Looking Back: August 1997

That was 25 years ago! I cannot believe how quickly time has passed.

This post is continuing the sequence that began with Looking Back: October 7, 2017 (about SmartOps and NAE),  followed by Looking Back: March 31, 1991 (about The Matrix).

What triggered this stream of thought is the patio work we are getting done, and the contractor came to ask me where he could park the Backhoe and Skid Steer Loaders – and I have not thought about those machines for many years, having first encountered them when I was asked by Caterpillar to design a new rapid-response supply chain for them as they were launching a new line of products (called P2000 ).

This led to a nice Operations Research paper and a very consequential Fortune article.

Why consequential? Because it was this Fortune article that made Deere contact me (just as I was flying out to Paris, en route to Supply Chain Thought Leaders Conference, that I wrote about in Casablanca, Corsendonk, Como) in:

August 2001.

I still so enjoy reading this excerpt (see The Art (and Craft) of OM for IPA):

Among the techniques the Carnegie-Mellon group used to attack this complex problem was so-called infinitesimal perturbation analysis, for which no complete explanation is possible for the faint-hearted or mathematically disadvantaged.

The “CMU group” was Alan Scheller-Wolf, Uday Rao and myself. What attracted the attention of Deere was:

…the Carnegie-Mellon solutions are not what Cat would have come up with on its own. A couple of special tool-distribution centers, which the company had planned to build, were found unnecessary. Just as important, the response time in the system was sufficiently fast that the inventories that the dealers would have to carry were not high enough to require a subsidy from Caterpillar.… [Carnegie Mellon] gave us the highest response, lowest cost, lowest inventory [solution]…

August matters to me, not just because of 1997 and 2001. I came to the US in August 1986, joined CMU Tepper in August 1991, learned that I became INFORMS Fellow in August 2012, got my McLaren 570S in August 2018 ☺️ (you can read all about it in Ford v Ferrari), and, yes, my birthday – see When I was Young (written on the eve of my 55^th) – is also in August.

My relationship with Caterpillar lasted for more than a decade, as did my relationship with Deere, and beyond making important business impact, it also made me (and SmartOps) decent money, and resulted in many publications:

Caterpillar: Bundling, Pricing and Lane Strategy

Caterpillar: Operating a Global Supply Chain (Using Smartops EIO)

Deere: Reducing $1Billion of Inventory (Using SmartOps EIO)

Deere: Optimizing Product Portfolio

And my favorite, as it was under a 50-50 gain sharing agreement:

Deere: Seasonal Logistics.

To me, it was Academic Capitalism at its very funnest, and we ploughed through 9/11 (as I have written in Sketch of the Past, channeling a bit of Virginia Woolf).

It was also the month that I was driving to Boston to begin my sabbatical at MIT (hosted by Dimitris Bertsimas) to work on really academic stuff – Grobner Basis for Integer Programming, where we find weak duality for Integer Programming – that I have written about before in Having Fun.

This led to a nice Management Science paper, and more importantly, beginning of a new (and long!) friendship with Dimitris and Georgia Perakis, and many others at MIT, like Steve Graves and Larry Wein (now at Stanford). I wrote about my most recent visit to MIT, last fall, making new friends and catching up with old ones, in Back to the Future.

In August 1997:

Unlike Robert Frost, I took both roads!

Two roads diverged in a yellow wood,

And sorry I could not travel both

And be one traveler, long I stood

I shall be telling this with a sigh smile

Somewhere ages and ages hence:

Two roads diverged in a wood, and I—

I took the one less traveled by  them both

And that has made all the difference.

Quantum Information Science for Professionals.