The Smart Forecaster
Pursuing best practices in demand planning, forecasting and inventory optimization
No, not that kind of regime change: Nothing here about cruise missiles and stealth bombers. And no, we’re not talking about the other kind of regime change that hits closer to home: Shuffling the C-Suite at your company. In this blog, we discuss the relevance of regime change on time series data used for demand planning and forecasting.
Generally, the supply chain field has lagged behind finance in terms of the use of statistical models. My university colleagues and I are chipping away at that, but we have a long way to go. Some supply chains are quite technically sophisticated, but many, perhaps more, are essentially managed as much by gut instinct as by the numbers. Is this avoidance of analytics safer than relying on models?
In this blog, we review 9 specific questions you can ask to uncover what’s really happening with the inventory planning and demand forecasting policy at your company. We detail the typical answers provided when a forecasting/inventory planning policy doesn’t really exist, explain how to interpret these answers, and offer some clear advice on what to do about it.