Your forecast doesn’t matter (as much as you think)

March 26, 2024
2 min read

“That’s the best we can do for forecast accuracy - and this is really overfitting it”
“Ok then. I guess we’re all getting fired”

It was late 2017, in less than a year we would be delivering thousands of Model 3s every week - with a very clear objective of no inventory build up or excess wait times for customers. I had brought in the big guns - data scientists from Tesla’s Growth team to work their magic on our order forecast.

But the data wasn't cooperating. And the forecast alone was not going to solve our problem.

Ultimately, the team solved it. But not until we dropped the dream of perfect forecasting and rolled up our sleeves to build automation into our supply side planning.

At Atomic, we see this dynamic all the time with our clients. Everyone’s first instinct to ‘fix’ stock outs or excess inventory is to go after the demand forecast. The logic is sound - if you know what’s coming, you should be able to plan for it.

But what if you were ready for anything? What if the planning itself was automated so that no matter what came in, you could instantly adapt?

It's like preparing for a storm - obsessing over predicting the exact rainfall matters less than having solid drainage systems, emergency supplies, and a flexibility to adapt as conditions change.

No doubt, it’s important to have a ‘good enough’ forecast. But once you get there, your next investment should be in supply planning automation - procurement decisioning, inventory allocation, dynamic safety stock levels. The gains in reducing risk, business outcomes, and saving team time are enormous. And that supply planning infrastructure can be implemented in weeks.

Want to learn more? Set up time to talk here.



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