Sustainability and the Reverse Supply Chain: The Green Eileen Story

At the recently concluded Supply Chain Insights Global Summit, I heard a talk from Cheryl Campbell and Kevin Cooke from the Eileen Fisher Company. Cheryl founded the Green Eileen company as a non-profit which was supported by the owner Eileen Fisher Company. She had a desire to make Green Eileen sustainable in the near future and she was looking for ways to do so.

A chance meeting with William McDonough (author of the book Cradle to Cradle) and an exposure to a story about a young designer in England who paid her customers to bring the clothes back made Cheryl think of doing the same at Green Eileen. Thus she formed a program of bringing back clothes where she started with Eileen Fisher’s employees and slowly expanded to the customers of the company. Over the years, this has taken off and the slide below shows some of the statistics.

Kevin talked about how the time of this awareness in the fashion industry has come. He compared this to the food industry when about 15 years ago, people started becoming aware of the source of their food. As proof, he pointed to the number of food documentaries on Netflix. In

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Supply Chain of 2025: Global with Strong Regional Characteristics

Recently, I participated in a podcast with Lora Cecere where we discussed the following question: What would the supply chain of 2025 look like? Questions like this are always fun to consider. Of course, they would be easier to answer if one had a crystal ball. Below is where my mind went as we discussed this topic.

One of the things I have found quite remarkable in the last couple of years is how quickly cutting edge products are becoming available through big parts of the developing world. It seems the information revolution and the internet age have ensured people everywhere are aware of new products equally. Be it the next greatest electronic device or a viral music video. The highways of information dispersion are fast and efficient. Once the information reaches the four corners of the world, typically the effect is to generate a desire for the product or at least some of its features. This desire is the first step towards an actual demand. Historically, this has created some demand but it was always insignificant. However, I believe these days it is no longer insignificant and indeed is making for a long tail of the normal curve. (The

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Imagine the Supply Chain of 2025

Recently, I attended the Supply Chain Insights Global Summit. The theme of the event was to imagine the Supply Chain of 2025. The size of the group allowed for some good networking and very passionate conversations among colleagues who care about the supply chain industry. I learned a bit during the Global Summit and intend to document some of that in this blog. As the reader will note, some of the insights were more general in nature than the topic of the blog will suggest.

One central theme that seemed popular was the acceptance that any and all projections about the supply chain of 2020 were very likely going to be wrong. The best case was made by Dr. Pankaj Ghemawat, the keynote speaker on day one, who reminded the room that we had been asked to imagine the supply chain of 2015 in 2005 (a very similar lag). Looking back, I realized many of us would have failed miserably. Who could have imagined the world with Facebook, iPhones, 3D printing, Uber or AirBnB in it? He specifically mentioned the example of re-shoring of manufacturing. At some time in the last decade, reshoring became a hot topic. However, he pointed

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Using Coefficient of Variation as a Guide for Safety Stocks

In one of my previous posts, I wrote about using coefficient of variation (CV) as a predictor of forecastability. In this post, I will talk about how it can be used to indicate a sensitivity of lead time towards the safety stock calculations.

To quickly remind the reader first: The formula for CV = StdDev (σ) / Mean (µ)

And the formula for (cycle) safety stock is: (more detailed description here)

Where zSL represents a multiplier based on the specified service level. For a discussion on service levels, see my two part blog post (part 1 and part 2).

The Variance is square of the standard deviation (Variance = σ2).

E represents the expected value. In most cases, one assumes the expected value to be the average or the mean. However, if a business has an active forecasting process, the expected value of the demand can be the forecast and the Variance of demand can be calculated using the forecast error.

I can never remember this formula, so I always think of it like this:


Where the first term has to do with the variation in demand over the average lead time and the second term

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Cycle Service Level Versus Fill Rate Service Level – Part Two

Last post, I discussed in some detail the concept of cycle service level and how it works in the retail or a B2C environment. This week, let me take up the case of a business in a B2B environment. Typically, in a B2B environment, the orders are placed in bulk over the phone or the web. The customer typically is another business requiring large amounts of products to feed into their production process. An order is also usually made of multiple line items where the customer asks for multiple products on the same order.

Very often in a B2B environment, there is also a qualification process for the supplier to go through before they can sell the product to the customer. The qualification can be quality and volume related. There is also the idea of a business relationship where the two companies have done business with each other for a long time. There is often room for some negotiation when the order arrives because of pre-existing business relationships. For example, it might be possible to negotiate a later delivery date or split the delivery into two parts, with the first part delivered fairly quickly to keep the customer going and

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Cycle Service Level Versus Fill Rate Service Level – Part One

Most businesses would put high customer service as one of their top business priorities. While there are many different things that make up the overall customer experience, one of the key performance indicators (KPIs) that companies measure is the timely delivery of goods to the customer. In safety stock calculations, this is typically an input called the service level. In this blog post, I will explore this a bit.

Imagine a B2C business such as a retailer. The store shelves at this business are re-stocked every night without fail. They are never re-stocked during the day. The customers can walk into the store any time, walk up to the appropriate shelf and pick up the products that they want. Every night, delivery trucks from the original manufacturers show up to re-stock the shelf in what is often described as a direct store delivery (DSD) model.

In this situation, the product is unavailable to a customer whenever a shelf is empty. This is also called a stock out. When this happens, the customer either:

Buys a substitute product and all other products on his wish list. Buys all the other products on his wish list and then goes to another store

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So You’re The New Guy – Advice For A New Planner

Planning is an art. All planners deal with the daily firefighting while also looking into the future and cautiously calculating possible steps to combat all sorts of scenarios. But how do you plan for scenarios when you are new to a company? Every business is different and while there’s always demand and supply, the devil remains in the detail. Whether you are fresh out of university or just moving on to the next company here is some advice for you to shine in your new role.

During the first few days, drink coffee. No, I am not kidding. Drink coffee and possibly drink another coffee because you need to learn about your company and how it operates. Formal documents will get you started but the real ins and outs will most likely be shared with you on an informal basis. Is there a better place for an informal conversation than right there at the coffee machine? I don’t think so.

While you ingest a gallon or two of coffee, make sure people get to know you. Introduce yourself and ask the mix of people that you meet about what they think has impacted operations recently and what might happen in

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Are You Using Stories To Your Advantage In Your Supply Chain Planning Process?

Humans love stories and learn best from examples. Behavior scientists have even given a name to this common practice: Narrative Bias. In simple terms, the human brains understands and retains facts much better if there is a story binding them together. This concept has been talked about by many authors in many different contexts and then there is this:

“Because suppose you eschew gossip and just say Mr. Smith is in love with his wife. Why that disposes the Smiths as a topic of conversation for the rest of their life, But suppose you say with a smile, that poor little Mrs. Smith thinks her husband is in love with her, he must be very clever, Why then you can enjoyably talk about the Smiths forever.”

- by Ogden Nash (I have it on good authority.)

The poet is recommending the inserting of a naughty narrative to make the Smiths more interesting as a topic of conversation! And in most cases, I suspect he is right.

My colleagues and I have attended many supply chain meetings where the decision process is weighed heavily by an anecdote or two. I do not have a statistic on it,

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The Emergence of Global Markets with Regional Characteristics

In preparation for the Supply Chain Insights Global Summit, Lora Cecere spoke with Sujit Singh, Chief Operating Officer of Arkieva, in an episode of Straight Talk with Supply Chain Insights.

With two to three podcast a week, Straight Talk is designed to benefit the supply chain leader that is on the go and wants to be in the know. This specific podcast in part of a larger series leading up to the Global Summit and discusses the future of supply chain, particularly as it relates to S&OP and their global impact. Below is a brief excerpt of their discussion.

Lora Cecere: As you look at the supply chain of the future what do you think it looks like in 2020 and 2025? Can you give us your view?

Sujit Singh: Well certainly I can try. When you say supply chain of the future I am glad you include 2025 because 2020 is not that far anymore.

The way I see the market place evolving is that the pressures we see today will continue to get more intense. They will increase in complexity. It is obvious that there will be an increase in risk in the supply chains of the world.

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Is Your S&OP Glass Half-Full Or Half-Empty?

I recently watched a TED talk video by Alison Ledgerwood on YouTube. In the video, Alison gives the example of her paper getting accepted for publication (positive news) and another one getting rejected for publication (negative news). She talks about how it takes longer to recover from (i.e., go back to being her normal self) a piece of negative news as compared to a piece of positive news. While she makes a lot of good points in the video (and I do recommend that you watch it), here is what stuck with me.

The glass-is-half-full (positive thinking) is the “gain frame”. When things are positioned this way, the listeners: Take a positive view of what you are describing Are able to switch to the loss frame when new information is presented The glass-is-half-empty (negative thinking) is the “loss frame”. When things are positioned this way, the listeners: Take a negative view of what you are describing Have difficulty switching to the gain frame when new information is presented

Further, she provided a simple example where users had to do simple math to convert from one frame to another. While the math was exactly the same, it took 11 seconds to

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