How Accurate is the Criticism of Lokad DDMRP Video?

Executive Summary

• Lokad produced a video critiquing DDMRP.
• We check this Lokad video and how logical are DDMRP commenters on their critique of the video.

Introduction

I analyzed DDMRP in the article Repackaged Lean as DDMRP and concluded that it is not an improvement on MRP and is just repackaged Lean with a few tweaks. In this article, I review both the video and the critique of the video by Lokad on DDMRP.

Our References for This Article

If you want to see our references for this article and related Brightwork articles, see this link.

Disclosure

I have to state that I have had aggressive debates with Chad Smith and Carol Ptak – the Demand Driven Institute leaders or DDI and various DDMRP devotees. I have also been on the receiving end of a large number of personal attacks from DDMRP proponents. The intent appears to be to censor those that oppose DDMRP or that are unconvinced by DDMRP. This is somewhat similar to debates with Six Sigma proponents but dialed up a few notches.

I read comments by Chad Smith and other DDMRP proponents on a video filmed by Lokad (Lokad is a software vendor). And I found similarities that I thought it would be insightful to note between the comments on the video on YouTube and my debates with the DDMRP crowd.

The starting point, of course, is reviewing the Lokad DDMRP video.

The Lokad Video

The following video consists of Joannes Vermorel of Lokad being interviewed on the topic of DDMRP.

The DDI leaders like Chad Smith have a severe inability to have DDMRP critiqued. This is a comment from Chad Smith on the DDMRP video produced by Lokad. 

This video suffers from the same assumption that has been plaguing industry for decades – that increasing environmental complexity can only be combated by the application of more complexity. Many times in life we must walk a fine line between oversimplification and overcomplication – both create less than desirable effects for systems. DDMRP is a package that sits right in the middle. But it needs to be understood that DDMRP is only the beginning and not the end of a journey. DDMRP is intuitive for people and, at least for the time being, people still run supply chains. When people don’t understand or don’t trust the system, they begin to work around it. Applying more complexity to the system will only exacerbate that lack of understanding or distrust. Joannes seems to not understand that DDMRP is simply a starting point and the supply order generation and management aspect of a larger framework.(emphasis added) Thus, he is significantly under-representing the ability to use appropriate and focused advanced mathematical tools in the tactical and strategic side of the Demand Driven Adaptive Enterprise Model. Joannes also misses the point that DDMRP is a package that is greater than the sum of its parts. By only comparing a part at a time Joannes fails to understand or address how the components work together to produce a result.(emphasis added) This linear comparative approach is ironic given the author’s emphasis on complex mathematics and systems. Now, let’s talk real world – check out the case studies of companies across a wide array of industries that are winning big with DDMRP in a fairly quick fashion: https://www.demanddriveninstitute.com/case-studies. Additionally, you will find research projects from organizations such as the Massachusetts Institute of Technology (MIT) that find DDMRP is highly effective: https://www.demanddriveninstitute.com/research

Our Analysis

This is textbook Chad Smith. Everyone but those that support DDMRP is to be disregarded.

Notice in the highlighted green portion of the quote, Chad Smith states that DDMRP is a starting point. So DDMRP is not a complete method but is a starting point? Is there a forthcoming book called DDMRP: The Rest of It?

If a person can say that critics don’t understand a method because the technique is not released in its entirety — and it is a “starting point,” that makes the hypothesis untestable. Furthermore, Chad Smith is always claiming the superiority of DDMRP over MRP. So is DDMRP superior in its current form, or is it just a “starting point?” A person cannot be accused of not understanding something if you write several books on a topic but then state that the issue being analyzed is just a starting point.

Notice in the highlighted orange portion of the quote, Chad Smith states that Joannes Vermorel of Lokad should not be trying to decompose the different components of DDMRP and analyzing them one by one. You cannot talk about everything at once when analyzing any system. Decomposition is a fundamental part of the analytical process. Any item will not have a series of problematic components or components with faulty assumptions and a positive outcome.

For example, we are analyzing a car, and

1. The car has an underpowered engine for the purpose or weight of the car.
2. The car has poor quality tires, a steering wheel that is too small — that car will not have a positive outcome in performance.

If we move the analogy to a baseball team, it would mean that the individual players’ analysis is not a legitimate avenue of analysis — because the team must be analyzed only as a functioning unit.

However, how is such an analysis even possible?

It would mean not mentioning the contributions of each of the individual players — their strengths and weaknesses. While teamwork or how the components work together is essential, the best teams also comprise excellent players. The integrated nature of the elements and the individual components are valid avenues of analysis.

If Joannes Vermorel were to follow Chad Smith’s advice, he would not analyze DDMRP because the discussion of any one component would open him up to the criticism that he should not be talking about that one component.

This is not a fair critique of Joannes Vermorel’s analysis. It sets an impossible expectation that is nonsensical and not applied to any other item that is analyzed.

The fact that Chad Smith can demand that your items cannot be decomposed into its constituent partsise disabling to analysis. It is an enormous red flag regarding the logical foundation of the person (Chad Smith) making this claim.

I can only conclude one of two things:

1. Either the person in question has deeply flawed logical processes.
2. Or is gaslighting Joannes Vermorel a type of false argumentation?

I can decompose any method used in demand, supply, or production planning into its constituent parts. And the ability to decompose a topic is one of the hallmarks of a person who fully understands a topic.

At the end of the quote, Chad Smith calls now “let’s talk real world” is where he pivots to a master’s thesis by two people who appeared to have little work experience in planning. Chad Smith is aggressive in censoring any view that he does not like. He tends to want criticism of DDMRP to be taken “offline” so that it never finds itself in a published form. Naturally, if you bring your criticism to Chad “offline,” then, of course, he will convince you the criticism is not correct. On an offline conversation, he uses his ability to create a fast “personal relationship” to try to get the critic not to publish their criticisms. But if you take one of these conversations but then continue to critique DDMRP, he takes it personally.

Overall, through Chad Smith’s behavior, DDI has demonstrated a strong need to limit critiques of DDMRP, which I see as a problem and inappropriate. In any method used, one should be free to critique that method — without having some central authority that states this criticism is inappropriate. For instance, one wants to critique statistical forecasting or machine learning (like the Statistical Forecasting Institute or the Machine Learning Institute). There is not a “central” body that seeks to quelch criticism of these areas.

The Cult of DDMRP?

DDI intends to create some cult around DDMRP. And part of this is based on both inaccurate criticisms of MRP and exaggerated statements around DDMRP. Its members repeat DDMRP assertions without thinking very deeply about what they are asserting.

Here is a second comment from another proponent of DDMRP on the same video.

So Lokad, a competitor in the Supply Chain tools space, makes a “webisode” or “podcast” that completely bags on a competitor, and calls it fact? This is just drivel. What a ridiculously pompous spokesperson. I am sure they are just jealous that SAP adopted DDMRP and not Lokad’s “QUANTITATIVE SUPPLY CHAIN OPTIMIZATION SOFTWARE ” So because DDMRP doesn’t use the buzz words of “machine learning,” “AI,” or the other SC buzz words, they are crap?

Come on man!

All I heard at the Gartner SC Exec. conference a few weeks ago was a consistent message of these buzzwords. Nobody has a clue how to leverage these, but theyll happily sell them to you! Keep it up DDMRP. You guys are awesome. I can’t get my company to bite, yet, but we are getting there. (emphasis added)

Lokad, you should spend some time in the world. I work implementing ERP and SC solutions, and you wouldn’t believe how many businesses, throughout the world, don’t even use ANY automated planning tools. MRP, DDMRP, APS, nothing. They manually plan each order individually. Most of these businesses have NO S&OP process that is linked to SC or even an S&OP process at all. No Forecasting process. They plan each order manually and have the overstock inventory and bad working capital metrics to prove it. (emphasis added) ” – Mike Bradshaw

Our Analysis

The fact that Lokad sees DDMRP as a competitor is not that easy to see. Furthermore, Brightwork is not a competitor with DDMRP, and we share a similar view of DDMRP as Joannes Vermorel of Lokad, except we are more critical of the DDMRP method.

Second, the fact that SAP adopted DDMRP is not evidence that DDMRP works. We cover SAP extensively as one of the only analyst/research entities that cover SAP but is not paid by SAP (SAP pays Gartner and Forrester and IDC, and many others). And we can say with confidence that SAP does not care what is true. We rank them along with Oracle as the two least trustworthy vendors in the enterprise software space, as we cover in the article How to Understand the Honest Vendor Ratings – SAP.

SAP will adopt any approach that has a market interest. Mike Bradshaw critiques machine learning and AI. We cover how SAP’s IBP product is a buzzword adoption machine in the article How SAP IBP, aka “Zoolander,” is Going All in on Trendy. However, Mike Bradshaw does not observe that DDMRP is just another trendy term they think they can use to get more application sales. That is, while Mike Bradshaw lauds SAP for adopting DDMRP and then praises DDMRP for not using buzzword or trendy items like machine learning, what Mike Bradshaw misses is that SAP has aggressively adopted machine learning and AI. So if the adoption of DDMRP by SAP is evidence of the legitimacy of DDMRP, what do SAP’s even greater adoption of machine learning and AI?

According to Mike Bradshaw’s logic, this must mean that these methods are now also legitimized. The standard of evidence is if SAP adopts something.

If Mike Bradshaw knew SAP’s broader marketing and even how SAP IBP application — which is directly in the same software category as DDMRP, he would not have made that observation and conclusion.

The middle part of the quote, highlighted in orange, might be true but has nothing to do with Joannes Vermorel of Lokad’s critique of DDMRP. At Brightwork, we are probably the best-known critic of Gartner, and we have the most material on how Gartner functions to deceive its clients. However, whether Gartner understands something (for instance, in this article, we cover how Gartner failed to analyze SAP HANA How Gartner Got HANA So Wrong) is not a defense of a critique of DDMRP.

And the latter part of the comment, which I have highlighted in green, where Mike states that many companies don’t use any automated planning tool, does not have anything to do with Lokad’s critique of DDMRP. I also highly doubt that Joannes Vermorel of Lokad does not know this. This means that roughly 1/2 of the quote has nothing to do with the Lokad video’s content.

This would be like finishing off a critique of the video by talking about the composition of the linebackers that play for the Green Bay Packers. It may be an accurate representation of their players — but it is not related to anything.

The Pattern of DDMRP Responses to Criticism

These comments follow a pattern of doing the following to critics of DDMRP.

1. Proposing that the person does not “understand” DDMRP.
2. Personally attacking the person criticizing DDMRP.

This last comment is quite rude. However, these types of comments are endorsed by DDI.

How do I know this?

I had one DDMRP proponent write a rude response to one of my comments. Carol Ptak promptly liked this comment. Carol Ptak is the second most prominent member of DDI.

This and my online debates with Chad Smith routinely ignore the underhanded behavior of DDMRP followers. This indicates that both Chad Smith and Carol Ptak want DDMRP followers to make rude and ad hominem statements against DDMRP critics while staying a bit above it all. In these debates, Chad Smith tends to puts himself in the position of the master of ceremonies — and likes to “mediate” discussions on DDMRP. This mediation takes the form of critiquing the DDMRP critic while pretending to be neutral. He gives me advice on how I should and should not answer comments. As I write this, I am 50 years old, but with DDMRP debates, I pick up a new parent I never knew I needed how Chad Smith could even claim to be a neutral party when he is one of the chief proponents of DDMRP as its co-originator is very odd.

Conclusion

I found the explanation of DDMRP and its weaknesses by Joannes Vermorel to be roughly in line with my analysis of DDMRP. The one area where I would depart with Joannes is with his proposal that advanced planning methods are desirable versus MRP. The primary reason I say this is that the history of advanced planning methods is poor. And I say this as a long-time consultant in advanced planning who up until a decade ago generally thought of MRP as “below me.” Starting my advanced planning career, I had close to no interest in MRP and only wrote articles on it when I was asked. At that time, I recall saying to people.

“Why am I writing articles on MRP?”

Most companies that attempt to implement advanced planning methods tend to fail. And some of the planning methods, like cost optimization, are presented misleadingly as to their technical merits, and their underlying logic and fit to the environment.

Secondly, both vendors and consulting companies that have promoted these advanced methods have aggressively understated the maintenance and effort required to keep such systems operating functionally. I worked for one, i2 Technologies, that lied unceasingly about their optimizers’ capabilities — and as an independent consultant for SAP APO, where SAP and SAP consulting firms did the same.

The arguments made against Joannes Vermorel’s analysis/critique of DDMRP by Chad Smith and Mike Bradshaw — did not make any sense, and many of them were contradictory. They also fell into a pattern I have seen with DDMRP of attempting to question the understanding of DDMRP and attempting to censor those that would critique DDMRP.