Every company operates within a large set of constraints, including annual budgets, material purchase contracts, resource capacity, hospital ward space, environmental regulations, customer order contracts, financial reporting regulations and others. While these financial, physical and policy constraints can impact an entire organization, most planning processes are still done by department, business unit, geography or some other hierarchy. The need for true Integrated Business Planning (IBP) has never been greater.
One of my least favorite classes while working toward my MBA at the University of Texas was Operations Management. Sure, it was better than financial accounting, but whenever I looked at the material, I thought, “I’ll never run a manufacturing plant. Why should I care?”
“If I had only known back in school what I know today!”
Prescriptive analytics, also known as optimization, is a very powerful approach that can deliver significant value strategic, tactical and operational use cases in every industry. Unfortunately, until now it has also been very hard to develop optimization models and firms have required the use of PhDs and significant education for management.
An update to a blog I wrote back in 2011 titled “Two Thousand Models – And Counting!”
Research shows a majority of spreadsheets have data or formula errors. All kinds of spreadsheets are prone to errors, including family budgets, business models, and macroeconomic models upon which the fate of fiscal policies of major economies are decided.