The Hero’s Journey and Optimization: Following UPS on the Road to Epic Savings and Improvement. Part 3.

Tuesday, January 4, 2022

How can you replicate the hero’s journey in your organization? Here are three steps.

1. Search for the Unique Value Activities (UVAs).

Examine parts of core business activities--such as scheduling, planning, routing, and assigning--where experts make repetitive decisions of high consequence. You will often see them working outside of the core IT system, using data from emails, phone calls, meetings, and their own memories. In fact, whenever you see the organization’s “Jedi knight” of Excel spreadsheets, I would posit there is a UVA right there. When experts can’t use the core IT systems because they have to marshal their work in Excel, that is a strong possibility there is a UVA.

2. Determine the percent optimal of the status quo.

Ask, “How close are we to achieving the best possible?” To compute this, collect samples of past decisions. Build a prototype optimization model and run the same circumstances through it. Compare the past against the theoretical best and compute the percent optimal.

Just like Jack Levis at UPS, rather than doing this in a lab, an ivory tower, or a corporate headquarters, make sure you are out in the field interacting with real experts. Evaluate with them your model's plan, schedule, and route. The experts will tell you what doesn't work and why.

3. Quantify the size of the prize.

Fix your model again and again until at some point you can calculate the size of the prize. If you can achieve a better result, what exact amount would it be worth? What would it be worth to attain perfection? Ask, “For every percent improvement, what does that mean for our bottom line? What does that mean for our organization?” Using this technique like Jack Levis, you can find the next big game changer for your organization—and for your career.

Parting Thoughts

Most of us have been using KPIs that haven’t changed much in years, even decades. Percent optimal is interesting because it is leveraging AI to create a new KPI. You can’t calculate percent optimal without AI. I mean that percent optimal presents the situation, such as one driver on one day, and then evaluates every possible combination of stops for that driver, in every possible order. For each possible option, score it, and keep shuffling to find the best possible option that could have been selected. With percent optimal, you can quantify what perfection would have been if you’d had nearly an infinite amount of time to juggle all the possibilities. You can quantify what percent of that perfection you are achieving. 

My colleagues and I would sincerely love to hear about your "hero’s journey” wherever you are in the story, and to help in any way we can. Email me to set up a call!