In our line of work at Arkieva, when we ask this question of business folks: What is your forecast accuracy? Depending on who we ask in the same business, we can get a full range of answers from 50% (or lower) to 95% (or higher). How is this possible? Imagine a management team being given
Key Points on MAPE: Mean Absolute Percent Error (MAPE) is a useful measure of forecast accuracy and should be used appropriately. Because of its limitations, one should use it in conjunction with other metrics. While a point value of the metric is good, the focus should be on the trend line to ensure that the
Research shows that a majority of mergers fail. A recent study put the percentage as high as 83%. As one would imagine, there are various reasons for this high rate of failure. However, the reasons can be divided into two main groups:
Recently, I visited our office in Antwerp, Belgium. I was there to participate in the LogiChem conference with William (Billy) Duty, the Director of S&OP Center of Excellence at Momentive and an Arkieva client. As is often the case with my trips to Belgium, I ended up drinking more beer in my very short stay
What-if scenario planning is an excellent technique that allows a planner to ask questions on the future. Given a working model that represents a business, a planner can quickly ask the questions that represent the range of possibilities in the foreseeable future which can render the current plan obsolete.
In one of my previous blog posts on inventory, I used the info-graphic above to show the evolution of software to calculate safety stock. Since then, I have been asked the following question by several supply chain colleagues: How should one decide if their business needs Multi-Echelon Inventory Optimization (MEIO)? This is my attempt at
It was Sir Isaac Newton who told us that things not in motion will continue to be that way until acted upon by an external force. Vice versa, things that were already in motion will continue to move that particular way without a change in direction or speed unless acted upon by an external force.
My first memory of inventory is from a conversation I had with my Dad when I was probably 10 years old. I remember him telling me to go to a particular store because the owner kept a lot of inventory on hand. He equated that to the owner being a wealthy man, who obviously knew
Key Points: Work hard on finding the ‘perfect’ metric that measures the behavior you are trying to improve. Look for both the cause and the effect. In the absence of such a metric, do not ignore the ones that are only partially good. Do not measure something just because the data is available.
Sales is a fast-paced business; people who aren’t focused on the here and now usually lose out on sales. As mentioned in Jelle’s blog, sales persons would rather be out in the field selling, which is the reason why they feel it would be a waste of their resources sitting in their office forecasting. Yet,