eBooks & Briefs

Six Tips for Success Using Machine Learning for Demand Planning

Important points every supply chain organization should consider before diving into a machine learning project
600x600 INF Machine learning with a human touch


Machine learning—it’s a ubiquitous buzzword that’s used loosely but at the same time widely misunderstood. Like many powerful technologies, machine learning has the potential for great business benefit, but if wielded in the wrong way can result in wasted time and resources, and poor business decisions. Remember the saying, ‘a stitch in time saves nine’? The key to sustainable supply chain benefit from machine learning lies in taking a thoughtful approach at the outset: establishing goals, devising a strategy, testing results and refining your approach as you go.

We’ve compiled six important tips for businesses considering applying machine learning to supply chain planning problems, based on our nearly 10 years of experience building and delivering machine learning solutions.

First, let’s take a quick look at the machine learning process, and why it’s a great fit for demand planning challenges.

What’s the Machine Learning Process?

01 Data Gathering

Acquisition and storage of relevant structured and unstructured data sets.

02 Data Preparation

Exploratory data analysis, cleansing, transformation, feature engineering, and selection, training and test data set split.

03 Model Selection

Domain appropriate choice of supervised, unsupervised or reinforcementa learning algorithm(s) (e.g. K-means clustering, decision trees, neural networks, etc.).

04 Training

Train the model with the training data set.

05 Evaluation

Measure the performance of the trained model on the test data set against a defined evaluation metric (e.g. achieve a forecast accuracy of at least 85%).

06 Hyperparameter Tuning

Empirical process of changing algorithm parameters to improve model performance.

07 Prediction

Deploy the trained model in a production system environment


Sound a bit intimidating? Fortunately, the right machine learning technology partner can automate and simplify these steps with self-learning models that react to changes in your business. That means you don’t need an army of data scientists to incorporate machine learning into your demand planning.