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Why Integrated, Causality and Emotional Thinking are a Must For Supply Chain Improvement

business teamwork - business men making a puzzleCausality-there is no escape from it, we are forever slaves to it. Our only hope, our only peace, is to understand it. To understand the “why.” “Why” is what separates us from them…”Why” is the only real source of power, without it you are powerless.

MEROVINGIAN, The Matrix Reloaded (2003)

How did Isadore Sharp Make the Four Seasons Hotel into Fortune magazine’s list “Top Companies to Work for” every year since 1998? In the book – Opposable Mind: Winning Through Integrative Thinking – Isadore Sharp desired a hotel model that combined both intimacy of his small hotel and amenities of big convention hotels that business travellers wanted. While everyone was choosing one or the other type, Sharp created a new integrated model. He was the first to introduce shampoo in shower, 24 hour room service, bathrobes, makeup mirrors, hair dryers, and dry cleaning for that at-home feeling. He also introduced two line phones as well as well-lighted desks for that “office” feeling. As you know, ALL the competitors followed suit, but Sharps Integrated and causality thinking was unimaginable to his competitors at that time.

I began my business career in aerospace. I started off in Inventory Control, went and left auditing (thankfully, because the managers despised me – who likes being audited by a 22 year old?). After that I was off to Production Planning, then promoted to Senior Buyer/Planner with constant, pounding stress and travel. I escaped to a major SAP project and eventually to Pharmaceutical, Aerospace and Consulting companies. My Integrated thinking now combines my vast Business Operations, SAP, Supply Chain, Consulting, Pharmaceutical, Aerospace, Project Management and Speaker skills. I connect the dots from forecasting to delivery of product much easier now.

Options, Conflict and finding the best solution. When a client decided to allow the Sales team to decide Inventory Safety Stock levels, it wasn’t integrated thinking that was being used. More like linear thinking. But once we looked at reducing inventory levels and discovered that one particular forecaster had $200,000 of safety stock on one material, we saved at least $150,000, and in the future we asked both Sales and Production to make safety stock decisions together. Integrated thinking brought together the following pieces – an Inventory Reduction project, Forecasting and Production decisions, Capacity Constraints, Safety Stock levels as well as Abnormal Demands. The big picture was to reduce costs inventory costs for the entire company. The pieces identified one low hanging fruit – $150,000 dollars’ worth. Integrated thinking found the first logical cost reduction.

Looking at the Big Picture while solving the smaller puzzles. Integrated thinking requires finding the best solution while keeping the entire problem in mind (like Inventory Reduction) while working on its individual parts (Safety Stock). Specializing places binders on your head since you don’t look at the architecture, but focus at problems as linear, parallel or sequential. Then only a segment is improved as opposed to the entire company.  A Supply Chain or Sales and Operations project (no matter how big or small) should keep the entire Planning Cycle in perspective to bring profound change. Don’t you always want your entire S&OP cycle or Supply Chain to be improved? It’s not easy as there is more flux and integration these days and requires robust knowledge and experience.

Does complexity have to overwhelm? No. In the Inventory or Hotel example connecting the dots and causality are the key to removing complexity. If I supply shampoo bottles, will clients feel more at home? This is the causality link. Yes, that small gesture made clients feel more like at home and it eliminated more complex solutions. It simply made clients happier. If I create an Inventory project can I reduce my safety stock first? Again the causality was in reversing the initial decision of letting Sales make the Safety Stock rules. To reduce complexity, do you need a team to investigate the entire architecture? Of course you sometimes need a team. Teams broaden the integrated thinking, look for causality in meetings and review the architecture in a holistic drive for innovative solutions.  I am working with a team right now and we are using our combined experiences to create a new model to optimize any Supply Chain in the world. It’s all about using standard data mining tools to simplify the entire process.

I work because I want to make people happy and their jobs easier. When we talk about causality and integrated thinking, let’s not forget about emotion. Humans are emotional creatures. People also want to feel meaning and purpose in their work lives. When I was consulting at a major Bus manufacturing company, 12 people used excel spread sheets to perform the same tedious task.  I advised them that with SAP I could remove that task and free all their time up. I wasn’t just focusing on a new technical solution, I was focusing on the bigger problem. People were irritated with their current situation and I had a chance to make their jobs and lives easier. Integrated thinking. The use of excel spreadsheets caused them to make part of their day monotonous and I could make it more purposeful.  Remember when putting in shampoo bottles made clients feel more at home in a hotel?

I am motivated to learn because I need to know, to connect the dots and go from good to outstanding. I read books, I write articles and I speak at conferences to push my boundaries. I want to learn and make the connections as well as get a bit better each and every day. I want to make work an enjoyable place for everyone I encounter. That is the reason I am now a Supply Chain Architect.

Integrated thinking is;

Finding a solution from a blend of opposite thinking

Comprehending the big picture while breaking down the pieces

Reducing complexity through team work

Finding out how causality comes from an emotional place

Terry Vermeylen is an Innovative & Visionary Senior Consultant, Leveraging Diversity, Entrepreneurship and Strategic Partnerships.

Terry Vermeylen brings 30+ years of experience in SAP and Business Supply Chain Process improvement. He has consulted the US Navy and some of the world’s largest and most successful manufacturing companies focusing primarily on the Aerospace and Pharmaceutical industries.

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