Nassim Nicholas Taleb on Accepting Uncertainty, Embracing Volatility - Knowledge@Wharton

Nassim Nicholas Taleb on Accepting Uncertainty, Embracing Volatility - Knowledge@Wharton

No New Hires; No Replacements

From time to time corporate management will put such a restriction on a division that is performing poorly. This policy is actually not that unusual in industry. But, does it make sense? Could it be this policy that makes it impossible for the business to survive? The feeling in the targeted business might be that the policy is just the first step before it will be shutdown. If this is the feeling, won’t it cause employees to jump ship in search of greener pastures? Is there a better way?

 

The Goal

A company’s goal is to make money. A corporation that supports a business with insufficient profitability will feel that such a business is draining a lot of energy from management to try and deal with the problem. If the lack of profitability persists there will eventually come an ultimatum – something like, “Please don’t ask for more resources until you have shown proven positive bottom line results.” Fair enough? I think it is fair, although I also believe there is a better way to motivate the business and properly support it when it does hit the resource wall. (When it hits that wall the business cannot produce any more sales and the only remaining hope will be to reduce cost wherever excess exists – a very demoralizing tactic.) The Goal will seem to recede into the distance, impossible to meet it. At this point employees are quite likely to jump ship – especially those with that alternative.

The Approach for Success

The business in trouble needs a way to focus so that it gets the absolute maximum Throughput possible. (Throughput is meant as the money they generate through sales). To do this they have no choice but to find and then exploit their limiting factor to its absolute maximum. This means the limiting factor should work 24/7 and it should produce only the most lucrative products. The rest of the organisation makes sure that not a single minute of the limiting factor (the constraint) is wasted by a work stoppage or through the production of a low value product. What the paragraph above describes the first three steps of the 5 focusing steps for continual improvement.

1. Find the constraint (the limiting factor). The limiting factor is key … if its limiting results, then we must use it well.
   
   Many times a company will believe there are many constraints throughout their production process. This is in reality not possible. The impression of many constraints or constraints that move from one place to another are the result of the way the production process is managed. The policies that control how production is managed are very often the source of ‘many constraints’.
   
   To find the real constraint, operate with smaller batches and look for the operation before which work piles up and must wait. The real constraint is usually immediately after the pile of waiting work. 
2. Now that we know where and what our constraint or limiting factor is, we need to decide how to get the most from the limiting factor. Only if we can get this maximum can we expect our business to maximize its results.
   
   What this means is not only to maximize the output of the limiting factor, but the constraint must also be used effectively – it should produce those items that produce the greatest Throughput (sales less materials cost) with the least amount of constraint effort. That maximizes the result.
   
   There may be products that do not require the constraint resource – they give the highest amount of Throughput of all since they require zero from the limiting factor (as long as Throughput is positive. Decide to maximize sales of these products. 
3. We have decided how we want to exploit (get the maximum from) the limiting factor. How should the rest of the organisation behave?
   
   All of the rest of the organisation, including senior management, should subordinate to the limiting factor – even if this means their efficiency will suffer. If any other resource seeks to optimize his or her efficiency and in doing so hurts the limiting factor then the business as a whole suffers – the bottom line and all employees!
   
   Subordinate starts with management. Management sets targets and Key Performance Indicators for the business and functions within the business. This usually a good thing, but must be done with the decision how to exploit the constraint in mind. Resources (being good people) will seek to reach their targets. If targets and KPIs are set incorrectly they will inadvertently harm business Throughput.
   
   In the discussion of the exploit decision we recommended the production and sale of items that do not require the constraint. This tactic must be monitored carefully since too much of it can cause the constraint to be starved of work … a feeding resource is working on a product that does not pass through the limiting factor. 

These first 3 focusing steps are an excellent framework but they must not be used blindly. The business must continue to think and reflect about the consequences of its actions … focused especially the consequences for the limiting factor.

The advantage of these three steps is the focus on the limiting factor. The 3 steps give a logical framework to the corporate policy “No new hires, no replacements”. They help the business successfully achieve the desired outcome of more profit from existing resources. In fact followed correctly they will by themselves prevent new hires or replacements or investment in equipment until no more Throughput can be wrung from the limiting factor. (These 3 focusing steps should be used in every business in order to prevent unnecessary investment in additional resources until these are truly necessary. The focusing steps should be in continual use.

Many times the decision to exploit and the actions taken to subordinate cause the constraint to move – the business has a new limiting factor. The business must identify the new constraint; decide how to exploit it and how the rest of the organisation should subordinate to it. Care must be taken to do this correctly … the initially identified constraint may not have so much spare capacity.

 

The Value of One Hour

Previously we recommended focus on the limiting factor in order to maximize Throughput. How much is an hour at the limiting factor worth?

Assuming a month has 30 days of 24 hours (our operation runs around the clock) then there is an absolute maximum of 720 hours. Clearly some of these hours are not productive as resources (machines) must be maintained or if they are people there are very few than work 100% of the time during an 8-hour shift. For the purposes of this experiment lets assume 100 hours are currently not productive for one reason or another … so net we are using our resource for 620 hours every 30-day month.

The resource of interest is our limiting factor … it currently is the limiting factor in our production that results in 10 million€ turnover. If materials are 38% of sales, then Throughput is 6.2 million€ and 1 hour of constraint time produces 10000€ Throughput. Every additional hour we are able to utilize our limiting factor produces 10000€ to the bottom line … additional profit! If the business is able to utilize the limiting factor for an additional 50 hours, that means an extra .5 million€ to the bottom line. That is an extra 5% of return on sales.

Utilizing a non-constraint an extra hour has a negative effect on the business unless the constraint can use the extra material. Otherwise utilizing a non-constraint for more than capability of the constraint simply increases work in process and increases lead times (Little’s Law).

It does make sense to utilize a non-constraint for extra hours; if the time is used to produce products that do not have to go through the limiting factor. Such hours are also very valuable since every € of Throughput goes straight to the bottom line.

 

The Limiting Factor can do no More; What Then?

The fourth focusing step is, “Elevate the Constraint” – expand the constraint’s capacity in some way … through overtime, outsourcing, adding resources etc. The step is the correct action if the limiting factor (constraint) truly has been exploited to the maximum and no more subordination steps are possible. Management’s job is to understand where the organisation stands – they should allow an expansion only at the correct time.

The value of elevating the constraint or limiting factor is enormous (as long as the market will actually buy the additional products).

If the constraining resource is 10 people responsible for 10 million€ sales then adding just 1 person should allow the business to grow from 10 to 11 million€ sales. This 1 extra person would generate 1 million€ in sales, and 600’000€ in additional Throughput and profit (of course I assume the rest of the operation can handle the extra 10% load).

An extra employee in any other area adds only cost. The added person cannot add to the bottom line because the limiting factor is running at its capacity. Such an added person adds no value.

The rule, no new hires and no replacements gets seriously in the way at this point – especially if even outsourcing, over-time and the like are not possible. The business is blocked from progress until the capacity of the limiting factor can be increased. Management needs to seriously consider this fact as well as the time it might take to train an additional constraint resource.

A corporation may not want to hire additional people into a poorly performing division. But if this division is now blocked by the limiting factor and the type of resource necessary at the constraint can easily be placed elsewhere; then the question is why not expand the capacity of the limiting factor? It would seem to make eminent sense.

There may be pressure to reduce costs in areas other than the limiting factor. This might be OK as long as the capacity of all other resources remains sufficiently larger than that of the constraint – there needs to be sufficient protective capacity. Also, consider that employees in operations generally represent just a small percentage of the total fixed costs … less than 10% and often much less. Cost in modern businesses lies in overheads. If overhead costs are reduced care must be taken to not take away essential support for proper exploitation of the limiting factor.

 

When to Allow Expansion

The Focusing Steps define when expansion should be allowed … whenever the exploit and subordinate steps are successfully and completely implemented. The limiting factor is at its limit and only an expansion of its capacity will lead to more Throughput (sales less materials cost).

However, people have two ways of thinking … fast and slow (see Daniel Kahneman's book "Thinking Fast and Slow"). We use our intuition and experience to come to conclusions quickly and possibly make a serious mistake. There could still be capability left in the organisation if only we would take the time (slow thinking) to go over all possible options to exploit the limiting factor better and/or subordinate to it better!

A recent experience demonstrated to me again; the truth of fast and slow thinking! The organisation believed it had reached the limit of what could be done with and for the constraint. However senior management stood by their no hire and no replacements policy. What happened next was amazing – the organisation found more ways to subordinate even more effectively to the limiting factor and some more capacity was found.

 

Protective Capacity

If a business in trouble follows the actions outlined above it will very soon be operating near the limit of its capacity – assuming the market buys its products. It is common knowledge that as an operation approaches capacity its flexibility and delivery reliability decline while lead-times extend. These three parameters are, however, extremely important in many competitive environments – flexibility, reliability and short lead-times help ensure the business wins orders. As these qualities deteriorate demand will decrease. A certain amount of protective capacity is essential to maintain these important parameters so that sales can continue to increase.

When the corporation considers their strategy and tactics for a particular (poorly performing) business they should include protective capacity in their considerations. Management can ignore protective capacity; the market will not ignore it. The market will soon realize flexibility, reliability and speed are deteriorating and will react accordingly. Demand will drop, price pressure will increase and all the good work to exploit the limiting factor can be undone. Why go to all the effort if a lack of protective capacity will undo the work?

Within the business all non-constraint resources have and must continue to have sufficient protective capacity to make sure the constraint can always be exploited to its maximum. There is a strong likelihood that the business will experience pressure to reduce costs wherever excess resources exist. Excess resources can be reduced, but the sufficient protective capacity must alwazs be available.

 

Summary

The 5 Focusing Steps process is an ideal replacement for the commonly applied rule “No New Hires and No Replacements”. Applied correctly it does the same thing as the rule I wish corporations would change. The difference is in the process when no further improvement from the limiting factor is possible. At that point the corporation should allow expansion at the constraint because of the high leverage found at this point. If the limiting factor cannot be expanded, then the business concerned may as well be shut down. No further significant improvement in the bottom line can be expected.

Management should, before they embark on an exercise to try and improve a business in trouble, decide at what point they will allow expansion (at the limiting factor) and this should be communicated to the organisation concerned. The proper exploitation of the constraint becomes the businesses first target. Management needs to be knowledgeable enough to recognise when the organisation has not yet squeezed the maximum from the limiting factor and when they must allow expansion – in the right place.

Following the 5 steps as described should, in the majority of cases result in 20-50% greater internal capability, that if it can be sold should bring most businesses in trouble to profitability! (20% greater internal capability represents 2million€ added sales and 1.2million€ to the bottom line (Throughput is assumed to be 60% of sales) (IF, and only IF you can sell the extra capability)!

If you are wondering, the 5th step is, "If during any previous step the constraint or limiting factor is broken during any of the previous steps, go back to step 1. BUT, DO NOT let your own inertia (fast thinking!) become the system's constraint!

Technorati Tags: Continual Improvement, Cost, Costing, Efficiency, Goldratt, Key Performance Indicator, KPI, Little's Law, Management, Shareholder Value Add, Supply Chain, SVA, Theory of Constraints, TOC, TQM, Value Chain

Dr. Eliyahu M. Goldratt Foundation 5K Run/Walk & Thinker's Run/Walk

I did it!
I had one sponsor (Michael Bork) who could not it, make plus me. My son came along to pick up the pieces (of me when I collapse).
We started off at 10:30AM at a too fast pace in sweltering heat (it was only 86 degrees F, felt like a lot more!) but beautiful blue sky. Anyway up the first steep pitch everything seemed fine until about 10 paces after the top of that … then i got the message to cool it a bit. Walking with my 21year old son was a bit too much for my almost 67 year old legs.
We made to the 1 hour mark right on schedule and kept on going - the longest steep part followed. We made it to the 2 hour point about 10 minutes late - I had to stop for my crams! 1 hour to go … in 50 minutes. Fortunately this part is easier and I think the 1 hour is way to generous. Anyway we had time to photograph the cows, some flowers and the view. Got there pin 2 hours and 54 minutes. Bloody cramps … could have been quicker. Guess I need to get in shape.
Hope all the people on the run in Chicago had fun too. I hope they all have a great conference.
Pictures from the walk:



























































 This how long it took!!!

Technorati Tags: Theory of Constraints, TOC

Dr. Eliyahu M. Goldratt Foundation 5K Run/Walk or Thinker's Run/Walk

To be sure I can actually make it up to the pass I tried it yesterday. Goal will be 3 hours on June 2nd.

Well I made it up, despite some leftover bits of snow (I walked up in sandals and got cold feet) ... just in 3 hours. So Google's estimate is generous.

Also had to walk down for an hour before my phone could find the network - so got quite a bit more exercise and thinking than i expected.

I am ready to perform on June 2nd!

Anyone coming???

It was NOT like this!!  (Geneva lakeside in February)

Rudi

Dr. Eliyahu M. Goldratt Foundation 5K Run/Walk & Thinker's Run/Walk

The event in Chicago is hosted by the Theory of Constraints International Certification Organization to benefit the Dr. Eliyahu M. Goldratt Foundation.
Following his untimely death in June 2011, the TOCICO set up the Dr. Eliyahu Goldratt Foundation. The goal of the foundation is to encourage and reward continued development of knowledge through fellowships in memory of Dr. Goldratt. These fellowships will be awarded for applied research that significantly enhances the TOC knowledge and will be funded by businesses and corporations.
The TOCICO will utilize the funds raised in this 5K Run/Walk to grant fellowships focused on the development and recognition of the next big ideas that upgrade the Theory of Constraints knowledge.
For more information on the Chicago event please click on the following link: http://www.runningguru.com/WebSite.asp?webSiteID=61

Rudi Burkhard’s Thinker's Run/Walk, June 2nd, 2012

for the Dr. Eliyahu M. Goldratt Foundation

Since I am unable to attend the TOCICO conference in Chicago I also cannot participate in the run/walk. To make up for this I am organizing my own walk near my home above beautiful Lake Geneva. This is an active thinker's walk - about 8 miles and 2400 feet to the col du Marchairuz.
Anyone that is or can be in the Geneva region is welcome to join me. From A to B is said to be 3 hours and 18 minutes; it is 13.8 km. and a 730 meter climb! There is a restaurant at the top. Below is a selection of photos from a previous walk! If you do wish to join me – please let me know. Your cost to participate is 30CHF plus your transportation to St. Oyens and from the Marchairuz and your living expenses. The 30CHF will all go to the foundation.
Here is the route to the col due Marchairuz and some photos from the route? Further info about hiking in the region: http://wanderland.myswitzerland.com/en/orte_detail.cfm?id=31345.  I hope this gets at least a few people to join me.




















At the Start in St. Oyens



















Still at the start in St. Oyens.

























About 2 hours from the Marcairuz.

























About 80 minutes to the Marchairuz from here. Nearby is a sinkhole that used to be a source of ice in the summer - before modern refrigerators.



















Next to the bear - water comes out of the cliff!

























60 minutes to go, My legs start to ache!



















The GOAL. Drinks and restaurant here! From here you can walk back down or get someone to pick you up!














The view from up there somewhere



















Another view … part way down where I usually get picked up. You can just barely see the Mont Blanc.
Technorati Tags: Goldratt, Theory of Constraints, TOC

“Shit Happens” Deal with It! - 3

Almost everyone desires security, the natural reaction is to forecast and plan. Still, even with the best laid plans “shit will still happen”! We live in a chaotic World and might as well get used to it. The question is how to deal with uncertainty – is it better forecasts, budgets and plans, or is it better strategies, tactics, procedures and algorithms to deal with “shit” when it does happen.

I choose better strategies and tactics to deal with the consequences of “shit”. I do not have a crystal ball so I know that I cannot forecast with any accuracy – so why waste my time fine tuning forecasts and plans?

About Cause and Effect analysis to gain competitive advantage (the beginning!)

 

What does all this mean for our Business?

Every business has many policies, rules, common practices (the way we do business around here), culture and key performance indicators that are the things that should result in good positive bottom line results, hopefully better than our competitors’ results. Look around the business World – in many industries (maybe yours too) market shares are almost ‘locked in’ (they barely change from year to year) indicating (this is a cause and effect supposition) that all competitors are more or less the equal … why should your competitors suffer the hassle of switching to your product … they would gain no advantage by working with you.

In most industries it is difficult to gain a product advantage. If you do achieve an advantage competitors will soon copy with something very much the equivalent. If competitors generally copy any product innovation very quickly then, the way we do business is a possible source of significant advantage possibly even with advantages competitors find difficult to copy. Could the way we do business within an industry be a profitable area for a company to seek a significant or decisive competitive advantage?

Given your business and the situation in your industry might a rigorous cause and effect analysis lead to the direction of a solution – the direction to growth, market share gains and (much) better profitability? Could we build solutions, validated with rigorous cause and effect analysis, that we can forecast will (not might) have a strong positive effect on our bottom line? (NB. Cause and Effect analysis and prediction is an integral part of the scientific method.)

Technorati Tags: Continual Improvement, Efficiency, Execution Management, Focus, Goldratt, Management, Product Development, Strategy and Tactics, SVA, Theory of Constraints, TOC, Value Chain

“Shit Happens” Deal with It! - 2

Almost everyone desires security, the natural reaction is to forecast and plan. Still, even with the best laid plans “shit will still happen”! We live in a chaotic World and might as well get used to it. The question is how to deal with uncertainty – is it better forecasts, budgets and plans, or is it better strategies, tactics, procedures and algorithms to deal with “shit” when it does happen.
I choose better strategies and tactics to deal with the consequences of “shit”. I do not have a crystal ball so I know that I cannot forecast with any accuracy – so why waste my time fine tuning forecasts and plans?

January 2009 – “Think Globally”

Dr. Goldratt’s short lecture can be found here: "Think Globally" It is about the assumptions companies made in January 2009 – forecast assumptions about future demand after reading and experiencing the start of the recession in December 2008 and after suffering a 50% drop in orders in that month.
I recommend you watch this short video as Goldratt takes you through his cause and effect analysis about the situation then. He showed that while orders had already declined by 50%, by May normal or almost normal demand levels would be back. If you listen carefully all the necessary information was available from the Internet and from common knowledge about how people and businessmen tend to react – so that the cause and effect analysis could be developed. The short lecture is a description of an electronic component manufacturer and their response to the recession in January 2009. I contend that we can do the same kind of analysis for any other market and any other situation – all we need is to learn how to develop rigorous cause and effect ‘trees’.
As it turned out at least 1 company followed the recommendations from the video, and therefore gained significant market share from their competitors in an otherwise tough market. Competitors responded as expected after the forecast of a deep recession and after experiencing a steep decline in demand.
Before we panic because newspapers and TV business forecast a deep recession or some other economic calamity, let us think the situation through, thoroughly check the available data and use rigorous cause and effect logic before we decide whether we really should panic. Maybe we should question news with a big “REALLY???”
If more business leaders would stop and consider their entire supply chain, then some of the panicky forecasts that sell newspaper and TV advertising may no longer become self-fulfilling prophecies. Our newspapers and the evening news relies on correlation and classification to describe what is going on the business and economic World – using historical ‘parallels’ often based on too little data and information to draw valid conclusions (conclusions may actually become valid because of the forecasts made; news-people create the self-fulfilling prophecies!). Statistics don’t lie, but the people that use them often do.
Try to think in a cause and effect way to decide – don’t trust the news … unless you are sure the analysis is truly valid because your source has developed a rigorous case and effect analysis. Do this and you will have information you can use profitably.

Discussion of Goldratt’s Lecture

The lecture’s content is of course interesting in itself, but look at the structure Goldratt has in his lecture – how he builds up to the conclusion that to lay-off people in January 2009 would be a major mistake (for the type of businesses discussed). Goldratt was a person that trained himself to ask the question: “Really?” when someone makes a (sweeping) statement like, “a recession (or maybe a depression) is coming”. He always sought to answer the question WHY does someone think so. Warren Buffet appears to be another such person that never relies on what others say, but much more on his powers of deduction – his ability to build the cause-effect relationships from what is known, what can be discovered and from life experience to come to what might be a quite different conclusion. If Buffett cannot understand it (like the dot.com boom) he will not invest.
Take a second look at the video and see if you can build the logical tree Goldratt developed for us.
I recommend that you look at some other literature that takes such a quite different approach to thinking. Malcolm Gladwells books question some commonly held beliefs about many different things … one I remember is intelligence … Asians are more intelligent than Whites; they are better at math than Whites. Certainly Asians as a group achieve higher test scores. However Gladwell concludes the Asian environment is much more conducive to learning than our Western learning culture. The way Asian languages encode numbers is much more logical and fast than our complicated way of counting. The Asians advantage comes from their environment and culture and not from any genetic advantage. (You may not agree with Gladwell, so build the cause and effect logic found in his books and attempt to find his faulty conclusion.)
If you look around the Internet, libraries etc. you will find a number of people (Steven Levitt and Freakonomics for instance) that offer different conclusions from those commonly held. Some are of these people are cranks; but some do have good valid conclusions. For us readers the important thing is to analyse what has been written … not just does the information correlate with what we ‘know’ but are the cause and effect links valid?










'Shit Happens"


Technorati Tags: 6-Sigma, Continual Improvement, Efficiency, Focus, Key Performance Indicator, KPI, Sales, Theory of Constraints, TQM

“Shit Happens” Deal with It! - 1

Almost everyone desires security, the natural reaction is to forecast and plan. Still, even with the best laid plans “shit will still happen”! We live in a chaotic World and might as well get used to it. The question is how to deal with uncertainty – is it better forecasts, budgets and plans, or is it better strategies, tactics, procedures and algorithms to deal with “shit” when it does happen.

I choose better strategies and tactics to deal with the consequences of “shit”. I do not have a crystal ball so I know that I cannot forecast with any accuracy – so why waste my time fine tuning forecasts and plans?

The Past is what is wrong with Forecasts

We simply have not enough of a clue about the future – we have no knowledge of what is really going to happen. Every forecast I have ever seen is an assumption about the future – most often this assumption is some sort of extrapolation (very often linear) made from the past. Extrapolation in some form or another occurs whether or not a person or a computer makes the forecast – it is the only way most of us know how to visualize the future. After all we have to base our forecast on some sort of information and assumptions.

In my career I have seen interesting situations that demonstrate the unreliability of our forecasting and planning capabilities (as long as the future looks like the past forecasts will be Ok – when something jolts the economy (even just a little bit) accuracy goes out the window.

• I was responsible for a type of Nylon for hosiery that had a superb texture and feel to it, but it was significantly more expensive than other, conventional, nylons. This, rather superb, product was not selling well around the World and my sales area was no exception. Based on forecasts we would never make any money with it. Management decided to get out of the business – starting with my market; told me to get out of the market – stop selling the product.As sales manager for the region the best way I knew to cut demand was to increase price dramatically. So I doubled it. What happened next was a surprise … demand increased! Doubling the price did not work, so I did it again. Demand continued to increase and at this new price the product became very profitable. What I had done – quite accidentally – was to create a luxury product.Our forecast based on historical demand and therefore our business plan indicated the best we could was to get out of the market. As it turned out, we did not understand our (customers’) market and by total accident created a success. The lesson I learned was to be ready for surprises, and when they happen take advantage of them.
• Later on I was manager of another business and had the good fortune to have two excellent years of growth in sales and profit. It was budget time near the end of the second year and my sales forecast was due. From what my gut was telling me (I could not prove it and extrapolation of the trend showed continued growth) sales in the following year would at best match what we had just achieved. Well the computer’s projection out of the past indicated my business would grow again. In the end my gut lost to the computer’s forecast – management ‘talked me into’ a growth forecast (despite the knowledge that our industry was operating at close to capacity). Reality showed that my gut (which I could not explain well) was the much more accurate forecast. (NB. In this case my gut was correct, but could just as well been way off with the computer’s gut delivering the better, more appropriate, forecast.We don’t know which forecast will be correct – what we need are tools and processes to react to reality correctly.
• A long time ago double knit polyester fabrics were all the rage – they were cheap and did the job. Every year we made new 5-year forecasts always showing that the dramatic increases in sales would not continue – demand would be flat the following year. Well, it was not – the same fantastic growth went on for more than 5-years. After a number of years of forecasting too low, we learned – this market was growing at a fantastic rate and we had better forecast and plan capacity accordingly. So we extrapolated from history – which by that time looked like almost vertical exponential growth … so you can imagine what our latest 5-year forecast looked like.That was the year growth went from almost exponential to flat and then decline! Clearly using history was a big mistake!

The lesson from this and many other such stories is not that we should stop making plans. We must, however, recognize the fallibility of our plans and therefore the need to build processes and tools that help us respond correctly to surprises in either direction.

The story that follows should speak to many of us. It takes place in January 2009 soon after the recession started.

 

 

 

 

 

 

 

 

Technorati Tags: 6-Sigma, Continual Improvement, Efficiency, Execution Management, Focus, Goldratt, Key Performance Indicator, KPI, Management, Production, Replenishment, Sales, Supply Chain