later a book called “Infopartnering”. During his time at Oliver Wight, he would help lead the successful implementation of DRP with more than 40 companies – helping to cement the principles of DRP in distribution and manufacturing.

He then decided that the thinking should be taken to retail. To that end he would work with early retailers like Sears to help them implement DRP for their distribution operations, including early pilots of supplier scheduling in retail – i.e., sharing time-phased shipment projections with merchandise suppliers.

He would re-join forces with Darryl and create the Retail Pipeline Integration Group, focused on helping retailers embrace these concepts and drive their entire integrated supply chain from a forecast of consumer demand at the store level. They would help several retailers, including my team at Canadian Tire, and dabble in determining what was needed to build a retail focused solution capable of enabling Flowcasting – including how to process the massive volumes in retail and the retail specific planning challenges, like managing slow sellers as an example.

Based on their learning regarding a retail-focused solution during their initial prototypes and pilots, they would visit several large planning solution providers to convince them that a retail solution would be needed. All the major players declined to build one. So, given they were both committed to the cause, they decided to build a solution themselves. It’s a solution that has eventually found a home with the Oliver Wight Group – ironically the organization where the ideas, thinking and concepts of integrated planning largely originated.

In terms of the Flowcasting concept, early pilots and implementations have proved, beyond a shadow of a doubt, that Andre was correct in his initial thinking regarding an integrated supply chain. In retail, the entire supply chain for early adopters is driven by only a forecast of consumer demand and all other demands are calculated – providing all partners a model of the business and the ability to work in harmony using a single set of numbers.

Andre is retired now, but he still interacts with me and the original Flowcasting pioneers to share his wisdom and talk a little smack about hockey (btw, Andre, the Leafs are better than the Canadiens, at least for now).

I suppose that I’m now one of the ones that will continue to drive the thinking and adoption of the principles and concepts of Flowcasting. Which reminds me of another famous Churchill quote to help inspire us; “Never give in. Never, never, never, never—in nothing, great or small, large or petty.”

Don’t worry, we won’t, so when it comes to Flowcasting adoption…

We’ll “keep buggering on”.

Scaffolding

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It’s an early spring weekend, 1991. A cold and dreary day. Several of America’s sharpest young minds have gathered at a hotel near Detroit. After the students find their way to their seats and the event starts, the room would fall dead quiet. All eyes were fixated on the 8X8 rows of squares. It was the start of the National Junior High School Chess Championships.

The tournament was usually dominated by teams from fancy, elite schools. Most of them had the resources and desire to make chess part of the school curriculum. Dalton – an elite New York school – were the defending champs and had won three straight national championships. For students at Dalton, chess was part of student life.

At school, every kindergarten student took a chess class, and every 1st grade student studied the game for an entire year. As they did in subsequent years. The best players would receive additional lessons from some of the country’s best chess teachers. When it came to chess, Dalton was a powerhouse and the odds-on favorite to win again.

That year, another New York based school had entered the competition as a bit of an unknown wild card. They were the Raging Rooks – students representing a school hailing from Harlem. The Raging Rooks were a group of poor students of color, mostly living in neighborhoods dominated by drugs, violence, and crime.

No one gave the Raging Rooks a chance. As they walked nervously into the hotel, many heads turned. They had very little in common with their wealthy, elite opponents.

To everyone’s shock, the leading teams stumbled slightly, allowing the Raging Rooks to tie for first place. In under two years, the poor kids from Harlem had become national champions. The biggest surprise wasn’t that they had won – it’s why.

They won because they had had great scaffolding.

In construction, scaffolding is a temporary structure that allows workers to scale heights beyond their reach and work/build safely. Once the job is done, the support is removed. After that, the building stands on its own.

In learning, scaffolding serves a similar purpose. A teacher or coach offers initial instruction, knowledge and guidance, and then gradually removes the support. A key goal is to shift the responsibility to you, so you develop your own approach and methods to learning. That’s what Maurice Ashley – the coach of the Raging Rooks – did. He provided structures, coaching and guidance to give them the opportunity and motivation to learn and improve.

He would use unorthodox and creative ways to provide scaffolding to help the students not only learn but become very interested in chess, including self-learning and improvement. They would draw and use cartoons sometimes to highlight key moves and variations. Other times, they’d write stories about chess matches. They also wrote and recorded rap songs about the importance of central control of the chessboard.

As they became better and more of a team, the players started taking the motivation and opportunity to learn into their own hands. They would study and analyze each other’s games, with a goal for better understanding and learning. They didn’t care about being the smartest player in the room – they wanted to make the team smarter.

Another type of scaffolding is teaching others, with research showing teaching, tutoring or having to explain ideas and concepts boosts the tutor’s own learning. The oldest children appear to benefit from explaining to their younger siblings, for example.

As it turns out, scaffolding is crucial in learning and development, which was used extensively by Ashley to coach his chess team to a national title. It’s about aiding at the right time, gradually reducing support as the student learns and increases their competence. This approach not only fosters independence but also instills confidence, paving the way for individuals to harness their potential and improve their overall competence.

In my opinion, scaffolding is crucial for any business transformation – especially, as an example, for retailers who are moving to a holistic, integrated inventory planning approach like Flowcasting. The better the scaffolding, the better the implementation – both in the short-term and, importantly, the long term.

From experience, a coaching and support team that provides learning about the underlying principles and concepts of Flowcasting helps planners learn and understand. Not just the how, but the why. Flowcasting is not about the calculations (though, that’s important to learn as well). It’s about changing the working relationships amongst the entire retail eco-system participants, improving collaboration and working in harmony with a single set of numbers, driven by the heartbeat of the consumer. It’s about changing behaviors, and that kind of change needs to be supported by good scaffolding.

Ongoing coaching, including discussions and example walk-throughs regarding business scenarios and applying the principles/concepts helps to further ingrain new ways of thinking and working. The more a coaching and support team provides ongoing learning to the entire organization (including the merchants, suppliers and key service providers), the better. In short, the more scaffolding the better. In these kinds of transformations, the scaffolding is not temporary, like it is in construction. It needs to be enduring.

In my opinion, it’s so important that I would argue that the long-term success of a transformation to Flowcasting, or any other significant business transformation, can be determined by how well you answer this question…

How good is your scaffolding?

Think Inside the Box

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Flowcharts are standard tools for delivering projects. At an overall project level, it depicts, from left to right, what needs to be done and the rough sequence, with the project concluding when the goal is achieved in the final box on the right.

The goal is the box on the right. Every project, or change initiative, should begin by thoughtfully exploring what should go in that box. Some people call this “thinking from right to left”, and other people in various disciplines have used different language to describe what is fundamentally the same idea.

“Backcasting” is a term coined by University of Toronto Professor John B. Robinson to help in urban, environmental and energy planning. Backcasting starts by developing a detailed description of the desirable future state and then you work backwards to determine what needs to happen for that aspirational future state to become reality.

The key is detailed. The more detailed and specific you can articulate the desired future, the better.

Amazon founder Jeff Bezos is a Backcasting superstar and an inventor at heart. One of his brilliant inventions/innovations is the PR/FAQ document. His brainstormed idea was to make the traditional last step in a project, the first. To pitch a new project and have it embraced at Amazon, you need to write a PR/FAQ document – outlining the desired future state of the project, including the goal of the effort in the opening sentences of the press release.

The initial PR/FAQ document is shared with the leadership team, who meet and read the document in silence. Then they begin to provide input and feedback. People ask hard questions and engage in intense debate, discussing key ideas about the project, very focused on the goal and how it will help the customer.

The author of the PR/FAQ document then takes the feedback into account, revises the document and brings it back to the group. And this process unfolds again. And again. And again. Everything about the project is pressure tested and improved through multiple iterations. And the beautiful thing is that the concept that finally emerges is seen with equal clarity amongst the team and, importantly, everyone is on the same page from the start of the project.

Everything that happens after project approval is working backwards from the PR/FAQ – essentially backcasting from what’s in the box on the right.

The critical component of the approach is that the box on the right – the goal of the project/initiative or the desired future state – is a written narrative.

When you need to document your project using proper sentences and complete thoughts, it makes a significant difference to the quality of the idea/proposal. You can’t hide behind PowerPoint bullet points, and the thinking needs to be clear, concise and able to be understood by a critical team reading the document. This forces the project leader/team to think better. Getting people’s involvement and feedback through multiple iterations strengthens the narrative and helps to build commitment.

At Demand Clarity, when it comes to narratives, we’ve become Bezos disciples. We now use a 6-page written narrative for both our initial assessments of how well a retailer is in terms of planning and for outlining our future state recommendations – whereby we usually articulate how Flowcasting could work for the retail customer/client. The narrative approach has improved our thinking and the quality of the work we’ve delivered.

However, what’s inside the box on the right can also be used early during the project as a key change management mechanism for articulating the change and, more importantly, building commitment and ownership – especially amongst the senior leaders and sponsors.

The idea would be to document a future-dated PR/FAQ document to describe the end-state transformation to a Flowcasting-driven, integrated inventory flow planning process, whereby everyone in the extended eco-system was planning to a single set of numbers. The document should outline how the extended organization (including suppliers) would be working in the future and, importantly, contain quotes from all key stakeholders about the impact of the change. These quotes are building commitment for change.

This change-focused PR/FAQ document would be shared and referenced throughout the project teams and leadership/governance teams to help ensure people stay focused on the goal, understand the change and stay committed to the transformation. The written narrative about what’s in the box on the right becomes the rallying call for change.

I’m pretty sure you’ve heard the phrase “you need to think outside the box”. Sure, that’s good advice in many cases but to drive real, meaningful and lasting change you need to start by articulating, in detail, the desired change or future state.

You need to “think inside the box”.

The box on the right.

Secret Formulas of Implementation Success

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As someone who’s been doing project work for decades, I must admit, it’s always cool and rewarding when you implement something. Shipping your work and having it exposed to reality instead of theory is the essence of innovation – taking an idea, or a design, and making it real.

But implementation work is hard, especially for a business process like Flowcasting since it touches, interacts and changes a large part of a retail business and extended eco-system.

I’ve been very lucky over my career to have either led, or co-led, three successful implementations in retail of Flowcasting or major elements of the concept. As an implementer at heart, over the years, what’s emerged are some mechanisms I’ve used that I believe are instrumental in success.

What I’d call my secret formulas.

For a key one, we’ll turn the clocks back to the mid-to-late 1990s. At the time I was the leader of a team for a national, Canadian hardgoods retailer, who’s mandate was to design and implement new processes and supporting technology to improve the planning and flow of inventory from supplier to store shelf.

The team had essentially designed what we now call Flowcasting and had selected technology to support the process. While we all understood that planning from the store level back was technically infeasible, we decided to forecast DC-level demand, and calculate and share forward looking supply projections with our merchandise vendors – in the process instilling the concept of supplier scheduling in retail. I won’t bore you with the details, but the project was quite successful and helped cement some of the principles of Flowcasting in retail, including supplier scheduling and working to a single set of numbers.

For a project of this size, like most larger scale transformations, we had a cross-functional governance team established – essentially like a steering committee – that would help guide the project and provide advice and suggestions to the implementation team. And to be honest, they did a good job.

However, inevitably, when a group of that size and functional diversity is tasked with guiding and asking questions of the leader (in this case me), there are bound to be some dumb asks and even dumber suggestions.

That was the input for me to develop my “Rule of 3”, which I/we used successfully on this implementation, and I’ve used ever since.

It works like this. If the ask/suggestion from the steering committee or large governance group sounded mental to me, I’d note it down and tell everyone I’d think about it. Then, I’d go back to the team and see what they thought. If they agreed it was mental, I’d ignore the ask/suggestion. And I’d continue to ignore it until the group had asked a third time – at which time I/we’d develop a response.

The beautiful thing about this approach is that seldom does the request ever get asked again, let alone a third time. It’s forgotten and therefore requires no cycles of thought or response from me and the team. I’m not exactly sure why but my thinking is that in larger groups people tend to like to hear themselves talk – they want to make suggestions/contributions, so they can’t help themselves and sometimes make a dumb suggestion or ask. Then, by the time the next session comes around, they completely forget about their initial request.

As an example, when I was working with our Winnipeg-based retail client designing and ultimately implementing Flowcasting, me and the team leader had to regularly present to a large cross functional group about Flowcasting – how it would work, the benefits, the implementation approach, etc.

I remember at one large, cross-project session a participant asking something like “How will the new process factor in social media sentiment into the demand planning process, to potentially revise the forecast of that item and others?” My response was, “Not sure yet, but we’ll think about it”.

I remember the team leader asking me after, “what are we going to do?”. My answer was simple: “Nothing. We’re going to ignore that and see if it’s ever asked again”. It wasn’t and the rest is history.

Now, not to brag or anything, but this client was able to improve daily in-stock from about 92% to 98%, while reducing both DC and store inventories, all while completely ignoring social media sentiment (whatever that is). Thanks to the Rule of 3.

Now, don’t get me wrong. I’m not saying that most of the suggestions from steering committees and cross functional groups are/were dumb – they’re not. I’m saying that a certain percentage will be and you, as an implementer, need a mechanism to ignore them and/or say “No” nicely, so you can stay focused on what matters.

For me, it’s The Rule of 3. It has been a loyal friend to me, over many years and implementations, and I hope you can use it – or something like it – as well.

It’s one of my secret formulas of implementation success.

Repetito est mater studiorum

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“Repetition is the mother of learning, the father of action, which makes it the architect of accomplishment.” – Zig Ziglar

When I was growing up, I was a very competitive dude, particularly in sports. When it came to sports, for me, winning was everything. Basically, I was an asshole. Many of my friends and foes called me by a different name. What’s the name they used? Oh yeah, a cunt. It’s OK, it was the truth and they often called me that to my face.

Here’s a story, from high school, that helps confirm my then status. 

In the basement of our school, down near the gym, there was a ping pong table. And, during lunch and breaks, students would play. The rule was simple: the winner stays on the table, until someone beats them, and then they take over. So, a very good player could play for quite a while.

One day, me and my pals sauntered down and watched as a girl named Dana beat all comers. Then, at the insistence of my mates, it was my turn to challenge her. She crushed me. My buddies, of course, knowing how competitive I was, absolutely shamed me that day and for many weeks after.

So, what did I do?

I did what any red-blooded, super competitive dude would do. I bought my own racket and a ping pong table.  I was determined to win.

Ping pong tables fold in the middle where the net is so that, when folded, the other side of the table is upright. It allows a single player to hit the ball, over the net, against the other side of the table and it pretty much guarantees that the ball will be returned. So, I set up the folded table in my parents’ basement and, every chance I got, would go down and pound balls against the returning wall.

Over and over. Harder and faster. Learning how to put overspin on both a forehand and backhand. Learning how to smash and return a smash. Repetition after repetition – for hours and days on end.  

I would soon get to challenge Dana again. And, with my buddies watching, I would demolish her and would become not only the ping pong champion of my school, but also the best high school player in the county.

The moral of this true story isn’t to confirm that I was an asshole. The moral of the story is highlighting the importance of repetition.

There’s an old Latin saying, “repetito est mater studiorum” which means repetition is the mother of learning.

When it comes to instilling new ways of working, turns out repetition really is the mother of learning.

Implementing a new planning approach like Flowcasting in retail benefits greatly from repetition. You’re essentially teaching the planners and the wider organization (including suppliers) how to think differently about integrated demand and supply planning, so the more often people are exposed to the idea, the better. 

I recently read a great book about change called The Human Element.  In it they outline one of the most important strategies for instilling change is to “Acclimate the Idea” through repetition and repeated exposure (i.e., give people time to think and internalize the idea/change)

In a recent implementation of Flowcasting, the idea of repetition was leveraged extensively to help people make the change journey, including:

  • An ongoing education program which started with a cascade from the CEO and delivered repeated educational sessions to help people internalize the change in thinking and underlying principles of the new process
  • Process prototypes where the Buying Teams (Merch and Supply Chain) would execute a day in the life scenario, with company-specific data for every major planning scenario – like product life cycle, promotions planning, seasonal planning, etc.
  • A supplier education & training program to teach suppliers and the Buying Teams the new approach to collaboration
  • Training sessions to demonstrate how people would execute the new ways of working
  • Coaching sessions and ongoing coaching with job aides to help people transition from the old to the new

What do all these activities do? 

They constantly repeat and demonstrate to people the underlying change and principles of the new process. As an example, in each of the process prototypes, the Buying Teams could see what was meant by a valid simulation of reality, what the supplier would see in their supplier schedules, why postponing creating a purchase order for promotional volume was better for everyone, plus many other learnings. Repetition, with real scenarios, helped them instill new thinking and helped acclimate the ideas.

Getting good at anything (Flowcasting or ping pong) requires learning.  And learning needs repetition.

After all, she really is the mother of learning.

A dynamic, digital twin

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Frank Gehry is widely acclaimed as one of the world’s greatest architects. His most famous and celebrated building, the Guggenheim Museum in Bilbao, is the design and subsequent construction that elevated him to superstardom.

The story of how Gehry designs and the technologies he used to develop this, and subsequent masterpieces, is instructive and very relevant for supply chain planning and management.

Gehry usually begins by sketching ideas on paper with scrawls that would mystify most folks. Then he mostly works with models – usually working with wooden building blocks of different sizes that he stacks, and restacks, always looking for something that might be functional and is visually appealing.

Until recently, he’s worked with these types of models his whole life. His studio is filled with them – the culmination of decades of model building. He usually starts at one scale, then tries another and then another to see the project from varying perspectives. He zeroes in on some aspects of the design in his model, zooming in and out until he better understands the design from many different viewpoints and angles. He’s always trying new ideas, reviewing his designs with his team and client, eventually deciding on what works or doesn’t. Eventually he settles on the design and then they get on with it.

After landing the project to design the Guggenheim Bilbao, he and his team spent the better part of two years working through these iterative models, using the decidedly analog world of building blocks and cardboard to visualize the result.

Then, our old friend technology made a house call and changed his design capability forever.

Gehry would be introduced to computer simulation software called CATIA, allowing Gehry to build his designs on a computer. Originally the software was built to help design jets but was modified to allow buildings to be designed – on a computer – in three dimensions. Early in his career his designs were mostly straight lines and box-like shapes, but this technology would allow him to design curves and spirals that would be beautiful and aesthetically pleasing.

CATIA’s capabilities proved incredible. Gehry and his team could alter the design quickly, change curves or shapes, and the system would instantly calculate the implications for the entire design – from structural integrity to electrical/plumbing requirements, to overall cost. They could iterate new ideas and concepts on the computer, simulate the results, then rinse and repeat, and only then, once happy, begin construction.

The Guggenheim building was first fully designed on a computer.

In a moment of foreshadowing, the design and digital design process was labelled a “digital twin”. Once the digital twin was finalized and agreed to, only then did construction begin.

The term “digital twin” has become somewhat fashionable and, to be honest, quite important in supply chain. And what do people mean by the term “digital twin”, when thinking about the supply chain? Here’s one definition…

A digital twin is a digital replica of a physical supply chain. It helps organizations recreate their real supply chain in a virtual world so they can test scenarios, model different nodes, modes, flows, and policies and understand how decisions and disruptions will impact network operations.

For most supply chain folks, the digital twin is relatively static and represents the current state, or outlines a snapshot of the supply chain, as of today – for example, what’s happening in the supply chain, as of right now.

But, like Gehry’s ability to dynamically change design elements and immediately see the impact overall, wouldn’t the best digital twin for supply chains also be dynamic, complete, and forward-looking?

It would.

And isn’t that what Flowcasting is?

It’s a future-dated, up-to-date, complete model of the business. It depicts all current and projected demand, supply, inventory, and financial flows and resource requirements, based on the strategies and tactics that are driving a retailer and their trading partners. If something changes, then the dynamic model re-calculates the projections – so the forward-looking digital twin is always current. Everyone can see the projections in their respective language of the business (e.g., units, cases, dollars, capacities, resources) and work to a single set of numbers.

The architectural “digital twin” was a breakthrough approach for Frank Gehry and architecture in general.

The forward-looking, dynamic “digital twin” – that is, Flowcasting – is a similar breakthrough approach for supply chain planning.

New Model for Retailer-Supplier Collaboration

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Thank you to Supply Chain Management Review for publishing our latest article, “A New Model for Retailer-Supplier Collaboration” in the March/April edition of their always excellent magazine.

Check it out here: https://bt.e-ditionsbyfry.com/publication/?m=24891&i=816750&p=34&ver=html5

The article outlines a new approach to collaborative inventory planning, based on the profound insight of Dr. Joseph Orlicky and the ideas and concepts developed and implemented by our long-time colleague, Andre Martin.

We’d also like to thank two forward-looking companies, Princess Auto Ltd and Watson Gloves, for agreeing to be featured in the article, demonstrating that the approach works and benefits consumers and both retailer and supplier.

It turns out that Joe and Andre are right – you should never forecast what you can calculate!

Subtract

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“Life can be improved by adding, or by subtracting. The world pushes us to add because that benefits them. But the secret is to focus on subtracting.”

                    - Derek Sivers

People don’t subtract.

Our minds add before even considering taking away.

Don’t believe me?

Leidy Klotz is a Behavioral Science Professor at the University of Virginia and a student of “less”. He conducted a series of experiments that demonstrate people think “more” instead of “less”.

Consider the following diagram and the ask.

Thousands of participants were asked to make the patterns on the left and right side of the dark middle vertical line match each other, with the least number of changes.

There are two best answers. One is to add four shaded blocks on the left and the other is to subtract four shaded blocks on the right.

Only about 15 percent of participants chose to subtract.

Intrigued, Professor Klotz and his research assistants concocted numerous additional experiments to test whether people would add or subtract. They all produced the same result and conclusion – people are addicted to and inclined to add. It wasn’t close.

Big fucking deal, right?

Not so fast. Unfortunately, adding almost always makes things more complicated, polluted, and worse. You’d be better off subtracting.

A great example in supply chain is demand planning.

Demand planning, according to many, is becoming the poster child of adding. Let’s factor in more variables to produce an even more beautiful and voluptuous forecast. Are you sure you all these additional variables will improve the demand plan?

I doubt it.

First, many companies are forecasting what should be calculated. It’s been proven that the farther away from end consumption you’re trying to forecast, the more variables you’ll try to add. And the resulting forecast usually gets worse the more you add – since you’re often adding noise.

We have a retail client that is forecasting consumer demand at the item/store level only and calculating all inventory flows from store to supplier – what we call Flowcasting. Their demand planning process only considers two variables to calculate the baseline forecast:
• the sales history in units
• an indication if the sales was influenced by something abnormal (e.g., like promotions, clearance, out of stock, etc.)

All “other” variables that the “experts” say should be included have been subtracted.

Yet their planning process consistently delivers industry leading daily in-stocks and inventory flows to the store shelf.

The idea is simple, profound, and extremely difficult for us all. For process and solution designs, and pretty much everything, you need to remove what’s unnecessary.

You need to subtract.

Soak Time

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“If a plant gets nothing but sunlight, it’s very harmful. It must have darkness too.” – Robert Pirsig

Did you know that if a plant gets nothing but sunlight, it’s extremely harmful and even deadly? It must have darkness as well. In the sun, it converts carbon dioxide to oxygen, but in the dark, it takes some oxygen and converts it back into carbon dioxide.

People, as it turns out, are the same. We need periods of darkness – essentially doing nothing – to develop ideas and/or internalize new ones. We often refer to it as “soak time” – the time where you let your mind just soak stuff in, subconsciously thinking about things. This, inevitably, helps your understanding and allows your creative juices to work.

Turns out many creative folks embrace the concept of soak time.

The film director Quentin Tarantino outlines his creative process and the role of soak time. This is his approach. He basically writes during the daytime. Then after a while, he stops writing. Now comes the key part of his process, he says. “I have a pool, and I keep it heated. And I jump in my pool and just float around in the water…and then, boom, a lot of shit will come to me. Literally, a ton of ideas. Then I get out of the pool and make notes on that. But not do it. That will be tomorrow’s work. Or the day after. Or the day after that.” Another filmmaker, Darren Aronofsky, said, “procrastination is a critical part of the process. Your brain needs a break…so that even when you’re not working, you’re working. Your brain is putting shit together.”

In his excellent book, Deep Work, Cal Newport teaches the benefits of downtime. One study by Dutch psychologist Ap Dijksterhuis showed that when working on a complex problem or decision, you should let your unconscious mind work on it as much as possible. Anders Ericsson wrote a seminal paper, “The Role of Deliberate Practice in the Acquisition of Expert Performance,” which showed that our brains have a limited window for cognitively demanding efforts. “Decades of study from multiple fields within psychology,” Newport writes, “all conclude that regularly resting your brain improves the quality of your work.”

For us, soak time is a core component of our approach to help people change and embrace new technologies and ideas like Flowcasting. It’s why we start the education process very early – so people have time to soak in the new thinking, ponder it and slowly accept it (hopefully).

Designing new processes and work methods also benefits from regular and ongoing doses of soak time. Instead of plowing through a design phase, grinding your way through session after session, a far better approach is to work on some aspect of the design, then let it sit, or go dark for a while. Subconsciously though, that beautiful brain of yours can’t turn off the tap – and will be thinking and pondering even when you’ve gone dark on that topic. The result? Better designs and solutions, guaranteed.

When I consult with retail clients, I’m aghast at how little soak time is built into people’s calendars, especially for folks that work in Home Office or Support Centres. Everybody seems to be busy doing busywork, and there’s barely time to schedule a 30-minute session, let alone have some soak time. The organization would be far better off by scheduling 20-50% of slack time for all these folks – essentially blocking off time for them to daydream, read, walk, or just do nothing at all. Let the mind wander and subconsciously connect things.

In both my Canadian and UK home offices I have a couch. When I need to let things soak, I sometimes go for a walk, or most of the time, I just lay down and do nothing. Just rest and relax and let the mind soak for a while. I do it often, almost every day and for some period.

Does it help? Yes, I think it does. Sure, over time, most of my ideas have been shit, but the odd decent one slips through. I’m convinced it’s because of nurturing it with soak time.

If you’re delivering projects or have a job that requires you to develop new ideas and initiatives, then my advice is simple: plan and schedule lots of soak time.

Maybe also get a couch so when you need to, you can just lie down and relax, breath slowly and let your mind wander and connect stuff, all while converting oxygen to carbon dioxide.

Sorta like a plant does.