The Decision Factory

The technical, philosophical, and psychological underpinnings of a functioning Decision Factory

Most supply chains optimize only the half of the error they can see.

Overstock is counted. The order that quietly went to a competitor is not.

One error arrives with a pallet attached. It gets a variance code, an owner, and a slot in next month's review. The other leaves without saying anything. Nobody signs for it, so nobody improves against it.

That is why a decade of forecast improvement can end with the same people in the same room reconciling the same spreadsheets. The accuracy went up. The decisions did not.

The series
The Decision Factory's foundation
Reading time
31 minutes published
Written for
Operations leadership
Drawn from
Auto, defense, pharma, retail
Start with Paper 01 See all six

Three findings that run through the series

None of this needs a lab, a proof of concept, or somebody billing you by the hour to find out. It needs your own numbers and one quarter. Follow the money and the logic with us through the six papers and check every claim as we make it.

01

The error you can see is the smaller one

Write-offs, markdowns and expedited freight all reach a report and acquire an owner. Lost demand does not. A process charged for one direction of error and not the other will drift toward the unpriced one, every cycle, and look disciplined the whole way.

Paper 02 →

02

A service level is not an objective

Ninety-five, ninety-eight, ninety-nine point five: percentages nobody derived, applied uniformly across items whose economics differ by an order of magnitude. On the same data, a blanket target routinely costs a third more than the economic optimum it was standing in for.

Paper 02 →

03

Accuracy is the wrong contest

Two forecasting models can score identically on every symmetric error metric and invert the money ranking once those errors are priced. Most model bake-offs are structurally unable to see the difference that matters.

Paper 03 →

01 The Case for ChangeWhy the process cannot be improved 9 min → Planning processes are not underperforming versions of good ones. They are the stable outcome of a system with no priced objective, which is why decades of diligent improvement has made them worse. 02 What Being Wrong CostsThe economic ledger 10 min → Service levels and fill rates are targets nobody derived. Until each direction of error carries a price your finance director will sign, there is nothing for a planning system to optimize. 03 Forecasting Is Not the PointThe wrong contest 12 min → A forecast is not a number, and accuracy is not the objective. The organizations that win are not the ones with the smallest error. They are the ones whose errors cost least.
04 The Decision FlowThe architecture Coming soon What the machine actually looks like: five stages, four of them unattended, and the one interface where human judgment enters and is captured rather than lost.
05 Who Does What NowThe organization after Coming soon Automation does not thin the planning organization so much as repoint it. Three functions appear that almost nobody staffs today, and skipping them is how the spreadsheets return.
06 Proving ItEvidence and decay Coming soon How to make the case in money on history you have already lived, run the thing in parallel before betting on it, and detect the slow decay that returns a working system to committee.
Cover of The Decision Factory by Adam DeJans Jr. and John Brandon Elam

Also by the authors

The Decision Factory

A novel in the tradition of The Goal, drawing on many of the same ideas as this series without dramatizing any single paper in it. It follows a team that rethinks its policies and its simulations to make better decisions under uncertainty, which is the short way of saying what the whole book is about: how to decide well.

By Adam DeJans Jr. and John Brandon Elam. Foreword by Warren B. Powell, Professor Emeritus, Princeton University.

Get the book Start with Paper 01

Paperback/Hardcover Audiobook, early 2027