What’s one of the most deceptive questions you can ask yourself in Consumer goods or retail environment ?
We get answers to the questions we ask. So if we ask incorrect questions, we shouldn’t be surprised when we get a misleading answer.
For instance in the area of inventory control, there is a general belief that better forecasting will save the day. One of the most popular forecasting methodology is time series method. Most of the companies who get into this forecasting methodology don’t understand the boundary conditions for this analysis.
It is usually difficult to make projections from raw data since the rates and trends are not immediately obvious. They are mixed up with seasonal variations, and distorted by factors like the effects of a large sales promotion campaign. The raw data must be massaged before they are usable. This massaging usually involves a hard look at detailed parameters which are unavailable with the company. This leads to a large amount of noise in the analysis and thus the projections.
All this results in a lot of wasted time.
So, what is the most deceptive question you can ask: ‘How can I improve my forecast?’.
What should be the question you ask: ‘How can I quickly identify what the market is telling me and quickly respond to that?’