FMCG AI or !!SQUASHED CAT!! ... Re: [Ailist] experience

[Roger Davies]

Great example Lionel,

Although I do not work directly with Supply Chain people my experience of
being near to them is that you may run across a lot of data driven Six Sigma
folks who all think that the supply chain can be perfectly modeled and
optimized. Whilst there is some validity in using a statistical approach one
has to bear in mind that all supply chains operate in a dynamic environment.
Any demand forecast is only accurate at the moment it is made and is out of
date the moment after.

In my role in operations I always preach that measurements tell you where
you are in relation to where you were. They are good markers but you are
walking through uncharted territory so treat them with respectful caution.
Extrapolating a trend based on historical measurements out into the future
is fraught with potential pitfalls. As stock market investment advice always
says 'prior performance is no indicator of future performance'. As Lionel's
example shows how important it is to think of each step as a step into the
unknown. Make your best decision based on what you know about the challenge
and what you know about your own strength. Ai does not replace or degrade
statistical approaches. It augments them by keeping the data in context
which in turn helps you to make good use of it.

Roger

-----Original Message-----
From: ailist-bounces at lists.business.utah.edu
[mailto:ailist-bounces at lists.business.utah.edu] On Behalf Of Lionel Boxer
Sent: Thursday, May 14, 2009 2:18 PM
To: relationshipresources at fuse.net; ailist at lists.business.utah.edu
Subject: FMCG AI or !!SQUASHED CAT!! ... Re: [Ailist] experience

In the early 1990s I worked with Proctor and Gamble Australia's logistics
operations.

This was before AI and before I became aware of social constructionism.  I
was very much a technocrat in those days.

We applied KPMG's Logistics Management consulting methodology, which in part
bore a striking resemblance to quality circles / total quality management /
process improvement.  When I implemented the program for P&G some of them in
the room said, "we did this quality stuff before" and I asked, "did you
apply it?", to which they asked, "were we meant to?"  After a few hours they
said, "when we did quality before it was nothing like this approach to
resolving issues - it was all about calculating statistical distributions".
To which I replied, "if you need the statistical tools you can pull them out
of the tool box - at this stage you really need to focus on achiving some
basic sorting out of how you think about the things that are challenging
you." (In those days I did not speak in such AI terms - I spoke more about
problem solving - so, the quotes above are not verbatim!)

Interestingly, the subcontracted warehousing that handled all the orders for
Australian and New Zealand took very well to the program and I faciliatated
a little more logistics focused continual improvement team work with them
than P&G was able to cope with.  The owner of the business said to me,"I do
not know what you did to those guys, but they are different people".  All I
did was approach things that they wanted to solve in a positive and
empowering way.  They were a rough bunch, who preferred to refer to the
fishbone diagram as a squashed cat (when I asked them what it looked like
one of them said SQUASHED CAT!).  So, that is what we called the Ishikawa /
fishbone diagram for the balance of the week.  The call for commencing a new
project became "!!SQUASHED CAT!!" - can you picture this room full of
scruffy and rough tattooed men engaging in real appreciative discussions,
resolving issues and making the world a better place?  It was not that
perfect a utopia, but we did achieve some remarkable progress that even
surprised me.

The P&G supply chain we worked with involved fast moving consumer goods
arriving in Sydney from all over the world, being received, warehoused,
picked for orders, packed, loaded on trucks/containers, and despatched by
road, rail and ship (to New Zealand, where it was then distributed
domestically and to the Island nations around NZ).

At the time, I recall that P&G was reported in the Australian Financial
Review (public news paper www.afr.com) as having about $7,000,000 excess
logistics costs in the SE Asia region.  As I understand, the outsourced
logistics operator saved P&G $1,000,000 in the first year and then retired
with the other $1,000,000 he earned as profit in the first year.  However,
that is hearsay and not based on anything other than that the next time I
spoke to him he returned my call from his yacht in the Witsundays (islands
north east of Australia, on which he apparently lived).  So, there is
apparently big money to be made from sorting out supply chains.

P&G is a great business - it has the same challenges all big businesses
have: embedded people who have forgotten how to think and they get them
selves entrenched into places that confound organisational effectiveness and
efficiency.  Leadership challenge is to find these people and help them
realise that they do not have the right to obstruct resolution of the mess
they are part of (recall: http://intergon.net/tsw/sustainableceos.pdf)

!!SQUASHED CAT!!

Lionel Boxer CD PhD MBA BTech(IndEng) - 0411267256 Associate of RMIT
University - lionel.boxer at rmit.edu.au Graduate School of Business my
"Assessment of Quality Systems with Positioning Theory" 
now in a googe book - see link at http://intergon.net
>>> <relationshipresources at fuse.net> 05/15/09 3:46 AM >>>

Hello all
Has anyone ever done any work with supply chain clients?  Any suggestions
about this particular kind of business and AI Joan

--
Joan Colleran Hoxsey D.Min., MSed
Principal, Relationship Resources LLC
Co-owner AIC
513 681-2513

"Be the change you wish to see in the world"...Gandhi
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