Innovations & smart thinking by Demand Driven Institute

I had the opportunity to attend Certified Demand Driven Planner workshop conducted by Carol Ptak at Pune (26-27 Aug, 2016). Learning directly from the creator of a whole new body of knowledge is a privilege. I have penned my thoughts on the smart thinking and innovations made by Carol Ptak and Chad Smith at Demand Driven Institute (www.demanddriveninstitute.com). The entire endeavour is to use "Relevant Information" to take decisions and impact actions towards increasing ROI.

1. Building on the foundation of available knowledge.
2. The APICs definitions with which the Supply Chain and Operations Professionals are well versed with are not tempered.
3. Highlighting the fact that Supply Chains are not linear systems which can be optimised. Rather they are Complex Adaptive Systems which can sense, adapt and learn continuously. This puts in context the constant struggle that companies trying to adopt SAP APO are encountering in their struggle to get a handle on the materials requirement planning conundrum based on forecasts.
4. Using the TOC knowledge of supply chain dilemma to frame the problem succinctly. 
5. Clearly articulating the conflict arising out of lean efforts which undermine the importance of MRP usage in the organisations who have invested a tidy sum in acquiring the enterprise software. The divergence of thinking is at the level of planning every item on Bill of Materials - independently (Lean) or in a dependent manner (MRP) as well as generating supply order at the planning stage (MRP) or at the execution stage (Lean).
6. Highlighting the fact that severe cause of variability which gets accumulated and amplified to result in Bull-Whip and System nervousness is in the dependent nature of the structure of Supply Chain and BOM.
7. Clearly articulating the wrong assumptions that trip the usage of MRP, Re-order point systems, Safety-Stock. The assumptions have become invalid over a period of time and have been the root cause of the problems faced by the companies but the approach followed by most of the people was work-around on excel worksheets creating a veritable "Excel Hell".
8. Pointing out the fact which stares everyone in the face. Lean, Six-Sigma, TOC and MRP  are trying to solve the problems are doing it to protect and promote FLOW. There is a complete agreement on the objective of protecting and promoting flow but lot of disconnect in the mechanism adopted to meet the necessary conditions to achieve the objective.
9. Suggesting a ground breaking idea which is elegant in its simplicity. Use decoupling points to store design inventory. This is "one thought" which qualifies Dr. Eli Goldratt's criteria of giving Nobel prize - "Why did I not think this up?", "Oh, isn't it obvious?" and it is easy to communicate in one page.
10. The result of decoupling is a new term coined by DDI - Decoupled Lead Time (DLT). DLT is shorter than Cumulative Lead Time (CLT) (Inventory no-where) and Manufacturing Lead Time (MLT) (Inventory everywhere). The inventory in the system is stored which provides value - dampen variation on both supply and demand side, shorten lead time, be the point for generating supply orders and increase ROI and is constantly being impacted by the stream of incoming orders.
11. The innovative use of knowledge of MRP to size the different zones of the buffer with very specific function assigned to each.
12. Providing for managing special cases of demand variations by dynamically as well adjusting the buffers in a planned manner. This is a serious innovation which gives coarse+fine tuning knobs for managing the buffers,
13. Innovative "Net Flow" equation to generate Supply Orders. The fact that Demand Driven Operating Model has no use of Forecasts in the tactical time-frame is ingrained in this equation. The regular consumption of buffer and the Sales Order spikes in the immediate horizon of DLT at the buffer closest to customer becomes the first signal into the system which get cascaded through to the vendors in an innovative Decoupled Explosion. The result is PULL based on actual demand and not PUSH because of Sales Forecasts.
14. Having two distinctive perspective of the buffers - planning and execution - decisions and actions based on "Relevant Information" for each perspective.
15. A complete new knowledge for integrating the Strategic Business Planning and Tactical Execution through Demand Driven S&OP.

Overall impact of these innovations and smart thinking on the part of Demand Driven Institute should result in getting more and more organisations to start adopting this "Thoughtware" which is created on the foundation of FLOW.

Vedanta and Theory of Constraints

Dr. Eliyahu Goldratt, passed away on this date, three years ago. He was an honest scientist who said what he saw as reality.

Eli spent his entire adult life fighting to show that it is possible to make this world a better place. We must have the honesty to see reality as it is, we must have the courage to challenge assumptions, and above all, we must use the gift of thinking. Having applied these principles to various management fields, he created the Theory of Constraints (TOC). His concepts and teachings have expanded beyond management and are being used in healthcare, education, police work, counseling, government, agriculture and personal growth - and the list of the fields using TOC goes on and on. Dr. Goldratt's legacy is invaluable. 

To my mind, he was a Modern Rishi (a sage, seer), just like the Rishis who discovered Vedanta and propagated it through various means.

Vedanta (Veda + Anta) means culmination / end (anta) of knowledge (Veda).

The people, Rishis, who wrote our philosophical books – Upanishads, Vedas, Puranas, Ramayana, Mahabharata, Bhagwad Gita etc were actually scientists. Like any scientist they got into the journey of discovering cause and effect relationships explaining the visible phenomena. Unlike natural scientists, who focused their attention on external phenomena, these Rishis focused on human experience.

VedantaTreatise is a digestible version of their discoveries of “Laws of nature” governing human experience.

Each one of us is a unique combination of three qualities:

1. Sattwa - goodness, truthfulness, thus illumination
2. Rajas - passion and desire
3. Tamas - indifference, inertia, ignorance and thus, darkness

A human being in whom tamas predominates is surrounded by a cloak of darkness because typically he is lazy, self-centered, deluded, his discordant thoughts and actions bringing suffering to himself and others.

A person in whom rajas is dominant is cloaked in an aura clouded with his passions and desires and, although he might be clever, creative, even heroic at times, he will be held back from advancement if he is centered too much on himself, on possessions and personal gains.

One in whom sattva predominates is surrounded by a radiant halo that reflects his virtuous, wise, and compassionate nature. His dedication to the welfare of others brings peace and stability to every situation. But even he, if he is too attached to what is noble, beautiful, and true, will be blocked from rising into higher realms. (Cf. Heinrich Zimmer, Philosophies of India, p. 231.)

As we are aware, our consciousness continually rises and falls through these levels and conditions. When asleep we are in the tamasic condition; when awake and active, in rajas; and when we are thinking and working for others, or wrapped in spiritual contemplation, we are in the sattvic state. However, these qualities seldom exist singly. Their interaction adds variety to our lives, not only creating challenges for us to meet but tending to balance, strengthen, and/or neutralize the influence that one or the other guna exerts. 

These qualities also apply to all beings throughout the cosmos, from the divine to the microcosmic.

What is the value and purpose of these intricate and interesting teachings?

They can help us understand the nature, movement, and function of our manifold being, and give us the incentive and tools by which we can improve our lives and hasten our evolution. By freeing ourselves from attachments and then by sublimating these qualities within our nature -- transforming tamas into tranquillity, rajas into compassionate action, and sattva into divine altruism -- we raise our focus of awareness from jagrat (Waking State) to svapna (Dreaming State) to sushupti (Deep Sleep State) and enter the realms of turiya, (The Fourth State).

However, this goal is not quickly attained. Obstacles arise. The hindrances of ignorance, egotism, and attachments test our resolve and hold us captive in this world of illusion, or Maya. But we can overcome. 

We can become one with "the Self which is free from sin, free from old age, from death and grief." Our whole nature will then be so spiritual that the worlds and desires we sought to attain will be ours to bless and uplift.

I find lot of parallels between Theory of Constraints and Vedanta especially the essence:

1. Global Thinking
2. Focus

The five focusing steps as per my understanding are:

TOC	Vedanta
1.    Identify the system constraint.	The ignorance of answer to the question “Who am I?” “The Real I.”
2.    Decide how to exploit the constraint.	Gain knowledge (Read and Contemplate on) of the “Laws of nature” which help in getting the true answer.
3.    Subordinate everything else to the above decision	Surrender in the application of the above laws and drop all smart decision making geared towards enhancing local optima.
4.    Elevate the system constraint	Get deeper and finer understanding of the “Laws of nature” by constant study, contemplation and application.
5.    Warning! If in any previous step a constraint is broken, go to step 1. Do not allow inertia to cause the next constraint.	The journey is to remove “Tamas” with “Rajas”, “Rajas” with “Satwa” and “Satwa with nothing”. Allow only the INTELLECT to be in control. MIND has a tendency to get comfortable and cause slip-back.

Learning Vedanta and TOC is a never ending joyous journey!

Plant a tree!

“A tree is a wondrous thing. It runs entirely by solar energy. It turns water and carbon dioxide into building material. It is powerful enough to split rocks. It can contain up to 50,000 cubic feet of wood. It has a plumbing system that can raise water 100 times as efficiently as the best suction pump. It is the oldest and largest living thing on earth. It can tell time. It may grow to 300 feet in height, yet it supports itself entirely through a network of roots that are finer than a string. It may pour hundreds of gallons of water into the air in a day’s time. It befriends us by taking and using our waste products (carbon dioxide) and returning life-supporting oxygen. It sometimes grows so large that it contains enough wood to build a community of 50 six-room houses. It protects itself with bark against insects, disease, and fire. It does all these things and never moves.”

—Anonymous

There are initiatives to plant trees in some places which can act as inspiration to Indian cities to embark on such ambitious projects.

http://www.plantonemillion.org/

http://www.milliontreesnyc.org

http://milliontrees.ca/

http://www.milliontreesla.org/

http://milliontreesgurgaon.com/