I attended my second APICS Central Indiana Professional Development Meeting at Carmel on the 13th of March 2014. The keynote speaker was Bill Whiteside, who is a founder of Demand Solution Northeast, which markets and supports the Demand Solution suite of forecasting and supply chain management software in the Northeast US. He is a graduate of the University of Notre Dame and a professional member of APICS. At that dinner event, he presented twelve supply chain forecasting lesson from “The Signal and The Noise.”
The Signal and The Noise book is about the overwhelming proliferation of data and how so much of that data can produce more noise (garbage) than the signal (truth). The book told us how to find the truth amidst all the noise and the value of seasoning your data with theory and common sense. The author of the book, Nate Silver, provides a number of practical lessons that are extendable and very applicable to supply chain forecasting.
Lesson number one is “more information does not mean better information”. Too much data can cause analysis paralysis. We need to use our tools wisely and trust our instincts. A lot of data are available for us to analyze, but not all of them is worth to be considered during our forecasting process. We need to focus more on our planning process, the data that we get, the products, the customers and the channels that matter the most so we can get a meaningful patterns.
Lesson number two is “there is one thing that humans do better than computers” which is incorporate data visualization and collaborate with the system forecast as the starting point. Computers has an ability to discern patterns, detect outliers, crunch data and manage transactions but they are no good at nuance or sentiment. In the other word, computer good at ‘always’ when people are good at ‘sometimes’. Human experience can help them to improve computer-generated forecasts. It is much easier to change a forecast than it is to develop a forecast. Therefore, let the computer give us a forecast for our starting point. But we need to trust your vision and make any adjustments that will improve the forecasts.
Lesson number three is “it is better to be a fox than a hedgehog”. On the book, Silver expands this idea and notes that a fox know many things because it’s likely to intensely question itself and gather information from a variety of sources. A hedgehog, on the other hand, will be more likely to rely on a single source of conventional wisdom. This idea encourage us to be resourceful like a fox, so we can be a more valuable contributor during the collaborative process. Collaboration is typically understood as a process in which multiple people provide input .However, collaboration can also be performed on an individual basis by collecting the information we need to shape to temper our projections and plans.
Lesson number four is “polls become more accurate the closer you get to the Election Day”. This idea encourage us to continually update our...