Estimated reading time: 5 minutes
Big Data and Artificial Intelligencein the service of Profiling Forecasters and how they do to Improve the Supply Chain.
Being undersupplied, overproducing, underproducing or having no idea how much we are going to sell, are part of the mistakes that are usually made in Supply Chain Calculations, leading to cost overruns for our companies.
In the current circumstances, these are inaccuracies that, depending on their value, can bring us closer to or further away from losing the fight for business survival in the face of the Coronavirus and its subsequent impacts on the economy.
It is important, therefore, that we take a pause to make an assessment of how we are forecasting in the supply chain. Supply chain and different tools to do so.
THESE ARE THE PROFILES OF WHO MAKES AND HOW THEY FORECAST THE SUPPLY CHAIN
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Experienced:
- The first of these is the group of companies with experienced planning staff. They have been engaged in forecasting and projections in their supply chains from the very beginning of their companies or their work.
- They deserve all our respect and admiration. They are experienced, patient and unwaveringly calm. Their persistent sense of observation is their guide to decisions and prognoses.
- They choose as their "weapon of choice" adjustment factors (e.g. 10%) up or down, and although they are aware that there are changes, they think that it is just another trend, so they are certain that they will not be the market leader in supply chain management but they will remain in the market.
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Excellent:
- This group is very sympathetic to technology, believing that it is and will be the transformational force in their business. They rely heavily on information systems to "dehumanise their business processes".
- They have chosen Excel as their "weapon of choice" to integrate data from their ERP, WMS, CRM and make their forecasts. They are persistent, as they prevail even though there are inaccuracies and it takes a lot of time to put the forecast together for the first time, process it as the amount of data grows and review the final result.
- They have one great quality and that is their awareness of improving their forecasts, which they know can be done much better than what they are doing.
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Forecasters:
- The third group are the profiles that are undoubtedly evangelists of systematisation and automation in processes. They have made digital transformation a fact in their companies, covering their business and mission processes through technology.
- They are the best at benchmarking forecasting modules used by their ERP, WMS, Planners, among others. They have extensive knowledge of models such as SES, ARMA, ARIMA, so they have made statistics and analytics their "weapon of choice".
- They are aware that analytical forecasts face destructive evolution and want to be ready when this happens.
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Forecasters NG:
- Finally we come to the fourth and last group in the profiles of people who work and love forecasting within their companies. They work in the midst of information systems and automation, and it is really difficult for them to remember what their past was like working in a different way than today.
- They are disruptive leaders and therefore differentiators within their organisations. They are so aware of making decisions through information that all their decision-making processes are supported by analytical models, so statistics and analytics will always be present in their minds and hearts.
- They have taken the best of these worlds, so Big Data, Artificial Intelligence and Deep Learning are their "weapons of mass destruction" in this world of continuous improvement to agilely obtain, refine and productivise the most valuable asset in your company... your data!
Now that we have gone through the profiles.
Do you identify with any of them?
Whether you have done so in full or with some of its features, we share some best practices for using your data with next-generation tools.
Artificial intelligence and Big Data are some of them, which we are sure can help you on your way to improving your supply chain:
Artificial intelligence and Big Data are some of them, which we are sure can help you on your way to improving your supply chain:
Tips for Supply Chain Forecasting
- For the "Experienced": Remember that data is indispensable for planning and operating. So if you want to get into a data-driven culture, we recommend that you start using data analytics and artificial intelligence to forecast sales, demand, supply or reorder points, among others.
- If you are an "Excel-ent": The way forward is to perform vertical data integration, so as well as the experienced, the use of analytics and artificial intelligence in your supply chain forecasting is a fundamental step to continue on your path already paved.
- In the case of "Forecasters": It is time to make natural selection of models, integrate data in a transversal way and enter the world of artificial intelligence in its Deep Learning branch.
- And finally, for our "Forecasters NG": It is ideal to resort to using neural networks such as Recurrent Neural Networks and Long Short Term Memory and thus evolve towards forecasting your supply chain autonomously by integrating open and third party data.
Conclusions
No matter what profile you belong to or where you are, remember that there are and will be better ways to forecast processes in our supply chain, making use of different tools depending on the maturity of your organisation's data culture.
But above all, remember that technology is your best tool on the road to achieving less uncertainty in your projections and mitigating risks.
But above all, remember that technology is your best tool on the road to achieving less uncertainty in your projections and mitigating risks.
