Documenting Key Observations from SCM Software Projects

What This Article Covers

• How does are recent article draw a distinction between responsiveness and planning?
• What has given planning a bad reputation?
• Is it true that companies should replace planning with responsive capabilities?

Background

Forecasting has been in existence since humans began trading and living in more complex societies. The history of forecasting and other topics unassociated with physical and tangible items such as transportation equipment have been greatly underemphasized as a historical topic. Historians have tended to focus on things like wars, kings and conquerors, but without understanding that logistics activities are necessary to support such endeavors. There are a few exceptions to this, such as the book Supplying War. History is a function of sampling, and while the works of philosophers and political leaders has been considered noteworthy, how forecasting was performed for in ancient Sumeria has not been a well-researched topic. Therefore, much of what we know about supply chain methods, record keeping, mathematics employed as been quite limited.

It is estimated by Peter L. Bernstein that forecasting in a scientific sense only began during the Renaissance. Up until that time, the future was considered in the hands of the gods. Its hard to imagine that gods were invoked by forecasters to explain why a predicted thing would happen, and quite foreign to us today. While a modern forecaster might perform detailed analysis on historical trends, forecasters in antiquity were most often the priesthood. In fact, according to David Orrell “for much of history, the same experts supplied both horoscopes and weather forecasts.” For much of human history the concept of time itself was understood in a completely different way that people do today. For instance as pointed out by David Orrell:

To Plato and other philosophers of his time, the universe was not a place of chaotic flux and change but a kind of endless repeating cycle. Like Pythagoras, Plato thought that time moves in a circle. The future had already been determined, and it was the past. Because events did not occur randomly, but were known in advance, it followed that the future could be predicted. The logical place to start was up above in the heavens.

Here we can see the beginnings of astrology. Peter L. Bernstein goes on affirm this view held by the Greeks:

The Greeks believed that order is to be found only in the skies, where the planets and stars regularly appear in their appointed places with an unmatched regularity. To this harmonious performance, the Greeks paid deep respect, and their mathematicians studied it intensely.

David Orrell:

The Greeks like others before and after them, believed that life here on earth was in harmony with the heavens. The arrival of a comet could herald drought, famine, or political upheaval. The positions of the moon and the planets could be interpreted to make predictions about the weather and the harvests. Astrology was also used to determine the optimal timing of medical interventions, and to cast horoscopes of newborn children.

While the Renaissance is where scientific methods of calculating risk seems to have first development, it clearly did not influence all of Europe. For instance, in 1600, astrology was still the major way of diving the future.  However, how about everyday forecasting, such as merchants that ran shops or brought stock to market? Most likely they were not using astrology, but applying a “moving average” on some occasions (i.e. bringing what they sold the last few periods” or a “seasonal model” bringing what they sold the same time last year). However, it is thought that formalized forecasting did not begin until the mid 1700s. This is the first type of forecasting that could be considered to have a connection to modern forecasting such as statistical forecasting. Of course consensus forecasting or judgement methods have always been used.

References

“The Future of Everything: The Science of Prediction,” Dr. David Orrell, Basic Books, 2006

“Against the Gods: The Remarkable Story of Risk,” Peter L. Bernstein, Wiley, 1996

“Supplying War: Logistics from Wallenstein to Patton,” Martin L. Van Creveld, Cambridge University Press, 2004

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