Managing in an

Uncertain World Bob Stahl

eS&OP Coach

R.A. Stahl Company

You

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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

“I don’t like forecasting . . .

particularly when the future

is involved!”

Yogi Berra

Typical Responses to Uncertainty are (Natural, but) Flawed

Seek more detail, farther out

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

Fog of Uncertainty . . .

Can diminish our

ability to see

simple solutions.

“Ultimate

Sophistication is

Simplicity” *

* Oliver Wight

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

A Truth . . .

If you align

human energy

an organization can do things not before possible.

32

Center of Gravity . . .

Customers

Employees

(Suppliers, Community, Country, Planet)

Owners

eS&OP

Meet the International Speaker (10:35 – 11:05)

Speaker’s Corner

Atrium #1

(between SYSPRO Lounge &

I-Plan Networking Area

Good Luck . . .

When

Preparation

meets

Opportunity

Thanks for Listening . . .

Good Luck & Best Wishes Bob Stahl RStahlSr@aol.com

508-226-0477 (USA)

www.RAStahlCompany.com