5 reasons why Artificial Intelligence won’t take your Job

5 reasons why Artificial Intelligence won’t take your Job

Admit it! Everyone is talking about it and there are no doubts that AI is here to stay. So, what is gonna happen? First of all, calm down. AI is a great software achievement and at the same time, a massive opportunity.

Initially, let’s put aside all type of fantasies and science fiction. Overall, Artificial Intelligence is just code developed by people, yes humanoids! There are many cases where AI is making our lives much easier; self-driving cars, speech recognition, expert aviation systems, advanced healthcare decisions and so much more.

Apart from this, let’s focus on workforce. How will AI impact in future Supply Chain jobs? The following is a compilation of facts on why AI will not take your job …

▪ Time-saving does not mean work-saving

AI and Automation can amazingly optimize traditional Supply Chains. On the contrary, this does not mean less work. After all doing something faster it doesn’t implies to not have to do it, you’re just going to be time-efficient.

Additionally, an important part of Supply Chain workload is taken from ‘edge’ situations. Unexpected cases and scenarios which are hard to computarize and predict; even though if they were implemented, an expert decision-maker would be always needed.

▪ Supply Chain is not a standard business

Supply Chain is not a line of business. It’s a department or a dedicated section inside of an specific business. Compared with Aviation, Hi-tech and some others industries, Supply Chain standards are very poor. For instance, the way you measure Stockouts or Customer Service Level probably is not the same than your competitors, right?
This is a critical complexity. Supply Chains are well known for having thousand of different IT solutions in the market, but just a few of them (SAP, Oracle) use standard variables. Consequences? Harder implementations and almost impossible standarizations.

▪ Automation increase quality of time at work

Automation makes your life easier and it has a positive impact on jobs – who enjoys working on repititive and boring tasks? The average job tenure today is actually similar to how it was in 50s and 60s. Think about it. Evolution from Ford’s Mass production to the current Robo-assembly lines has incredibly maximize productivity! Nevertheless, thousands of workers and engineers are still needed.

2019 BMW 5 Series Production at BMW Plant Dingolfing

▪ Machine control is only the tip of the icerberg

To put it more simply, “garbage in, garbage out”. High-quality data is mission-critical. Give the wrong information to algorithms comes up with useless outcomes. Clearly Supply Chains have still a lot of work to do with data quality. The majority of the time is spent in ‘cleansing’ operations and consolidating data to feed a predictive system.

– check out this post to understand the importance of cleansing in Forecasting

Let’s take the model of stock markets; if algorithms where intelligent enough to predict the next momentum, for sure their owners will be rich.
However, the reality is quite different. Stock algorithms are owned by giant corporations (which are the only capable to afford the costs of maintaince), they are helpful to avoid losses and make pushes against the market by generating thousands of orders per second. But still algorithms can not predict next economic crisis.
Many of the information the use needs to be ‘filtered’ and cleansed by humans … don’t forget that in the end, the next big market decision is going to be taken by humanoids boards and CEOs.

▪ AI do not understand humans

Machines will never be able to fully understand us. And yes, you perfectly know the reason. Paradoxically, computers do not have feelings, however somehow they try to process them. AI will never logically accept why we trust one person more than other, because based in facts and data analysis we should not trust any other human.

“based in facts and data analysis we should not trust any other human …”


Just be sure that your AI is not in charge of your next Supplier selection or your next right-hand man. For sure, it will give you the most accurate ranking sort by hundreds of criterias, but the final decision should be yours.

Last but not least, I recommend you to have a look to the interesting Sascha Eder’s article about How Can We Eliminate Bias In Our Algorithms?


Advertisements

The Dark Side of the Forecast: How to Conquer it

The Dark Side of the Forecast: How to Conquer it

Following China Chang’e-4 mission landing on the far side of the Moon, let’s talk about the role of Forecast in business and more specifically in the Supply Chain.

Everyone needs a Forecast. Because living in a hyperconnected world means infinite access to data. In the blink of an eye, trillions of algorithms are translating information into statistics and estimating outcomes.

No matter which is your sector or your expertise. Any enterprise is capable of having a Forecast. Now, the question is: Do you know how to generate it?

During the past century, predicting the future was a tough mission where only fully-dedicated people were able to produce a decent projection.
At the present time, just by using costless technology (R, Excel, Phyton …) almost everyone can create a Forecast from a bunch of time series (data collected in a period of time).

“Just by using costless technology almost everyone can create a Forecast from a bunch of time series”

In the following 3 steps I’ll describe you a path to conquer the hardest parts of creating a Forecast:

First. Use a Baseline Forecast

What does this exactly means in simple english? A definition of Baseline could be “looking to the past and using the same outcome at similar conditions”. Overall, this technique consists into see what’s going to happen in the future based on what happened in the past.

Baselines are really useful in many aspects of life and not only business.
For example, check out Dr. Phil’s explanation on how to create a Baseline in order to catch when somebody is lying to you …


Amazing, right? After all, Baseline are a very reliable tool at the time to predict anything …

In Supply Chain, Demand Planning uses the Baseline which is generated from the Historical Sales of a product. Similarly to the Sargent Major case, the first thing to do is to ‘cleanse’ all the information we believe should not be included into the production of the Baseline.

For a Demand Planner, the way to detect “Real or False truth reactions” like in Sargent’s case, will come from:

  • Outliers detected by the algorithm chosen to generate a Forecast.
  • All the additional information that could impact on Past Demand, such as: Events, Discounts, Competitor behaviour, New Launches, etc. Collected from, Commercial, Marketing, Finance and other departments.

Second. Add Expert Insights

As a rule, many industries have adopted as the best-in-class approach, to introduce experts Adjustments into the Baseline before releasing the final version. Nevertheless, this approach is far from being fully accepted.

Please don’t misunderstand me… Expert Insights are a fundamental part of the Forecast, however it needs to be done with total transparency and avoiding risks (this could be a nice topic for a future post).

In contrast, among many other scientists, the famous psychologists Daniel Kahneman (2002 Nobel Prize in Economic Sciences) and Amos Tversky believes on the Base rate fallacy (and some other psychological theories) which strongly impacts in the individual decision-making of estimating the future.

Copyright – Kahneman, D. (2011). Thinking, fast and slow. London: Macmillan.

Third. Evolve To Consensus Forecast

So, How could you avoid biased forecasts? There is no quick fix.
The explanation is always in your Forecasting process.

Adjusting Baseline predictions must be a formal method based on rigorous analysis of all the potential reasons that could impact on future Sales. In other words, you need to fully understand the sources of any particular rationale to change the Forecast (optimistic or pessimistic).

The mission of a Consensus Forecast is to control the tendency to change the estimation for ‘unknown’ reasons (Gut feeling, intuitions, smell-test, 50/50…) which are hardly measurable. Ideally, in order to add value, we should be able to see in a monthly basis the Forecast of the following areas, including their Max. and Min.

  • Commercial. Unconstrained Expected Demand.
  • Supply Chain. Expected Sales constrained by Plant’s capacity.
  • Financial Forecast. Expected Selling based on Economic conditions.

In conclusion, if you are looking for better projections; Have a look to your Forecasting processes (are they good enough? do you have a benchmark?) and the most important one: Pay attention on How you’re feeding your Baselines (follow the advises above).

“Keep in mind that improving Forecast is not only a technology thing; Most of your Projections are undermined by the quality of your inputs”

 Happy 2019!

5 Mind blowing books you might give to yourself this Christmas

5 Mind blowing books you might give to yourself this Christmas

We live in a world of words. Spending most of the time on meetings, calls and presentations –  When was the last time you contemplated the content of your desk and shelves?

Let’s see if this sounds familiar to you … When you smell a book there is a kind of ‘magic’ which send you away from the reality for a moment; and once you have finished it, it becomes a treasure that somehow and in some point of your future life, it will find you at the correct time; exactly when you most need it. 

(1) Leaders Eat Last

Simon Sinek 2014. On his second book, after the success on ‘Start with Why’, Simon makes an extraordinary detailed  X-ray of What Means to be a Leader. His words are absolutely inspiring and the way he explains complex topics is refreshing. Reading this book will not only empower your leadership skills also it will help you understand how real Leaders think.

(2) Harvard Business School Confidential: Secrets of Success

Emily Chan 2009. First time I read this book I was analyzing tons of data and preparing a deck to C-suite for the first time. Whoever works in Consultancy will discover that each of the pages of this book are priceless. Emily explains very clearly in plain english the concepts studied in the prestigious HBS. After reading the whole text I ensure you that there will be a sea change on your career and the way you conceive the business.

(3) The Decision Book: Fifty Models for Strategic Thinking

Mikael Krogerus 2008. This is a reference handbook and his main purpose is to help you in the transition of a change; no matter you are a teacher, a professor, or a top manager. You will be confronted by the questions: How do I take the right decision? How can I change things? How can I work more efficiently? and so on. The models presented will make you THINK and even more, after this manual you will successfully plan almost everything in your life.

(4) Only the Paranoid Survive

Andrew S. Grove 1998. Written more than 20 years ago, his thesis still feels up-to-date. If there is a word to summarize Grove’s life as Intel CEO that would be ‘Inflection’. By following the business principle that everything will change, Andy teach us how to anticipate and to be prepared for any kind of disruption. It is a strong recommendation for everyone in management whether in high-tech or not.

(5) The Machine That Changed the World:
The Story of Lean Production

James P. Womack, Daniel T. Jones, Daniel Roos. 1990. “Machine” is probably one of the most fascinating cases of continuous Improvement in the modern capitalist history. From the groundbreaking Ford’s model of ‘Mass production’, the selective craftman production in Europe to finally the exemplary Efficient process of the Japanese company Toyota. Keep in mind that unlike other books, “Machine” is not a “how-to” manual, is the amazing consolidation of Facts and Stadistics on How Japanese production model revolutionized Automotive business Management.

Best wishes,

Top considerations for your Future SC Software Selection

Top considerations for your Future SC Software Selection

Technology provides capabilities to optimize the operational planning processes of a company. Traditional Supply Chain (SC) software has been widely adopted for a long time, however companies’ No. 1 supply chain priority is to go a step forward on improving its planning capabilities

Given growing SC Complexity and Volatility, it is becoming nearly impossible to revise a complete supply chain without using the latest technology.

Benjamin Nitsche –  SC Volatility Management

Key Functional Capabilities

Let’s imagine that you have a bunch of softwares in scope but it seems impossible to start your comparison.

First of all, focus on how the tools solve complex challenges. Have a look to the following list of key functional capabilities:

  1. Collaboration. External collaboration both with customers and vendors is becoming more common.
  2. Performance Monitoring and Analytics. Includes performance management, business intelligence, alerting, and advanced analytics.
  3. OptimizationBased on a discrete snapshot of reality. Most often applied to inventory and supply planning problems.
  4. Simulation / Scenario Planning. Used to support long-term S&OP or IBP, risk management, SC design, and tactical demand and supply problems.
  5. Scheduling. Resource allocation and operational planning.
  6. Response Management. How quick it reacts to volatility in demand, supply, and product to improve delivery service and operation efficiency.

Choosing a SC Software Vendor

As a good rule, I will recommend you to look for a Suite provider, this means that your vendor must have multifunction product software and your future tool will cover at least four of the functional areas within Supply Chain Planning:

  • Sales & Operations Planning (S&OP)
  • Supply & Replenishment Planning
  • Demand Planning and Forecasting (DP)
  • Vendor Managed Inventory (VMI)
  • Inventory Planning
  • Available to Promise (ATP)
  • Production Planning and Scheduling
  • Distribution Network Planning

Software Evaluation Criteria

In particular for software evaluation you will based your decision-making on the following criteria: Functionality, Technology Alignment, Viability, and Services.

What is more, Total Cost of Ownership (TCO) should be also consider as an important criteria which is separately dealt with using cost benefit analysis.

Functionality

Responsive planning, Optimization, SC design features, S&OP process maturity, Scheduling , Scenario planning / simulation, Advanced analytics, Scalability and speed, Functional roadmap and User interface.

Don’t infuence your decision in marketing and promises, go to the facts. Make your own analysis and visit the professionals on those companies that are using the current solution (see the vendor credentials) and ask them for their feedback, this is going to give you a real approach.

Technology Alignment

Exception and constraints handling, Integration with ERP, other SCP and legacy systems and Compatibility with custom/legacy systems.

Probably the most critical criteria for your IT department because in the future they will have to create interfaces and adapt all the internal reports and documents that your company is using in order to visualize them in the new tool.

Viability

Financial health, Strategic alliances, Availability of support by geography, Total footprint and solution maturity, Market adoption, Vendor direction and Industry specific focus … Not everyone take into account this point but is a very important one.

Nowadays technology companies are involved in many M&A so don’t be surprised that the tool you bought 5 years ago is no longer available and your vendor is not giving you any support because the new company which adquires the rights is not interested at all into maintain it … 

Total Cost of Ownership (TCO)

Total Cost of Ownership considering yearly feeds for all users and Maintenance (very important for future software updates) and support cost.

Finally remember that the real cost of a tool is not going to be only the ammount of zeros that you will pay, always keep in mind future developments and how much are they going to cost you …


Conclusions

To sum up I may say that every project is different, and each client has unique requirements …

Write about your past software experiences and note if there is a bias towards one application over another.

Analyze your environment, especially if your company is focus on one specific software vendor. Establish key project checkpoints … and design a document template in order to do your evaluations of all the points explained before.

Good luck!

How to start investing on Biopharma stocks | Quick Guide

How to start investing on Biopharma stocks | Quick Guide

[This is Part 1 of a series of posts about Investing in Biopharma/BioTech companies]

You have already heard and read comments about it, however you don’t know exactly where to start … we all have had the same feeling.

Biopharma and Biotech companies are not very accessible stocks to follow-up, in comparison with other huge industries which are everyday on the newspapers, such as: Consumer Goods (Nike, Unilever, P&G), Technology (Facebook, Google, Oracle) and so on. On the contrary, these stocks seem to be ‘hidden’ and only available to medical experts or the wall street guys.


Since that’s not true, here are some advises to speed up your searches and leverage your decision-making in order to get the most of your future Biopharma/Biotech investments.

Decide your Approach

First of all, take a view from 20,000 feet and choose your approach based on: (1) Time you’ll dedicate (2) Effort you’re able to commit, and (3) Level of knowledge. Whichever approach you choose, you’ll want to monitor your portfolio to ensure it’s on track with your goals.

Where to get information

As much as data you gather, the fastest you will start visualizing the type of disease and the profile of the pharma where you think it will worth to start investing.

I suggest you to make your own analysis – this part it will take the majority of the time, but believe me that is better than trust on ‘gurus’ and biased Analysts – so, take all the information available in the IR (Investor Relations) website and focus on the key events; News, Official announcements, Board changes… and real numbers, Financial and Incomes statements and Balance sheet.

“Don’t boil the ocean, once you have an idea of the company targets and vision, check the Pipeline and ongoing Clinical Trials, this is gonna be strongly linked to the future Earning Potential”


The most self-explanatory and concise information about the drug development process that I’ve ever seen is available in the Roche Youtube channel: 

Roche drug development process

Last but not least, there are some excellent online-tools where all this info has been collected and you can take advantage of it. A good example is Finviz where the data is shown in a quick and tidy manner.

Detail of Innovate Biopharmaceuticals, Inc. on Finviz.com

Start before you feel ready

 If you’re working on something important, then you’ll never feel ready. A side effect of doing challenging work is that you’re pulled by excitement and pushed by confusion at the same time

James Clear “Atomic habits” 

In order to demonstrate you can break with the above quotation, I recommend you to start right now researching about the following interesting pharma list of Nasdaq Penny Stocks:

 Innovate Biopharmaceuticals, Inc. (INNT), Arrowhead Pharmaceuticals, Inc. (ARWR), ArQule, Inc. (ARQL), Xenon Pharmaceuticals Inc. (XENE), Endocyte, Inc. (ECYT), Madrigal Pharmaceuticals, Inc. (MDGL), InVivo Therapeutics Holdings Corp. (NVIV), OHR Pharmaceutical, Inc. (OHRP), Edge Therapeutics, Inc. (EDGE), Aytu BioScience, Inc. (AYTU), Auris Medical Holding AG (EARS)

Stay Safe Stay Informed

In conclusion, stay tune and try to learn from the experience, below a bunch of useful websites that you will probably need.

Enjoy!

2018 CPhI worldwide at Madrid

2018 CPhI worldwide at Madrid

About CPhI

CPhI is an international brand where UBM (PharmExec, LCGC)  organizes the largest Pharmaceutical performances in terms of manufacturers’ number and companies involved.

UBM is now a part of Informa, the leading B2B Information Services group. This is an important consideration that I could say, the potential of a company with such an immense intangible knowledge is tremendous … (2017 FY results).

The Event

As the world’s largest pharma event, with over 45,000 attendees and 150 countries represented, CPhI is an organization that you shouldn’t miss.

The allocation of the categories, six at the same time (CPhI, InnoPack, P-MEC, iCSE, FDF and bioLIVE) was smart and allowed to everyone the free movement around them, however if it is your first time at IFEMA Madrid (+10 buildings), the first challenge will be completing the tour without getting lost.

My first thought was: I don’t know any of these companies’ names …

CPhI worldwide focused its attention mostly on manufacturers and suppliers of API and excipients from all around the world. My first thought was: I don’t know any of this companies’ names – taking into account that I was surrounded by Chinese and Indian CMOs – nevertheless after walking around, I finally recognized some of them and even we got involved in very interesting conversations.

The most visually-attractive areas were InnoPack and P-MEC, where Manufacturers are proud of showing their best machines and latest technology trends. This territory was well dominated by European brands a few asian companies (Japanese, Korean or Chinese).

  

Experience

The bottom line is oriented to sell and maximize your connections in order to expand your strategic business alliances, so in case you are interested in educative-content, I strongly recommend you to join any of the Pharma Insights, which are presentations where an invited company and speaker briefly share a viewpoint or project with a particular industry interest: Emerging Markets, Biologic drug products, Consumer trends, Serialization, Biotech support, Supply Chain, etc.

 

Conclusions

Pharmaceutical Industry’s innovation is something that believe it or not, you can feel it coming as a Formula E speed car (electric Formula 1); quiet and in a Breakneck (fast) speed

In fact, there are now more products in development than at any other point in history!

Talented CDMOs, API manufacturers, formulation specialists, generics producers and most recently, Biomanufacturers (large molecules) are completely changing the rules of the game and forcing regulators to a complete update.

I’ve detected a trend on all kind of pharmaceutical companies to break with its internal barriers among departments, in order to ensure innovation and creating smoother and more transparent operations …

Finally, from the Supply Chain perspective, topics like Continuous Manufacturing, the growing Contract Manufacturing Industry, Biopharmaceutical operations and many others related, are just the cherry on the cake of creating a leanest and more efficient network across the industry.

 

Supply Chain is like PGA campaign ‘Live under par’. Always under pressure of delivering excellence every week

 

What Can A Newborn Teach You About Supply Chain?

What Can A Newborn Teach You About Supply Chain?

After nine months of preparation, there you are, ready or not, she smiled at you and you smiled her back, then you know that everything is gonna be alright. Here is my compilation of learned lessons that my newborn has explained me about Babies Supply Chain.

Plan and Measure – Baby Dashboard

First of all, believe me that when you are in the middle of a crisis, the last thing you want to struggle with are spreadsheets or complex files. Therefore, it makes a lot of sense that any tool at Gemba (following Lean principles) should be clear and simple. In our case, my wife and I opted for using a whiteboard divided in two sections: Meals and Needs, so everyday we were writing down the hours and quantity of milk plus number of nappies used.

At the end of the week, it’s amazing the number of conclusions and decisions that you can make based on all the data collected

In conclusion, some of the first learnings were:
1. Forecast projection of number of nappies that we will need in the future months.
2. Correlation of sleep hours and regularity of naps against the quantity of feeds.
3. How external factors, such as: temperature (ºC), unwanted noise (dB) and unexpected events (relatives coming home); influenced in her cycles.

Balancing Supply & Demand – Nappies case

After doing a lot of research, the best approach for buying most of the Baby things is a economy of scale. In particular for nappies, there are several uncertainties that need to be taken into account. For example, Will X or Y brand irritate my baby’s butt? which size will she use? (weight of ultrasound is only an approximation), will X or Y brand be good enough? and so on and so on.

At the time of placing big orders, keep always in mind that you can mitigate potential damage in favor of potential gains

In principle, supermarkets and internet promotions are totally ‘unpredictable’ but don’t stress yourself, there is a certain pattern and seasonality (specially before summer) to get the best deals from each of them.

Maintaining a Safety Stock is crucial to cover the risks of Supply and Demand, and not as a level of inventory to be kept

Additionally, I excelled at the concept of Safety Stock, because maintaining a Nappy Safety Stock is crucial to cover the risks of Supply, i.e. your online order got late or promotions are not good enough to buy yet … and Demand risk, that happens when your forecast is inaccurate, which is very common when your baby suddenly starts pooping more often than before.

Just in time – Infant’s formula milk

In the case your baby needs infant’s milk, choosing the brand is a mission-critical decision. You are not going to change it unless there is a medical condition.

Here, your supplier sourcing selection should be very careful, in contrast than diapers, some formulas are not available in all the retailers and they are uniquely sold in specific drug stores.

As a result, you will have to identify very well the critical factors of your suppliers, some of the most important are as follows:

  • Capacity – Can I trust that online (Amazon) or local store (Carrefour) will have Stock enough?
  • Lead time – How long is going to take me to buy a new one since she/he finish the box?
  • Commitment to Quality – Very important when your baby starts eating solid food, then you will have to decide among Bio, Organic or Standard vegetables and fruits

As a rule, JIT strategy works very well with infant’s milk, essentially find out trusty Suppliers and do not keep big amounts of inventory – elimination of waste, because of the considerable costs and baby’s uncertainty

Last but not least, baby’s demand is a pull system and in many cases extremely difficult to predict, so if you don’t create any procedure to prevent you from getting out of formula (home-made Kanban) you will find yourself with no stock left to feed her – Is there any bigger pressure than that?

Conclusions

Having a baby is probably one of the biggest and hardest life’s experiences, so trying to stay positive is fundamental. Eventually I’ve been ironic in some of the experiences described before and most of the activities would have never been accomplished without my partner. Infinite thanks to my wife.

References:

  1. Lean systems: “The Machine that changed the world” James P Womack, Daniel T. Jones, Daniel Roos
  2. Dad university “What They Don’t Teach You In School”
  3. Economy of scale https://www.britannica.com/topic/economy-of-scale
  4. 10 Cs of Supplier Evaluation https://www.mindtools.com/pages/article/10-cs.htm
  5. JIT and Kanban systems https://www.toyota-global.com/company/vision_philosophy/toyota_production_system/just-in-time.html