Forecast Errors Lead to Unpredictable Supply Chain Disruptions
The recent Forecast Errors newsletter suggested that leaders using traditional risk-management techniques and simple heuristics (dollar amount spent at a site, for instance) often end up focusing exclusively on the so-called strategic suppliers; these expenditures are very high and whose parts are deemed crucial to product differentiation, and overlooking the risks associated with low-cost, commodity suppliers. As a result, managers take the wrong actions, waste resources, and leave the organization exposed to hidden risks. There are effective models which allow...
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