The Missing Links. Caroline Mondon
principle that no one ever wants to hear. Since a forecast is always wrong, you have to use a margin of uncertainty— that is to say, you build a best-case/worst-case scenario. Then as you go along the rolling planning horizon, and get more information from the market, you can refine this margin of uncertainty. Planning ahead to guide the company in taking appropriate risks is the salesman’s most important task.”
“I see. It’s just like when Thomas must predict how full the concert hall will be for the duration of a tour when a big part of it depends on the weather.”
“Exactly. So for the Catamer product line, taking into account our quality problems, the variability of the forecast should be increased from 5 to 30 percent. For the Collectivité line, once schools are back in session, they want us to deliver the same product again and again. We call this ‘replenishment.’ The variability— provided of course that we stick to the deadlines—is small; I’d say 10 percent. Now, for the Boutique product line, we’ll have to choose our battles. In my opinion, the variability will be 20 percent. So, with these new assumptions of variability in mind, I’ve looked at the forecasts I made for all of these lines at the beginning of the year and I updated them.”
Héloïse looks at the numbers, and then grabs a calculator.
“If we multiply the sales figures in the budget for each of the product lines, considering the variability of each,” Héloïse murmurs as she calculates, “we get a forecast of global sales figures of around €2 million, give or take 9.5 percent. But if we take your new assumptions of variability of the forecast into account it becomes €2 million, give or take 22 percent. This obviously isn’t the same thing at all. If I understand correctly, you need to anticipate the best decisions to make, based on both an optimistic scenario and a pessimistic one. This way, you are not taken by surprise.” Héloïse slowly takes in the enormous strategic importance of the calculations she has made.
Hubert looks on in admiration. “Exactly. And these scenarios don’t lead to the same operations-management decisions. With a 10 percent margin of uncertainty, you can add overtime hours or introduce flexible work hours easily. But with 22 percent, you’ll need to either subcontract the work or to lay off extra workers. You see, if your planning horizon isn’t far enough, you won’t have enough time to anticipate these decisions.” He looks at the numbers. “Things really aren’t so bad for this year, since we luckily have three-quarters of the orders planned for the year in our backlog already. We really only have to recalculate our sales forecasts with the new margin of uncertainty for the last four months of the year. And, for next year, the best thing to do would be to use a planning horizon of eighteen months, so that our annual budget could be based on it.”
He thinks for a moment, and then adds, “This is what we should be considering at our monthly S&OP meetings, like the one we had last Monday. We not only need to do these calculations but anticipate their impact on our own resources and on our suppliers’ resources when we consider the different scenarios. That’s what Thierry is supposed to do.” He pushes the papers aside. “What did you decide with your mother and grandmother, if it’s not too indiscreet to ask?”
“No question concerning the company is too indiscreet for you to ask,” Héloïse answers without hesitation. “I’ve decided to take care of the company while looking for a buyer, as if Thierry Ambi won’t be coming back. I’m going to need everyone’s support, but especially yours. The month-ends are going to be difficult.”
Hubert smiles unreservedly. “You know you can count on me, Héloïse. I’ve always been loyal. And I’m not the only one. You’ll see.”
1 From Philip B. Crosby, an American consultant in total quality.
2 From Pierre Pasquet, founder of l’équipage de vénerie d’Amboise (the hunting team of Amboise, in France).
3 From Leonardo da Vinci, an Italian artist, philosopher, and engineer.
PIERRE PLAYS TOTAL-QUALITY DETECTIVE
Color-Coding Clarifies Non-value-added Flows
BY THE TIME HÉLOÏSE calls Pierre, the retired policeman, he has already been brought up to date by Juliette. He would be only too happy to meet Héloïse. He remembers her perfectly from a wedding in Bretagne some twenty years before, when the whole extended family had come together. He had found her to be quite smart and had been enchanted by her big blue eyes as she sang so beautifully with the other children. His opinion of her was confirmed later in the afternoon when the ten children disappeared, causing panic among the parents. It was he who had questioned the wait staff, before finding the children hiding behind some straw bales in a neighbor’s barn. Héloïse had explained to him that she was looking for the bride’s treasure, and that she had sworn her companions to secrecy.
“If I hadn’t, the treasure would have disappeared,” the young Héloïse explained.
“And why is that?”
“Because you’ll only find it if you believe in it ... and the grown-ups don’t believe in hidden treasures.”
At that time, Pierre had just been promoted to the vice squad and was about to leave his native region of Touraine to live in Paris. This promotion had finally opened the door to the career he had dreamed of. It also meant waiting before he would be able to have children with his young wife. He knew that raising a child properly would be difficult to reconcile with working as a detective. He had promised his wife he would learn the most he could in Paris in two or three years and then apply for a transfer to a quiet police station in a provincial town so that they could raise their children together. He would regret this decision for the rest of his life.
Soon after their move, his wife was assaulted one night on her way home from work. She died two weeks later, but not before having described her attackers to Pierre. They were young hoodlums who had all the characteristics of the typical delinquents of the posh western suburbs of Paris.
Pierre had launched his own investigation, but never found them. What he found instead was how difficult it was to make inquiries in bourgeois circles where people felt themselves to be above the law. He began to specialize more and more in police work that involved so-called “decent” society and ultimately was transferred to the financial-crimes sector. His multiple skills in both vice and financial crime, along with his ability to blend into almost any surroundings, brought him no small measure of success. “There’s an awful lot of money in the dirty laundry that rich families clean in the machines of their enterprises,” he would often say when describing his work to others. Pierre had gained an enviable reputation after many spectacular successes and almost as many cases where the truth could not be revealed for political reasons.
But for some months now, as the time for retirement had come up, he felt sick with a lack of fulfillment. Day after day he paced the floor of the two-room Paris apartment he had lived in for the past twenty years. Juliette’s phone call, full of contradictions and strange details, was intriguing to this man so used to the world of business dealings. It lifted his spirits. What if he pursued his mission, as a private detective, using the techniques he learned in large companies to the benefit of a small business?
He betrayed no hint of his excitement to Héloïse when she called, however, for he had learned to hide his personal feelings behind a veil of professional disinterest.
It is exactly noon when Pierre parks his immaculate car in the oval courtyard of the restaurant—a