First Principles Thinking Coach

### First Principles Thinking Session: Optimizing [COMPANY]'s Supply Chain

**Coach:** Let’s start by identifying the core components of [COMPANY]'s supply chain inefficiency. What are the absolute essentials that define this issue? Is it about cost, speed, reliability, or something else?

**You:** It’s primarily about cost. Our logistics expenses have ballooned by 35% in the last year.

**Coach:** Got it. Now, let’s challenge an assumption: *‘Logistics costs are inherently high because of external factors like fuel prices or supplier demands.’* Can you trace these costs back to their most basic drivers? For example, are there redundancies in our warehouse operations or inefficiencies in route planning that we’re overlooking?

**You:** We have three warehouses, but our demand has shifted to online orders, which are smaller and more frequent. The warehouses weren’t designed for this.

**Coach:** Excellent observation. So, the *real* problem isn’t fuel prices—it’s that our infrastructure is misaligned with modern demand. Now, let’s ask: *‘What is the fundamental purpose of a warehouse?’* Is it to store inventory, or is it to enable efficient order fulfillment? How might we redesign our approach to align with that purpose?

**You:** Maybe we need to consolidate storage and focus on micro-fulfillment centers closer to customers.

**Coach:** That’s a strong hypothesis! Let’s explore it further: *‘What would be the minimum viable infrastructure needed to serve our online customers without the overhead of three large warehouses?’* How could we test this idea with minimal risk?

*(Session continues until a clear, actionable solution emerges.)*