Hi, Great to have you here.  Today, am concerned particularly about the Rational Thinking Versus Emotional Thinking in the daily life of the supply chain manager. What are the risks when emotions overrule the rational ? How rational & emotional Logics can both play Key Roles In supply chain decision making ? Why our emotions can be more rational than we think ? … Wajih Guennoun

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IQ VS EQ

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Hi,
Great to have you here. Today, am concerned particularly about the
Rational Thinking Versus Emotional Thinking in the daily life of the supply
chain manager. What are the risks when emotions overrule the rational ?
How rational & emotional Logics can both play Key Roles In supply chain
decision making ? Why our emotions can be more rational than we think ?
…
Wajih Guennoun
IQ VS EQ IN
SUPPLY CHAIN
MANAGEMENT

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ABOUT ME
My name is Wajih Guennoun, and I
enjoy going beyond the rational logic to
understand the emotional human side,
to understand how the daily human
mood can affect the results and how to
switch it to drive positively the
organization.
This said, I have years of experience in
Supply chain & logistics management,
through which I have got some
convictions that am sharing here
.
Still all what follows are only my
opinions and probably not a general
facts. Then I invite you to share your
own ones.
WAJIH GUENNOUN
Supply Chain & Logistics expert

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I cannot teach anybody
anything. I can only
make them think - Socrates

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Everything you hear is an
opinion, not a fact - Marcus Aurelius.

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WHY BEING
CUSTOMER
ORIENTED
MATTERS
AND WHY IT IS
MORE EMOTIONAL
THAN RATIONNAL

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HOW MUCH DO YOU
BELIEVE THAT THE
CUSTOMER IS ALWAYS
RIGHT ?

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WHO ARE
YOUR
CUSTOMERS ?

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MARKETING &
SALES
NATURAL BEHAVIOR
‒High revenues
‒Many disruptions
‒High inventory
SKILLS
‒Excellent Communicators
‒ Creative
‒ Analytical

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PRODUCTION
OPERATIONS
NATURAL BEHAVIOR
‒Low production change
‒Low service level
‒High inventory
SKILLS
‒People management skills
‒Persuasive & influencer
‒Emotional & non analytical

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FINANCE
NATURAL BEHAVIOR
‒Low production cost
‒Low inventory
‒Low service level
SKILLS
‒Excellent analytical skills
‒Excellent communicators
‒High level business knowledge

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NATURAL
SILO’S
WORKPLACE
BEHAVIOR
What are the risks of bad
communication within the
organisation ?

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Goods
value
DO YOU KNOW
YOUR
CUSTOMER
CULTURE ?
AERONAUTIC
Quality Inventory LeadTime Network

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Goods
value
DO YOU KNOW
YOUR
CUSTOMER
CULTURE ?
AUTOMOTIVE
Quality Inventory LeadTime Network

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DO YOU KNOW
YOUR
CUSTOMER
CULTURE ?
FMCG
Goods
value
Quality Inventory LeadTime Network

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We all need people who
will give us feedback.
That’s how we improve - Bill Gates

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WALK IN YOUR
CUSTOMER
SHOES
How do you apply a win win
problem solving.
Can you describe a day in life
of your customer?
Do you know what keeps them
up at night? Do you know their
needs?
3
1
2

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ASSESSING
PERFORMANCE
FOR
IMPROVEMENT
Don’t “Run” Without Targets
SAMBC – Service as measured
by the customer
create a feedback culture. For
both positive and negative ones
3
1
2
18

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WHAT IF THE CUSTOMER ASKS FOR THE
MOON?

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WHY BEING CUSTOMER
ORIENTED MATTERS
MOST AND WHY IT IS
MORE EMOTIONAL
Who are your internal/External
customers ? describe their
behavior?
What are Operations, Finance,
Marketing Mindsets ?
How to walk in your customer shoes ? Do you
accept feedbacks ?
Have you heard « The
customer is always right » ?
1
2
3
4
An example of customer oriented
phylosophie
5

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HOW MASTERING
SUPPLY CHAIN
PLANNING IS LIFE
CHANGING
AND WHY IT IS
MORE RATIONAL
THAN EMOTIONAL

23. We have shortages everywhere and especially on promotional products, it
is impossible to reach our sales target if we do not have all the products
available.
SALES MANAGER
You are not supposed to sell only promotions, You have to sell the other
products as well, by selling the promotional products you only create stock
with no real impact on the final customer.
SUPPLY CHAIN
MANAGER

24. Shortages again & again... how come we are discovering that now...
production is now stopped and people have nothing to do .... We are losing
money ...
PRODUCTION
MANAGER
It is not a supply chain issue, but the supplier is blocking deliveries until finance
proceed with the payment
SUPPLY CHAIN
MANAGER

25. Yesterday you said everything is fine we will face no shortage, now product is
not available… I can’t trust you anymore
SALES MANAGER
You shouldn’t use the word shortage, you had an allocated volume and you
consumed everything.
SUPPLY CHAIN
MANAGER

26. STOP the production, I have no more space were to put finished products
WAREHOUSE
MANAGER
We need sales to explain how come sales are not in line with the forecast?
SUPPLY CHAIN
MANAGER

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To reach the source one
must swim against the
tide

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CAN WE
ANTICIPATE
EVERYTHING ?
Get to the source
LEV. 2
LEV. 1
FACT
LEV. 3
Product shortages and
availability issue
Sales target not acheived
Stock unbalanced in the
market, Sales focus on
promotional product,
Forecast error, Finance
payment
WHY
WHY
ANALYSIS

29. Are you Upstream Or Downstream
Demand
Operations
Store Supply Cust. Service
Planning
1 2 3 4

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What is a total lead time from order to delivery ?
How to deal with
complex supply
chain and still
make planning ?
What happens if one site is having delay ?
What is the impact if you deliver by airfreight ?
How can we reduce the total Leadtime & why is it so
important in Aero?

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If the final site misses a sale, all the supply chain
misses it.
What is sales and
what is not sales?
Experiencing an end month peak impact
There is no sales, but only replenishment with cash
constraint
How demand planning might impact all the SC? And
what is the emotional reaction behind?

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Shaping your
demand
3 Pallets 7 pallets 15 pallets 30 pallets
Transport Cost
per pallet ($)
1800 1500 1300 900
Category 1 73% 23% 4% 0%
Category 2 64% 32% 4% 0%
Category 3 39% 54% 7% 0%
Category 4 5% 20% 25% 50%
Category 5 0% 8% 18% 74%
3 Pallets 7 pallets 15 pallets 30 pallets
Category 1 20% 80%
Category 2 20% 80%
Category 3 20% 80%
Category 4 20% 80%
Category 5 20% 80%
An FMCG company is wondering about how to drive the
demand in order to match with logistics constraints.
Below the structure of the network based on different
plants depending on the category of the product, (with
small capacity for storage) and one distribution center.
The fleet offers different capacities, depending on the
size of the customer order to be shipped.

33. RetailDistributionManufacturing
Raw Material
Supply
FMCG
Customer
Final assembly
Site 3
Sub assembly
Site 2
Sub Assembly
Site 1
Raw material
supply
Aircraft
Supply
Chain
Comparing supply chains
Forecast not accurate
Short cycle time
High Service level
Reactivity
Low uncertainty
Long cycle time
Minimizing cost
Planning resources

34. How to synchronize all the organisation
o Final production site has to satisfy the final customer need, and each site has to satisfy his customer’s
o 100% matching between supplier plan and customer expectations
oThe master schedule allow to synchronize every resource in the organization
WichitaBelfastMoroccoBelfastSuppliers
X
cycles
X
cycles
x
cycles
X
cycles
Customer
Finis
h
Star
t
Finis
h
Star
t
Finis
h
Star
t
Finis
h
Star
t
Finis
h
Star
t

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MATCHING
DEMAND / SUPPLY / CAPACITY / BUDGET
Sales and operations planning
SUPPLY
CAPACITY
INVENTORY
BUDGETDEMAND

36. Sales
Forecast
Supply
validation
Pré
S&OP
Demand
planning
S&O
P
Gather Data on past
sales, Analyse Trends
and report forecasts
Validate forecasts,
understand sources of
demand, account for
variability, revise
inventory
Asses the ability to meet
demand by reviewing
available capacity and
scheduling required
operations
Match supply and
demand plans with
financial considerations
(impact considerations)
Finalize the plan and
release it to
implementation
Forecast accuracy
System Data Accuracy
Inventory level
MAIN MISSION
o Leading Plant S&OP and Synchronizing demand and supply capacity
o Analyze forecasted demand & maintaining statistical models
o Optimizing inventory (WIP & in transit)
o Assuring organization Adherence to the plan
o Long term requirement for the Organization scenario analysis
PROCESS – S&OP PROCESS
KPIs

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Myth #3: “S&OP is too rigid. It won’t
work for us because our business
changes too quickly.”
Myth #2: “We’ll never get S&OP to
work – we don’t have enough
teamwork.”
Myth #1 “We don’t need S&OP in our
department, that’s a “supply chain
thing.”
SALES AND
OPERATING
PLANNING
Myths

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What It Really Costs to
Launch a …?

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How mastering supply
chain planning is life
changing and why it so
rational ? How to deal with complex supply
chain and still make planning ?
How pull vs push strategy impacts
your supply chain planning ?
If we can’t fit into the demand, can we
shape the demand ?
Can we anticipate everything
? Should we accept all as
inputs ?
1
2
3
4
Do not make sure you have plan, but make
sure everybody follows the plan.
5

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LEADING AND
DRIVING THE
BUSINESS
AND WHY YOU
NEED BOTH IQ
AND EQ

41. Leadership and/or Management
QualitySupply chainproductionMethod
FinancePurchasingSalesMarketing

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To reach the source one
must swim against the
tide

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Tell me about a time
when you discovered a
problem and went beyond
regular expectations to fix
it.

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Tell me about how you
persuade people to
accept your point of view

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“I need to see you in my
office at 3 p.m.”
INFLUENCING
PEOPLE SOFTLY
“Can we prioritize the risks on your
project in my office at 3 p.m.?”

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What is the population of Turkey greater than
90 million?
What’s your best estimate of Turkey’s
population?
INFLUENCING
PEOPLE SOFTLY
Is the population of Turkey below than 150
million?
What’s your best estimate of Turkey’s
population?

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51. How to get the right information

52. Customer
Logistics
Finance
Purchasing
Quality
Sales
Marketing

53. CONNECT THE DOTS BY DRAWING FOUR STRAIGHT, CONTINUOUS LINES THAT PASS
THROUGH EACH OF THE NINE DOTS, AND NEVER LIFTING THE PENCIL FROM THE PAPER.

54. CONNECT THE DOTS BY DRAWING FOUR STRAIGHT, CONTINUOUS LINES THAT PASS
THROUGH EACH OF THE NINE DOTS, AND NEVER LIFTING THE PENCIL FROM THE PAPER.

55. CONNECT THE DOTS BY DRAWING FOUR STRAIGHT, CONTINUOUS LINES THAT PASS
THROUGH EACH OF THE NINE DOTS, AND NEVER LIFTING THE PENCIL FROM THE PAPER.

56. 56
Tell me when you had to
work with someone
difficult

57. 57
QUIZZ : IQ OR EQ ?

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69. THE SUPPLY CHAIN
EXPERIENCE
DAILY LIFE OF SUPPLY CHAIN MANAGER : CONNECTING RATIONAL BUSINESS PROCESS TO
HUMAN EXPERIENCE

70. “Win/Win is a frame of mind and heart that constantly seeks mutual benefit. With a
Win/Win solution, all parties feel good about the decision and feel committed to the
action plan.
Win/Win sees life as a cooperative, not a competitive arena”
-
Stephen Covey

71. About the beer Game
The origin of the supply chain game
The supply chain simulation, known as the
Beergame, was originally invented in the
1960s at MIT. While the original goal of the
simulation game was to research the effect
of systems structures on the behaviour of
people, the game can be used to
demonstrate the benefits of information
sharing, supply chain management, and
eCollaboration in the supply chain.

72. Congratulation
You are the new supply chain manager
You have been chosen among hundreds to
assure supply of goods and materials right
he way to customers. And because you are
the best, you have committed to the
shareholders that the company financials
will improve by meeting customer demand
while reducing stocks

73. How it works
What is the optimal strategy
Each item in stock costs 0.5 $ per week and
each item on backlog costs 1 $ per week.
Thus the primary aim of each sub group is
to keep their costs low.
Hence the optimal strategy is to run their
business with as little stock as possible
without being forced to move into
backorder.
Players are not allowed to communicate.
The only information allowed to
communicate is the order amount.

74. Get ready for the game
Create your teams
Create at least 2 supply chains . Each one
will have to satisfy his custmer demand
based on the below MOQ.
Min order quantities are as below
Factory : MOQ = 15
Wholesaler MOQ = 10
Distributor MOQ = 5
Retailer MOQ = 1

75. Let’s start the game
Get the teams ready
1- get the order from customer
2- Deliver and satisfy the demand
3-place an order to your supplier
Track and fill on weekly basis your
playsheet
- inventory
- backlog
- order placed
Delay
Distributor
Outgo
ing
order
Incom
ing
order
Incom
ing
delive
ry
Outgo
ing
delive
ry
Wholesa
ler
Factory
Delay

76. How do you

80. PHYSICAL FLOW
INFORMATION FLOW
FINANCIAL FLOW
Moving up the supply chain from raw materials supplier to end-consumer, each supply chain participant has
greater observed variation in demand and thus greater need for safety stock. The effect is that variations are
amplified as one moves upstream in the supply chain.
Suppli
er
Yo
u
Distribut
or
Stor
e

81. A typical organization response would be to
find the guy in charge of the supply and blame
him.
But the game clearly demonstrates how
inappropriate this response is. The result is
the same for different supply chains.
WE HAVE TO CHANGE THE STRUCTURAL
SETUP

82. Demand forecasting
Many companies forecast demand by
looking at the past demands from their own
direct customers. Since each upstream
chain member sees fluctuations in demand
caused by the bullwhip effect from
downstream, that member orders
accordingly, creating further swings for the
upstream suppliers.
This can be addressed by providig access
to point of sales, VMI, or single control
replenishment

83. LeadTime
The longer the lead time is, the more
pronounced an order will be as an reaction
to an increase in forecasted demand
(especially in conjunction with updating the
safety stock levels, see above), which again
contributes to the bullwhip effect.
4 easy ways to reduce lead-time
Consolidate supply chain sources
Reduce complexity
Late stage differentiation

84. Batch strategy
Ordering full truck loads is cheaper then
ordering smaller amounts. Furthermore,
many suppliers offer volume discounts
when ordering larger amounts. Hence, there
is a certain incentive for individual players
to hold back orders and only place
aggregate orders. This behaviour however
aggravates the problem of demand
forecasting, because very little information
about actual demand is transported in such
batch orders
.And batch ordering, of course, contributes
directly to the bullwhip effect by

85. Even if each party acts “optimally” individually
the result is less than optimal for the whole supply chain”
Competition is now supply chain against supply chain and
Network against network

86. Wall mart!!!
Walmart’s success is partly due to the effective implementation of the
vendor-managed inventory model to stop the bullwhip effect trough the
supply chain.
In this model, suppliers access data from Walmart’s information system,
such as data on current inventory levels, sales.
Suppliers decide when to send additional goods to Walmart.

87. Your
Take away
“It is literally true that you can succeed best by
helping others to succeed”
-
Napoleon Hill

88. Human resources planning is about
setting the right working time, overtime,
temporary or not temporary, recruitment
plan, training policy, ...). Meanwhile,
Human resources planning should not
make us forget the operational
constraints.
HOW TO SET YOUR
HIRING STRATEGY
CASE
STUDY

89. CASE STUDY : SET YOUR HIRING
STRATEGY
An airline company is wondering about its hiring and training strategy (Agents) for the next year. Knowing
the planned flights & monthly forecast for the next year.
The stewarts / hostess / agents hired are always followed by a month of training during which the New
hires can not provide service on scheduled flights. This training is Assured by experienced agents. The
company's collective agreement stipulates that Each new hostess is taken care of by an experienced
hostess .
This support dispenses the experienced hostess of 100 Hours during the training month. Experienced
hostesses make a maximum of 150 flight hours per month. At the beginning of the month Of January, the
company employs 60 hostesses who are all experienced.

90. CASE STUDY : SET YOUR HIRING
STRATEGY
Forecast Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Total hours 8 000 9 000 10 500 11 300 10 800 10 200 9 000 11 000 8 000 9 000 11 000 8 000
The collective agreement in force makes it virtually impossible to dismiss cabin. Moreover, past
experience shows that each month about 5% of trained staff Leaves the company. The cost of an
experienced hostess is 4500 € per month. The cost of a hostess Training is € 2600 per month.
➔ We try to propose a policy of hiring and training hostesses for the 12 months to come up.

91. CASE STUDY : SET YOUR HIRING
STRATEGY

92. Planning / optimizing the production is a
very interesting task. Today, customers'
demands are complex in terms of
quality, flexibility, availability and
delivery time.
The diversity of products increases and
demand can fluctuate sharply. Then,
each material resource must be well
exploited.
CASE STUDY
HOW TO SET A
PRODUCTION PLANCASE
STUDY

93. CASE STUDY : SET A PRODUCTION PLAN
The company X is specialized in the production of heavy equipment. Monthly sales of product A are
described in the next table. This one Operates 8 hours a day under normal conditions.
We estimated that each employee in this workshop can assemble an average of 2 products A per 8 hour
period.
➔ You have been asked to build a hiring plan associated with Overtime GO/NO GO decision over the next
6 months
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
Forecast (units)
1 100 1 600 2 200 1 600 2 000 1 600

94. CASE STUDY : SET A PRODUCTION PLAN
The Company can increase production by having overtime worked. The Employees are paid 1170 € per
month for normal work and 11 € per hour additional. Existing regulations limit overtime to 64 Per person
per month. The Company can hire or fire staff. The costs of hiring and Dismissal of a worker are
respectively € 330 and € 450.
Collective convention Stipulates that the product A assembly workshop must employ at least 14 people.
Given its size, it is excluded that more than 20 people Employed in this workshop.
It is possible to store product A. The cost of storing a product A is Estimated at 9 € per month. It is
desired to permanently store a security stock of 200 product A.
Given the current situation, it is estimated that on 31 December 2002, the company Will employ 15 people
in the workshop and will have a security stock of 300 units

95. CASE STUDY : SET A PRODUCTION PLAN