Nineteen Sixty-Six was a great year for English football (soccer). It was the year that England won the World Cup – their only world title to date. It was also a great year for English football as it’s the year that the great Eric Cantona was born.
Who’s Eric Cantona? He’s the forward that became the talisman that helped transform Manchester United into perennial English Premier League champions and help set United on a course for sustained dominance that few sports had ever seen. In a 26-year period, United won the title 13 times – still a record number of Premiership titles.
For us historians, 1966 was also a great year for Flowcasting.
What? Flowcasting hadn’t even been invented then, so what the hell am I talking about.
Most inventions/innovations are built on concepts and ideas that have come before them – with the innovator taking an idea or concept and looking at it from a different perspective to build something new. Flowcasting certainly followed this path.
Around 1966 a Czech-born American pioneer named Joseph Orlicky developed a fundamental concept called dependent demand – a concept that would become foundational to inventory management and the backbone of Flowcasting.
Dependent demand is a simple, powerful concept. It basically asserts that there are many product demands that can be calculated, or are dependent, from the demands of other products. Take many parts on a car, for example. Once you determine how many cars of a certain type you think you can sell, you can calculate a significant number of demands for products that are dependent on the finished-car forecast. Things like tires, hoses, clamps, etc., can all be calculated rather than forecasted.
Orlicky would use this fundamental construct to help design and implement what would become Materials Requirements Planning (MRP). The dependent demand concept would be used in what was referred to as a Bill of Material (BOM) – which outlined a complete list of raw materials, parts, components, and quantities needed to build a product.
In the mid to late 1970s, Andre Martin would leverage the concept of dependent demand to essentially develop the building blocks of what we now call Flowcasting.
He was intrigued with how to connect and plan a fully integrated supply chain from point of consumption to point of supply. He would take the Bill of Material idea and flip it, to create what could be called a Bill of Distribution – how a product would flow from supplier to store, based on the concept of dependent demand.
So, for a product sold by a retailer, if you forecasted what might sell in each store, you would use the Bill of Distribution to calculate what the DC would need to ship (essentially the demand plan for the DC) and then the DC could calculate what the supplier would need to ship and that could be shared with the supplier to help them plan. Regardless of how a product flows from supply to consumption, the only place a forecast would be required is the point of consumption – all other demands can be calculated from this based on the Bill of Distribution using the dependent demand concept.
Hence the concept of Flowcasting was born – yes, all the way back to the mid to late 1970s. And, fundamentally based on the concept of dependent demand.
1966 was a great year for English football.
Turns out, 1966 was also a great year for Flowcasting.
Thank you, Joe!