Managing in an uncertain world
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Transcript of Managing in an uncertain world
You
r C
om
pan
y
Uncertainty is Ubiquitous
Uncertainty Economy
Regulations Taxes/Tariffs Health Care Employment
Variability Customers Suppliers
Transportation Shoppers
Timing
Succeeding In Uncertain Markets . . .
“Business leaders today have an ever-increasing amount of data at their fingertips. But when it comes to forecasting, this data and the models they feed only provide an
illusion of precision and control.
Demand fluctuations are inherently
unpredictable so the key to success is not to try to predict the variability but rather to employ a strong process that manages
through the variability.
Phil Dolce, CEO
The Stow Company
Bob Stahl Background • 40+ years in manufacturing companies
- Started as Schedules Coordinator (1970)
• With help of Oliver Wight, achieved Class A success (1979)
• Became an associate of Oliver Wight – 1981 (passed in 1983)
• Have worked with some of the best companies in the world
- Today = S&OP Coach, Educator, Author
• Has written six (6) books with Tom Wallace –
- three (3) have been used for APICS Certification
- translated into seven (7) languages
• S&OP Editor and Columnist –
- Inaugural for the IIF’s Journal of Forecasting - Foresight
• Heads up support services for TFWallace & Company
• “Retired” = choices
Something to ponder . . .
“Service to others is
the rent you pay for your
room here on earth.”
Muhammed Ali
I’m no longer trying to make a living . . . I’m
trying to make a difference
You
r C
om
pan
y
Uncertainty is Ubiquitous
Uncertainty Economy
Regulations Taxes
Health Care Employment
Variability Customers Suppliers
Transportation Shoppers
Timing
What to do about Uncertainty
Manage Thru
External
Uncertainty
Your Company
Uncertainty Variability
Eliminate Internal
Uncertainty
“. . . the aim is less to
predict the future,
than to prepare for it’s
inevitable variability.”
David Orrell
Int’l Inst. of Forecasters
0
200
400
600
800
1000
1200
1 2 3 4 5 6 7 8 9 10
Accuracy Uncertainty
The Farther Out, the Less Valuable Detail Becomes
Suicide Quadrant . . . (Worst of All Worlds)
PTF
Horizon
De
tail
I
Suicide
Quadrant
II Aggregate
Only Quadrant
III Building to Customer Demand
Pu
blis
hed
20
01
Typical Responses to Uncertainty are (Natural, but) Flawed
Seek more detail, farther out
Hunker down… internally focused, self-
preservation mode
13
Multiple Constituencies . . .
Customers
Employees
(Suppliers, Community, Country, Planet)
Owners
Center
Of Gravity
Desired Force = Centripetal Natural Force = Centrifugal
Priority #1 – Get On the Same Page (Inside your Company)
Maximize your ability to react within the financial constraints you can tolerate.
Capabilities Constraints
Raising Disagreement . . .
A process to raise and reconcile disagreement/conflict, agree upon, &
communicate THE company game plan
Sales/Marketing
(Demand)
Operations
(Supply)
Finance
(Fiduciary Resp.)
Product Dev.
(Future Innovation)
President
The Ugly Moose . . .
• Big ugly animal
• All companies have them (under the table)
• Difficult & Contentious
• Good companies know how to disagree without being disagreeable
• Thrive on conflict, not chaos
• Moose is a symbol of agreement to do so
Getting the Moose on the Table
Conflict Resolution * . . .
• Disagreement has two parts: – Substantive issue
– Emotion behind that issue
• Disagreement becomes Conflict when both parts are not completely addressed
• Lasting Conflict Resolution must deal with BOTH elements of disagreement
• Doing that effectively can be learned: – With a motive to do so &
– A framework on which to work
* “Getting to Resolution” – Stewart Levine, JD
Conflict . . .
“Conflict
is the root of all
Waste” April 19, 2016
“Learn to identify and
address the common culprits of conflict
that manifest as waste .
. .”
Priority #2 – Simplify
Demand models need only be as “accurate” as your tolerance window &
fiscal constraints require
(Mis)Perception of precision and predictability
Plethora of data… see the forest
Priority #3 – Engage Establish a Collaborative Consensus
through a defined and disciplined process
Goal is to understand the tolerance windows across each piece of the supply chain
Succeeding In Uncertain Markets . . .
“Business leaders today have an ever-increasing amount of data at their fingertips. But when it comes to forecasting, this data and the models they feed only provide an illusion of precision and control. Demand fluctuations are inherently unpredictable so the key to success is not to try to predict the variability but rather to employ a strong process that manages through the variability.
The most effective process is executive S&OP,
but it must be embraced across the entire
organization for maximum impact.
Moreover, some of the best practices in eS&OP are counterintuitive such as operating with less detail. The benefits of a successful implementation are real (increased operating profit, reduced working capital, and increased service levels) and worth the investment.”
Phil Dolce, CEO The Stow Company
25
The eS&OP Process
Step #1 Data
Gathering
End of Month
Decisions & Game Plan
Step #5 Executive Meeting
Step #2 Demand Planning
Step #4 Pre-S&OP Meeting
Step #3 Supply
Planning
Creates a
Disciplined
Rhythm
The Real Challenge . . .
Understanding Executive S&OP is simple.
The hard part is . . .
Behavioral/Cultural
Change changing the way everyone does their jobs.
Keys: - Full cross functional buy-in
- Counter-experiential/intuitive - Comfort vs Change - Path of low risk
60/30/10 Rule (The Success Rule):
• 60% = Behavior / Culture Change
• 30% = Process Definition & Discipline
• 10% = Technology Lora Cecere
Boston 2010
Keys to “Managing Thru”
Simplify
Maximize flexibility (Agile)
Engage entire organization
Engage entire supply chain
Understand others’ constraints
Be transparent, especially with assumptions
Key Takeaways
• Accept that uncertainty / variability is inherently uncontrollable
• Use eS&OP to manage thru uncertainty & variability by engaging all stakeholders – Inside your enterprise – Upstream and downstream in your supply
chain • Align Human Energy by resolving conflict,
gaining collaborative consensus
Meet the International Speaker (10:35 – 11:05)
Speaker’s Corner
Atrium #1
(between SYSPRO Lounge &
I-Plan Networking Area
Thanks for Listening . . .
Good Luck & Best Wishes Bob Stahl [email protected]
508-226-0477 (USA)
www.RAStahlCompany.com