Spencer Hansen 0:00:03.4: 

I'm Spencer Hansen, I'm the director of demand planning and supply chain analytics at doTERRA. Have you ever heard of doTERRA? We're an essential oils company that have a massive impact around the world with the essential oils that we sell, our health and wellness products. I've been there for a little over six years now. I actually got my start at doTERRA in data analytics. I was working in Tableau; I was doing sequel working with Snowflake, and really fell in love with the supply chain side of doTERRA because we have such a unique business case of what we do. In the sense that it is both… We have a vertically integrated supply chain where we are growing, we are harvesting, we are planting the actual lavender plants and the peppermint trees, or whatever they are, I'm not the actual guy, right? [Laughs] We're working with farmers to really tell our core impact story to make sure that we can sustainably source these gifts of the earth that we have that we use. It's a lot of planning there, that we have to, you know, the best date to plant the tree was ten years ago, but you've got to start today. We're planting these trees and plants, harvesting them, distilling our products, and just turning them into just world-class essential oils. Then on that side of it, too, we also have, we make our own products, we manufacture them in-house. 

 

Spencer Hansen 0:01:29.3:  

We also work with third-party manufacturers where we take those oils, and we infuse them into our supplements, or we infuse them into a wellness product like a greens powder or a fish oil or an omega supplement or something like that. We have a really diverse kind of platform utilizing the power of essential oils across all different wellness products, and it's just been a blast to be at doTERRA. I've loved my job, and I've really just kind of worked through data and then found myself as… I need your shirt, I'm a supply chain nerd through and through. 

 

E J Tavella 0:02:02:0: 

We'll get you one. Part of a giveaway. 

 

Spencer Hansen 0:02:07:5: 

That's why I signed up to do it, just for the shirt! 

 

E J Tavella 0:02:09:4: 

If anybody's interested, just come and talk to us. 

 

Spencer Hansen 0:02:12:7: 

That's right. Yes, that's been my journey at doTERRA, and it's just been a blast, especially this last, literally this last year that we've implemented Anaplan, and that's what we're here to talk about. 

 

E J Tavella 0:02:23:4: 

A game changer. I love it. I love the whole vertically integrated supply chain. For those of you that don't have the pleasure of that, it does add a whole other level of sophistication. You talk about how to do a seasonality in Anaplan, you have a totally different level of seasonality. Like, when is the plant blooming and… 

 

Spencer Hanson 0:02:41:3: 

Right, exactly. Like harvest season, if we want it, we can only get it one time a year. 

 

E J Tavella 0:02:48:3: 

It's really hard to level load the seasons. 

 

Spencer Hanson 0:02:49:6: 

[Chuckles] You got it. 

 

E J Tavella 0:02:50:0: 

Cool. Well, tell us a little bit… As you gave us a great little background, I think on it already, but maybe just share a little bit more of the complexity of the business. When you think about the planning processes, what drove you to decide that you actually needed to actually go and buy a new planning tool? 

 

Spencer Hanson 0:03:08:9: 

Yes, so doTERRA is definitely a story in history. We've been around for, I think, 15 or 16 years. Started out as just people who wanted to make a business or make a difference with essential oils. Had come from different companies and things like that, and had really wanted to tell a story with what doTERRA was doing. Really landed on this really philanthropic effort of our tagline now is that we help the world heal. We want to take these natural gifts of the earth, and that's what doTERRA means. It’s a gift of the earth, do and terra, we want to utilize this to help people. 

 

E J Tavella 0:03:37:2: 

If you'd [?pulled that 0:03:37.8] before, then I would have got the message. 

 

Spencer Hanson 0:03:46:6: 

[Laughs] That's right, we're missing the little line. 

 

E J Tavella 0:03:50:7: 

Exactly. 

 

Spencer Hanson 0:03:46:1: 

That's over there. Anyway, we have these really great products we've been selling for a long time, and we've experienced a really explosive growth over those 15 years. It was easy back when we were growing to plan because you just buy all of the things and they sell. You don't need a demand plan because the demand plan just needs to be this. 

 

E J Tavella 0:04:12:5: 

Yes, it's easy to buy when you sell what you make. 

 

Spencer Hanson 0:04:09:2: 

Yes, exactly. As our business started to level out, we started to make sure that we wanted to be more mature and we wanted to be more sustainable. We started thinking about, well, how can we sort of make that happen when my forecast isn't blind or it's just ten numbers long? I want to make a real forecast that we can support these products. We have, now we have about 8000 finished SKUs that we sell across the globe over about 30 markets. 

 

 E J Tavella 0:04:44:5: 

That's not simple. 

 

Spencer Hanson 0:04:44:6: 

No, not all, and that's basically doubled in the last five years that we've been doing business. We want to make sure that all these products that are unique have the right plan behind them. That we're also being responsible in what we work with our farmers and our partners, and everything like that. That we're not just planting plants to throw them away or something like that. We were kind of thinking about doing that, and then COVID-19 happened. It was just a big anomaly. For us, COVID-19 was actually a positive thing, it was really a great thing because everybody was stocking up on their doomsday oils for the end of the world. 

 

E J Tavella 0:05:29:0: 

They were home to enjoy those oils. 

 

Spencer Hanson 0:05:29:1: 

That's right, that's the right way, but no, we have a sanitizing mist and things like that. We saw really explosive growth again after COVID-19. 

 

E J Tavella 0:05:37:6: 

With personal care and mindfulness, it had become a bigger deal. 

 

Spencer Hanson 0:05:40:8: 

It was a big thing. After that, that peak didn't stay. It was, oh, okay, we were kind of thinking about that, but then it was back in the scramble mode because we were growing so much. Then it was like, okay, so now how do we level out? How do we make sure that we can be sustainable after that? That's kind of where, about three years ago or so, that I kind of entered into the demand planning world and the supply planning world. It was kind of after that; we were kind of looking at that. You'll see some graphs up here later, kind of looking at that impact. It was how is it that we're going to make this happen? How is it that we're effectively building a demand planning platform to manage the complexity of our supply chain? We had SAP, we still have SAP, but it was a really expensive calculator in all reality. We were using it, it wasn't really doing anything, and it wasn't that advanced planning capabilities. It was actually about two years, about a year ago, myself and another colleague we were tasked to figure out the next phase of technology. 

 

E J Tavella 0:06:48:2: 

This was the evaluation process. 

 

Spencer Hanson 0:06:51: 

Yes, that was the evaluation part. In December, we went to a Gartner Conference, and we realized we were woefully behind the curve in terms of technology. People weren't even asking the questions that we wished… Like, they were asking the questions we wished we could have asked, but they were too far ahead of us. That's where we kind of started and started thinking about, well, what should we do? We have SAP, we don't want to replace SAP, we still have some transactions, things like that, our business is built on it, but we need a way to not to plan in Excel anymore. To not plan in spreadsheets. I'd tried my best to build the coolest spreadsheet you've ever thought about, and it was pretty cool. [Laughter] It was not scalable in any way, shape, or form. It couldn't happen, and so we realized we needed something new. We started thinking about, oh, there's these advanced planning capabilities, let's start working and meeting with different people. We met with Anaplan, we met with a handful of different industry-leading partners that were out there and really landed on Anaplan for what it was that they had. Myself, coming from data, being a supply chainer, I wanted to get under the hood, into the nuts and bolts. I didn't want to just have some little box that people were saying, oh, yes, it's pretty good and you have come to talk to us. 

 

Spencer Hanson 0:08:09:1: 

We loved what Anaplan had to offer in terms of both there was accelerators that were there. You guys didn't have apps yet, but that would have been a big story back then. We wanted that flexibility to build it to make sure that our business could happen. That's where, basically, on this timeline here, May, we made the plunge in going with Anaplan. 

 

E J Tavella 0:08:33:6: 

Yes, jumped in. Okay, and then we've got a few slides to get into this, too, but tell us about the implementation. You spent six months evaluating, you spent four months implementing. 

 

Spencer Hanson 0:08:39:6: 

Yes. 

 

E J Tavella 0:08:43:5: 

Love that. 

 

Spencer Hanson 0:08:44:7: 

[Chuckles] That's only because internally we were slow. 

 

E J Tavella 0:08:48:0: 

It's always the running joke. Like, we're in such a hurry, we're in a huge hurry, and then they spend a year-and-a-half evaluating it, double checking, then it better go out in four months, no problem. You can do that with Anaplan. 

 

Spencer Hanson 0:08:58:4: 

That's right. 

 

E J Tavella 0:08:59:4: 

Tell us about the implementation and the adoption phase. What did that look like? What helped you build that fast? Look, I've done a lot of implementations, and Anaplan is very flexible and adaptable. Just from a change perspective and a data perspective, sixteen weeks is fast. 

 

Spencer Hanson 0:09:14:9: 

Oh yes, it was definitely fast, but we were ready for it. Luckily, like I said, we'd spent a lot of prep time beforehand, and we had spent a lot of time building out a really robust data warehouse inside of Snowflake, so we felt ready to diverge that data and that technology that was there. We didn't have to spend… That was part of the reason why implementation could be fast, it was because we felt ready from a data side, so that could happen. I'll have to make the plug, the Carter guys are here, we had an amazing implementation partner. Where are you? If you know them, Carter, right? We had an amazing implementation partner in helping us get there. Anaplan is amazing from a tool perspective, but it's like you can do anything, right? We needed to make sure that we were finding those best practices and we were leveraging the tool the right way. Really, our success and our speed that we've seen with Anaplan, I attribute so much to the Carter team. If you guys are looking or doing anything like that, there's my plug for them. They really are best in class. It was amazing. We met, we sat down and said, okay, these are the things we wanted to do. They appropriately cautioned us to not boil the ocean because we kind of wanted to. It was like, no, let's focus in on demand planning and supply planning, those seem to be your biggest problems, this is some of the capabilities we can do. 

 

Spencer Hanson 0:10:35:4: 

We just hit the ground running there. That's where it kind of went through the implementation phase. Then, luckily, because we had been ready and we had been prepped, from an adoption standpoint, internally, my demand planning and supply planning team they were ready to go. I had tortured them enough for the last two years that they were ready to burn the spreadsheets; they were ready to jump into a new platform that was Anaplan. We had a sprint week, two sprint weeks, where we locked ourselves in a room, we did training, we made sure that we cleaned up the forecast, we did all that different stuff. That was… Adoption internally was really easy for us, for my team, but we knew that one of the other challenges that was going to be out there was adoption for the rest of the company. As a supply chain, we're… 

 

E J Tavella 0:11:27:2: 

Extended collaborators. 

 

Spencer Hanson 0:11:29:5: 

Yes, exactly. We were out to make sure we were talking with our sourcing team, with our procurement team, with the product development team, with marketing, people like that. Sure, you guys know that we do the forecasting numbers, but how is this going to change? We actually took it on ourselves to do a roadshow where we put together some stuff, and it was just like, hey, this is what Anaplan is. 

 

E J Tavella 0:11:48:8: 

Love it. 

 

Spencer Hanson 0:11:48:8: 

This is what we can do, this is what's happening. We just met with the different stakeholders to just make sure they felt bought in. Even if they weren't necessarily in Anaplan, they were at least informed that they knew this change was coming, and hopefully was going to be for the better, it wasn't going to be for the worse. 

 

E J Tavella 0:12:05:1: 

I love this story, and we have a slide, I'm going to skip to it. I guess we're all in sales to some degree, right? I think with Spencer here, going on this roadshow, and this is the slide, or one of the slides, you were presenting internally to the team, not made for you guys, but share it with you guys. Like, here's what we're doing, this is why we're doing it, this is the impact. I think it's a great example of getting into the weeds and talking their language. You've hit on a lot, but with the engineering team and with the product team, how do I cycle planning, how do I phase in the new product, how do I manage those pieces? I think it's a great way to speak their language and get them on board to understand the value of doing it, right? 

 

Spencer Hanson 0:12:45:0: 

Absolutely, and that was one of the things that came out of this roadshow. We met with the product management team, and I don't know… Yes, it's this middle one here, where it's talking about this ability to link new and old transitioning products together. That was a big pain point for us at doTERRA. We had regular revving of product lifecycle changes, or there's a legal change or formula change or something like that, and so our changing SKUs. It was so hard to link that demand plan together, especially in an Excel-based model or even in SAP, there wasn't necessarily the capability that we had to do that. That was one of the biggest selling points that I remember talking… It was actually at this conference last year, sitting with I think our account rep and with the Carter folks, and just saying, oh man, you guys, we can do that in Anaplan, that's going to be amazing. That's going to be such a game changer for us to be able to link that together. I think as we met with the product development team, we showed that too, and they were like, wait, you guys can do that? Oh, we need to collaborate with you more to make sure that we can link up new products with you. 

 

Spencer Hanson 0:13:54:6: 

They're like, well, what happens if the SKU isn't set up in SAP yet? We were like, don't worry. 

 

E J Tavella 0:13:59:5: 

Yes, all the time. 

 

Spencer Hanson 0:13:59:7: 

There's a solution for that in Anaplan. We have a place order that we set up, you guys give us these basic dimensionality of what we need to do, we'll put that in, we'll create the plan in there and then when we're ready to go and set up an SAP, we do a little merge process, boom, it's off and running. 

 

E J Tavella 0:14:15:1: 

It's off and running. 

 

Spencer Hanson 0:14:15:3: 

Just sharing that piece, like even though that wasn't necessarily, they weren't responsible necessarily for creating the demand plan and managing that in SAP, that instantly drove collaboration to show, so that they knew we at least had the capabilities. When they were ready to lob that ball to us, we could catch it and keep running. 

 

E J Tavella 0:14:32:2: 

Yes, you talk about the data lake and getting the data structure in place, which is a huge event. It's a challenge for lots of our customers. I think that pre-work always pays off. I think another piece that spins out of this same example is even when you've done all of that, there often is supply chain master data with mapping of new products, for example. Or the pre-launch of a product that you have to start planning for before it's actually set up in SAP. These kinds of things happen all the time, right? In Anaplan, as Adam Thier was talking about this morning. That foundation around data management and ability, not only to bring together the different systems, but also to be able to actually be a source system of truth for that master data. The process around it, and you can use the workflow you do, like you can tie those all in, and that becomes the solution where you manage it. I think that happens way more often than people appreciate in planning. A lot of the legacy tools are like, yes, but if it's not coming from a source tool, I can't have it. Okay, now I've got to go and change SAP and I'd be trying to get somebody to actually put it in SAP and they never do that. 

 

Spencer Hanson 0:15:40:2: 

Or they do it wrong. 

 

E J Tavella 0:15:42:6: 

Yes, or they do it wrong. It plays out, I love it. I'll go back, I'll skip this one. 

 

Spencer Hanson 0:15:47:9: 

Sure. 

 

E J Tavella 0:15:47:9: 

This was just a little bit around the high-level architecture, and you've kind of hit on these highlights in the earlier conversation. It sounds like the majority of your data came from Snowflake, but you did have some direct data from SAP inbound and outbound as part of the connected process. 

 

Spencer Hanson 0:16:03:0: 

Yes, absolutely. This is directly… I mean, I made this slide as part of our roadshow thing, but what I wanted to do when we were talking to people about it was just try to boil it down. I mean, it's obviously more complex than this. This is a very boiled-down version. What I wanted to make sure, especially for the diehard SAP fans that we had in our supply chain world, that our intention wasn't to replace SAP. It wasn't like, this is the new thing and it's the new tool, and then in five years we're going to change to a new ERP system. I was like, no, no, no, we're here to just, SAP will help do our core MRP functionality. 

 

E J Tavella 0:16:39:1: 

You're doing planning, this is planning. 

 

Spencer Hanson 0:16:40:3: 

Yes, we're going to live on top of that. We're going to make sure the only thing that Anaplan is the master of is the forecast, is what the forecast is. That's kind of reassuring, yes, we still need data from SAP, but a lot of the data, because of our IT infrastructure, it's not all in SAP. That's where Snowflake comes in for us to be able to bring in all of that stuff into the data lake, where all the disparate systems that aren't necessary in this structural ERP transactional system for SAP, we can get from Snowflake. Then, together that flows into the data hub, where we have it sitting, ready to go. Then we populate that into the Anaplan, the actual planning module where we're going in and we're making those changes, we're doing the forecast, we're cleansing historical data, we're doing all that jazz. Then the final piece that's here is that the only thing that Anaplan is doing is outputting to SAP, because again, it's the master. SAP is the master of everything else besides the forecast. All Anaplan does is do that. That was a big part of change management, just letting people know that we weren't just coming in with a bulldozer to destroy legacy systems. It was to help to enrich and to enhance that process. Then, everything else, there's a lot of great capabilities from an analytical perspective that I truly love inside of Anaplan. 

 

Spencer Hanson 0:18:08:8: 

There's even stuff that's better than Tableau, like some of the functionality that's there, but the big thing is that our user base with Tableau is broad and massive. Anaplan is very specific, and so we can't just build all of our reports into Anaplan. Since we were already a Tableau shop, we take the rest of all that data, all this really rich, enhanced, really crispy data out of Anaplan, we put it into Tableau. That way we can share it with people that aren't just inside of the supply chain world. 

 

E J Tavella 0:18:37:2: 

Yes, I love it. I think that's great. I think this is pretty common. This is also an area where we're in the process of announcing some options for customers to make it really easy to extend Anaplan out to the passive users in a way that's very cost-effective. We do appreciate that, look, you've got a lot of people using Tableau, but if they could have the real data time, real-time data out of Anaplan in a format that was as good or better, there are interesting options there. We're going to get into forecasting. Maybe we'll come back to the promo and demand planning. I love the fact that you're thinking already, even before you get into next steps, how do I integrate things like promo calendars and things that are going to impact demand into the overall cycle? Let's talk about some of the areas that got delivered as you just went live. 

 

Spencer Hanson 0:19:23:6: 

Yes, so if we think back to the slide, we basically we were at Anaplan Connect, made the decision last year in May-ish or so, went live in June, excuse me, we implemented, started implementation in June and then we cut over where we burned the spreadsheets, they were no more. We weren't doing a forecast in those anymore. Then our first live load into SAP for our production, for the forecast of all 8000 of our SKUs across all of our 30 markets, was November. It was… 

 

E J Tavella 0:20:03:7: 

Scary? 

 

Spencer Hanson 0:20:03:1: 

It was a little scary. [Laughter] We did, and it was so seamless. One of the other things, too, that was, I'm just going to make this plug, the automation that happened before loading the forecasts into SAP, was literally a two-day-long process, and it would regularly air out. There was all complicated things like that. Now, we don't even have to do anything. It just outputs from Anaplan, and it just goes, and we don't have to do anything. It was like it removed that barrier where people had to sit at their computer, and they basically couldn't do anything because SAP had blocked up things. It sounds like I'm ragging when I say SAP. SAP is really great, but it doesn't quite have some of the capabilities that Anaplan can have. It was really massive there. We went live, so since November 1st, we've been using Anaplan for our production forecast and all of our purchasing signals, everything like that has been driven from what's coming from Anaplan. 

 

E J Tavella 0:20:58:2: 

I love it. 

 

Spencer Hanson 0:21:00:9: 

Since the kind of things that we've added in here, when it comes to the efficiencies that have come from Anaplan, when I took over the team, you just had to throw bodies. It just either to be people inside the spreadsheets making stuff happen, there was really no scalability, there was no efficiency to be gained, other than adding more people to handle more SKUs in our markets. It was impossible. Since then, we've not only, like I said, we basically have doubled our SKU and our complexity in the products that we sell over the last three or so years. We've added more things that we have to manage, we've added more markets in which we sell it. Then we've actually been able to reduce naturally the number of planners we have to have managing that. Previously, old planners would manage maybe 300 to 400 SKUs by themselves; now, they average 1000 SKUs that they effectively manage. That's on the efficiency side, so it's just a massive boon for our individual demand planners that they feel empowered to be able to do that; the exception-based recording that comes in there is such a big win. On top of that, forecast accuracy. You add in all of that complexity, more SKUs, more markets, less planners, but somehow we increase our forecast accuracy by 20 per cent. 

 

E J Tavella 0:22:27:6: 

Yes, and 20 per cent is a lot too. 

 

Spencer Hanson 0:22:27:3: 

That's a big, big… 

 

E J Tavella 0:22:30:5: 

We're going to get a little bit more detail on that, but that's a great win. 

 

Spencer Hanson 0:22:33:2: 

It’s been crazy. It's like all that math doesn't necessarily math in my head, like you make it more challenging with less people, or you just have to have some magic behind the curtain, well, yes, we kind of do. 

 

 E J Tavella 0:22:43:3: 

Part of the efficiency, too, is that you get more time to focus on the stuff that had the problems, too, right? Instead of just getting it done, you're doing it intelligently. I think it sounds like even with the math of the number of the items that people are planning around greater increases, they can actually spend more time actually analyzing the data and getting right too. 

 

Spencer Hanson 0:23:01:9: 

Where it matters. Yes, absolutely. From there, okay, as someone who lives in forecasting, making a forecast be more accurate is obviously super-important, but what is that actual impact on the business? That's where we see some of this stuff, where our being able to really optimize our inventory, obviously, it starts with the conductors of the supply chain. We've got to make stuff happen; the rest of the supply chain is going off the beat of our drum. Even though we've just barely started with Anaplan, since November, we've been able to see automatically a reduction in purchases, because now our forecasts are more accurate. You don't have to buy as much, or you're buying more of the products, the right products, like we talking about keynote and less of the wrong products, which is a big increase to cashflow. Already seeing that is such a big impact. I don't even think we've seen the full impact yet, because our lead times are really long. It's like… 

 

E J Tavella 0:24:00:2: 

Tip of the iceberg right now. 

 

Spencer Hanson 0:24:00:5: 

I could make a forecast today, and we might not actually do anything, we might have to purchase on that, we haven't made a decision off of that. We won't see the impact for a year or something like that, but I at least have a lot of confidence that we're going in the right direction because I know that we've seen these really quick increases in forecast accuracy. It gives me confidence in, like, well, if it's this accurate right now, then hopefully we should be able to feel confident in the forecast going forward that when we have these long-term plans, we're making the right decisions as well. 

 

E J Tavella 0:24:32:6: 

We talk about change management, tracking metrics, clearly, you guys are tracking those metrics. I'll go to the next slide because I think it's awesome. I think when you kick these kinds of programs off, getting by and bringing people through the process like you talked about, they're not just buying in at the very end, they're buying in throughout the entire cycle. Setting some goals and having some key metrics that you're tracking, institutionalizing those metrics and tracking performance against them over time. It not only helps with proving the value of the spend that you helped make with Anaplan, but makes your finance team feel good about it all, but it also the team feels better. Look, we're making improvements, here is the value we're delivering. I think it's a win-win all around. 

 

Spencer Hanson 0:25:16:7: 

Yes, absolutely. From a morale perspective, it really is a night and day difference from the demand planners they feel invested in, and it goes a long way, right? You have to have great people, and you have to have people that are happy and excited about that stuff. Results are the things that matter. This is a graph that shows our forecast accuracy over time, all the way back to 2020, up until the star is cut off, which is the most important part. Basically, that was the last, I think that very, very last point at the end on here is February… 

 

E J Tavella 0:25:46:2: 

It shows the last two quarters, kind of thing. 

 

Spencer Hanson 0:25:51:9: 

Yes, it's either February or March actuals from this year relative to our forecast back there. You can see when it comes to, as I was kind of telling that story, our forecast, COVID-19 was basically impossible to forecast. 

 

E J Tavella 0:26:08:2: 

Especially dealing with COVID-19. 

 

Spencer Hanson 0:26:08:1: 

It was crazy, but also we didn't necessarily know how to react to it. It was like, are we going to do this forever? 

 

E J Tavella 0:26:15:0: 

Yes, is the world going to end, or is it going to go up forever? It's sort of like nobody is buying anything, then everybody is buying everything. 

 

Spencer Hanson 0:26:23:3: 

Yes, exactly, so it was really difficult to do that, so that was where that big drop came in as we get into 2021. Really, I think the more important graph, the more important story that this graph helps to tell is that we toiled in Excel and in spreadsheets for basically that drop in 2021 or so up until then. I worked my guts out to try to make it better. It was blood, sweat and tears that we're going to do it, we're going to make it happen. We think that we're super-smart and we're going to figure it out in Excel, and sure, all of that work over three years… 

 

E J Tavella 0:26:53:5: 

These three years, it looks like ten per cent… 

 

Spencer Hanson 0:27:02:1: 

Three years, basically ten per cent improvement. 

 

E J Tavella 0:27:05:6: 

I mean, honestly, you're making good progress. 

 

Spencer Hanson 0:27:08:8: 

Yes, but we always, I remember looking at research and seeing when it comes to a retail company, typically an industry standard MAPE is around or less than 20 per cent, so that was the goal that I had for my team. 

 

E J Tavella 0:27:22:5: 

Yes, especially for like [unclear words 0:27:22.8]  

 

Spencer Hanson 0:27:23:9: 

Exactly. I was like that's where we want to get to, that's what we need to, and we set goals year over year that we're going to do it this year or we're going to make the stuff, we're going to have it happen, but it just wasn't a fight we could win with the capabilities of our current technology stack. It was just impossible. As smart or as cool or as talented as we thought we were, we just kind of existed, slowly improving the status quo that didn't necessarily make any difference. That's where it was so easy, when we saw the technology and saw what was out there, we were like, obviously, we need to leverage these statistical forecasts that are in here. It's a joke on our team that we have our favorite statistical models. We love multi-log decomp. There's a battle between additive decomp, all these different… Like, no, no, no, this is better, that's better! It's great to see the team that are brought in and they're learning because really, these models fit so well with our business when we're going back to seasonality, that makes it easy to let the… It's kind of a paradigm shift where it's not about making a forecast, I'm literally plugging in a number for every single month and every single day or whatever it is. It's a shift to how is it that I'm curating and taking care of the data that's pumping into this model? 

 

Spencer Hanson 0:28:47:4: 

Removing those outliers, trusting the system and using the exception-based messaging to really showcase the power of Anaplan. Then you set that and let the model do its thing. That's again where the efficiencies come from. As you can see here, it's basically we were close, close, close, close to maybe breaching into the 30s and then the last, as soon as Anaplan turned on, it was like, hey, you almost did it. 

 

E J Tavella 0:29:18:2: 

You're going to have to come back and do like a year refresh, like mid-teens. 

 

Spencer Hanson 0:29:21:5: 

Yes, that is a stretch goal for us. We believe we can do it with Anaplan. 

 

E J Tavella 0:29:26:8: 

It's a great story. Let's talk a little bit about the roadmap. I think the journey has been amazing. We've talked a lot about forecast, inventory planning, so it's like how do you make sure you're at the right place and the right part, the right place and time, the right part at the right place on time. 

 

Spencer Hanson 0:29:42:1: 

You got it. 

 

E J Tavella 0:29:46:0: 

Now you're getting into promotion planning. You hit on that a little bit, so actually managing promotions and how that's going to impact [?in an ad 0:29:48.4] cycle. 

 

Spencer Hanson 0:29:48:4: 

Yes, for sure, and that's where we're leaving a lot of the… Anaplan just does our finished goods right now. It doesn't go to the component level, nothing like that right now. Again, we considered that, but we didn't want to boil the ocean. Inventory planning… 

 

E J Tavella 0:30:06:1: 

Good advice. 

 

Spencer Hanson 0:30:06:7: 

Basically, we're checking that and making sure that from a finished goods level and the markets that we support, how we can report and see that and make sure that happens. That's kind of the piece that's happening with inventory. For doTERRA, what's really unique with us is we have a really, I don't know if robust, maybe chaotic or large volume promotion planning. We do a ton of promotion. 

 

E J Tavella 0:30:29:1: 

Yes, for sure. 

 

Spencer Hanson 0:30:30:5: 

That's a big part of our demand plan. Anaplan does a great job of prepping that baseline forecast, but when you add in all the sales and all these different things that happen like that, promotion planning adds that volatility. What we were doing previously is, we had a kind of homegrown solution for a promotion calendar planning app that we were feeding into Anaplan and it was just a… 

 

E J Tavella 0:30:54:7: 

That's what's in there right now. 

 

Spencer Hanson 0:30:57:6: 

Yes. 

 

E J Tavella 0:30:58:0: 

Right, got it. 

 

Spencer Hanson 0:30:58:3: 

What we decided to do is we realized the capabilities and the flexibility of Anaplan was like, oh, we can definitely do this whole process in Anaplan. We didn't just take what we currently had; we said, we know all of these things and all of these problems that we wish that we could fix, but because it was a homegrown solution, we just didn't have the capabilities to do that. We just threw everything at the kitchen sink and said we're going to make the promo calendar the greatest thing ever. We are about, we are going to go live June 2nd with it. It’s been a ten-week implementation. There's five billion inside of the process, I think so, which as Anaplan users, you guys are going to know that's just par for the course, right? 

 

E J Tavella 0:31:43:2: 

Only five billion? It seems like nothing. 

 

Spencer Hanson 0:31:43: 

Yes! Anyway, the big part, the biggest thing that's going to change this is that now we're really getting to that connected planning detail. It's not just the demand planners, but we're actually giving the market reps who make their plans, we're also grabbing the finance controllers, who are the ones who approve those promotions. We're bringing them in and we're putting them in the sandbox and saying, hey, you want to do this promotion, you type that in, it hooks right back into our demand and inventory planning model. All of a sudden, it tells them your margin isn't right, your cost isn't right. 

 

E J Tavella 0:32:19:9: 

You don't have enough inventory. 

 

Spencer Hanson 0:32:20:2: 

We don't have enough inventory. If you do this promotion, you will stock out afterwards. 

 

E J Tavella 0:32:23:3: 

Do you have lots of inventory for your promotion? 

 

Spencer Hanson 0:32:25:9: 

Yes, or you have made this promotion plan, and you want to cancel it, but we already made all the inventory, so please don't do that. It's all these exceptions that happen, that it basically makes these checks… Or another one, historically, this promotion, you're kind of repeating a promotion, you're really ambitious with your sales forecast here, maybe temper the waters. 

 

E J Tavella 0:32:44:7: 

You didn't hit the numbers last time. 

 

Spencer Hanson 0:32:47:2: 

Yes, maybe bring that down so there's basically a finance-based exceptions, there's demand-based exceptions, and then there's supply-based exceptions. The actual sales or marketing people when they're going in live, they can see that data, and it will be like, oh, maybe I can't do that. Rather than waiting around and saying, oh, I'm going to send an email to this person, that person, the other one, wait a week and see if people approve. We've built that whole approval process and not even just the approval process, but that information right, front and center. If they're like, right, oh, I can't do lemon, I'm going to do peppermint. Oh, you can do peppermint. They can change that, and they can… 

 

E J Tavella 0:33:20:1: 

It's like an organically sort of scenario model, which one they want to do. 

 

Spencer Hanson 0:33:23:9: 

Yes, exactly, and they can swap that out. They make those changes, and then when they're ready to go, they make that submission process, and then we use workflow to dynamically just approve it across the approvers and the supply chain and across the finance controllers. Then that feeds into the model, and then if they want to change it, it's all right there. It's a really bespoke solution to what doTERRA really needed, because that's a big part of our business. That's why I just love the flexibility of Anaplan because it's like, could you go out to any other software and make that work for your business? I don't know of one of the solutions. Could you maybe custom-build it using Python, like we were doing? Sure, but is it in your integrated process to make that happen? It was a lot of work, and it took a lot of genius from our side, from our implementation partners, again, for Carter, a plug for them, to make it happen. We're so excited with the product that we have, and it's going to be such a massive game changer. 

 

E J Tavella 0:34:18:8: 

We love it, and I think that flexibility to fit your business at the pace that you're at, too, I think, is really critical. I mean, you hit on apps, we've talked about them. They don't replace that ability to really derive the [unclear word 0:34:30.8] you read, so apps might accelerate a little bit, but frankly, you were pretty fast. 

 

Spencer Hanson 0:34:32:2: 

Yes. 

 

E J Tavella 0:34:32:5: 

It might give you some things you don't have, but there are things you say, look, I don't need all that yet, let's turn on later down the road. I love it, it's a great story, and I love the connected vision, and you're getting into DRP. 

 

Spencer Hanson 0:34:43:4: 

Yes, exactly, so that's the last part that we're going to start, as soon as we're done with the promo counterpart. That's, if you don't know what DRP is, it's down to the site balancing or making sure that our warehouses and our larger markets have the inventory as they support everything like that. That's a little bit smaller piece, but again, it's one of those things that's like, could we do it in SAP? Maybe, we've thought about it, well, if you want to, then you've got to, SAP has that functionality, but you've got to buy the whole enchilada if you want it. We don't want that sort of thing. This one is going to be a little bit faster. Just again, taking these little pieces that we started with, this kind of part of our supply chain and we are building on the rest of the chain that link together to make sure that we have a more robust model. This is our current roadmap, I mean, the sky is the limit for what we can do. It's been amazing. 

 

E J Tavella 0:35:31:6: 

I love the fact that you're already sneaking into finance, sneaking into marketing and sales too. Those people will drink the Kool-Aid like you and move on. 

 

Spencer Hanson 0:35:40:4: 

Hopefully, I'll try to convince them. 

 

E J Tavella 0:35:41:5: 

Yes, totally. You're not passionate about it, though.[Joking tone] 

 

Spencer Hanson 0:35:44:2: 

No, not at all!  

 

E J Tavella 0:35:45:1: 

I do have something for you. 

 

Spencer Hanson 0:35:49:7: 

[Laughs] 

 

E J Tavella 0:35:54:0: 

Emily's going to show it to you. Captain Anaplan. 

 

Spencer Hanson 0:35:55:2: 

Thank you so much. 

 

E J Tavella 0:35:55:3: 

Thank you, everybody, for joining. Appreciate it.