Admit It, Your Forecasting Software Sucks, It Fails to Deliver Times And Again. Now What? Become A Supply Chain “Artist”.

"When was the last time you saw a forecasting software that predicts 50%, 60%, or 70% accuracy? I have never seen one, yet the reality is forecasting software often fail miserably in delivering their promises. So how does one capture accurate demands?

Becoming a supply chain “artist” requires a lot of finesse and creativity as you would expect from most crafts. Some compare demand forecasting to more of an art than a science because there is no one formula for success. It requires a combination of technique, persistence and creativity. To become a supply chain artist, one must learn how to match supply and demand to prevent over or under supply. Since not all businesses are created equal, it is important for a demand forecaster to know the needs and characteristics of the market. 

As a painter uses his brush and paint to deliver beautiful strokes to create a masterpiece, the same is true with a Supply Chain “Artist”. He or she needs to communicate and collaborate with customers and suppliers to understand their needs and future plans, in order to deliver the best services. Most if not all SCM software have capabilities to help in collaboration. Electronic Data Interchange (EDI) transactions, event alerts, project portals and supplier portals are just some of the popular tools being used to increase visibility and collaboration. 

A Supply Chain “Artist” must know the customers’ behavior, especially now since customers gain tremendous power over buying decisions due to greater access to information.  Knowing the three basic forecasting models is the first step in becoming a supply chain artist. Depends on the situation, a Supply Chain “Artist” can use a judgmental, time series or cause and effect forecasting model. These models are not perfect for every situation and that’s what makes demand forecasting an art. In developing the skills to become an artist, it is very important to understand the time and monetary cost involved with each forecasting technique. 

Using the right algorithm to project future demands can also contribute to forecast accuracy but the keys in becoming a Supply Chain “Artist” are, visibility, open communication, and fast access to information and insight. Decision makers are not robots, their decisions are based on available information (right or wrong) and gut feelings. An efficient forecasting software is necessary, but no matter how sophisticated or expensive it is, in and by itself, it will never predict accurate forecasts.

Brief Biography

Standley Thomas is a passionate Logistician with nearly a decade of leadership and managerial experience gained from practical supply operations in US, Asia, Europe and the Middle East. Enjoys writing about professional development and ways to optimize the various functions of Supply Chain Management. Currently working in the government sector, seeking opportunities to lead, manage and improve the logistical operations of any organization.