Change the Conversation

October 29, 2013
4:48 pm

It is Monday morning. As the sun rises, I find myself on the 6:00 AM train drinking coffee. I am giving thanks that I am able to do what I do.
There is nothing like a cup of coffee at this time of morning. As I hold the warm ceramic mug in my hands, the horizon rolls forward with the rhythmic sounds of the train on the track. I love the sounds of the train. I am lost in thought about the client that I am going to spend the day with. It is the end of a long project, and I am excited to share their data. There is such power in being able to pull together quantitative data with financial benchmarking analysis and qualitative interviews to help them see new insights. It is great to pull back the covers and help companies see the new trends and insights on supply chain excellence through research methods.
In work with clients, I find that they have good intentions and they want to be more outside-in and demand driven, but they get caught in a traps, because they have not changed the conversation. This will be a primary focus of my session today.
Volatility is rising, supply chains are becoming more important and complexity is making resiliency tougher. All are good reasons to have the conversation….
Here are the sticking points that I see:

Focus Less on Perfect Numbers. Embrace Demand Error. Demand volatility is increasing and the technologies to manage demand are maturing. In this transition, it is more critical to learn to use demand data than to make the demand number perfect. As a result, the discussion needs to be less about the “demand forecast number” and more about the probability of demand. Companies need to try to reduce demand error to the extent possible, but realize that demand error is a reality of managing a supply chain. As a result, leaders need to drive the effort to embrace demand error and design the network to drive the same cost, quality and customer service levels given the level of demand error. This requires using new forms of analytics for inventory optimization and network design and doing less on spreadsheets.
Help others to Understand the Impact of Complexity. Nine out of ten companies are stuck in their ability to make progress on operating margin and inventory turns. To understand this, a good place to start is the measurement of the forecastability of the products in the demand plan and understand how this is changing. Track the impact of rising complexity on forecastability and the impact on the inventory plan.
Reduce Bias and Error. If only companies could sell what they forecast. Most companies have a large, and positive bias. To counteract this, actively use Forecast Value Add techniques (FVA) to reduce bias and error.. Communicate progress on a monthly basis. Push to help leaders understand the impact of demand bias on customer service, safety stock and slow and obsolete inventory.
Help others to see the Options. Actively Design the Network. As you do, focus less on the levels of inventory and more on the trends and right sizing of the forms and function of inventory. (The form of inventory is the state of inventory and includes decisions for raw, semi-finished goods and finished goods. The function of inventory is the role that the inventory plays in driving the right supply chain response. The function of inventory includes cycle stock, in-transit stock, promotional stock, safety stock, seasonal stock, etc.) Actively model and help peers to understand the impact of rising complexity on the form and function of inventory. As you design the network, build push/pull decoupling points and buffers.
Focus Forward. Finance and accounting use largely backward measurements. Push the executive team to focus forward in the design of measurement systems. Lead teams to focus on forward-looking business flows through the channel. Align the flows to maximize customer service taking ownership for sell through the channel not just sell-into the channel. Don’t stumble and get hung up on only measuring backward-looking measures.

Any others that you would put on the list?
This week, I am at the Consumer Goods Technology (CGT) conference. I hope to see you in my travels.

Navigating Supply Chain Economic Downturns

August 30, 2026 5:28 pm

In 2007, the average company took six months to sense market shifts and adapt its supply chain. My estimate, based on work with clients, is that if a downturn happened today, the average company would take 20-30% more time to adjust than in 2007. Here I give insights on preparedness.

Warning: Sidestep the Narrative of the Misguided Goldiggers

August 10, 2026 4:58 pm

Ten years ago, I started writing a book titled Stories of the Misguided Gold Diggers. The book was a collection of stories from two decades of stories of technology leaders perpetuating the myth of integrated end-to-end supply chain planning.

I dusted off the manuscript on Saturday. I think that we have a new chapter. Companies focused on putting Artificial Intelligence (AI) on top of existing architectures are putting AI Stupid on steroids.

The Myth of End-to-End Planning

July 31, 2026 9:14 pm

Supply chain planning, supply management, supply chain execution, network design, and transportation/logistics management operate in silos. Not much has changed over four decades. The connections flow back through transactional systems: order-to-cash and procure-to-pay. There is a myth that companies can buy an end-to-end supply chain management solution. This is largely a myth. Here we explain.

Lead Time: A Broken Gossamer

July 16, 2026 6:38 pm

If you are struggling with supply chain planning, dancing in the light of shiny objects, and scratching your head, please read on. My goal is to help you.

Please do not AI Stupid. What do I mean? AI Stupid is putting agents and agentics on top of existing architectures believing that making them faster and hands free add value. To me, this is fools play.

I love AI. I am excited about new technologies. To this end, I want to shine a light on how new technologies can help address the black holes and inconsistencies in today’s supply chain, which largely stem from the limitations of the first generation of supply chain planning and execution technologies. In this blog, I give you three places to start.

Do You Need a Supply Chain Coach?

July 9, 2026 5:27 pm

Supply chain is where the rubber hits the road. For a public company, over 40% of market capitalization is tied to the trade-offs between growth, operating margin, inventory management, and Return on Capital Employed.

The road for supply chain improvement is fraught with issues. Here we share some and offer some advice.

Is your Supply Chain AI Ready?

June 11, 2026 2:39 pm

A simple quiz to assess an organization’s AI readiness.

The pace of change is fast and furious. Every day, technology advances faster than we can digest. A great challenge to have.

Determining whether a supply chain is “AI-ready” is less about technology and more about the gray matter between the ears of supply chain leaders. Leadership, alignment, and clarity of goals matter.

Too few companies are clear on the definition of supply chain excellence. Measuring and rewarding functional metrics reduces the firm’s value. Putting agentics on top of today’s processes can make bad practices run faster, reducing value.

The toughest job for the supply chain leader is challenging existing supply chain paradigms that were defined by the limitations of decades of supply chain technologies. As the curtain lifts on the potential of new forms of technology, process redefinition is our opportunity, but only if we are clear on what drives value. (Here, I link to the Supply Chains to Admire reports to help you define value. The next report will be published on June 23rd, along with my Dynamic Benchmarking Product, to help you define value in the face of your AI readiness. More information about the launch is at the bottom of this blog.)

Supply Chain Shaman