Fat finger

8 May 2010. Yesterday, the stock markets on Wall Street went into freefall. At the start of the day, share prices dropped by a whopping 9 percent. The drastic fall in value was most likely the result of what is known as a ‘fat finger’ – an input error by a stockbroker which resulted in him selling a thousand times more than he intended.

On hearing this, I started to wonder whether such momentous typing mistakes are ever made in the supply chain. Has a purchaser ever accidentally ordered a thousand times the quantity of an article he needed? A mistake like that would probably be picked up fairly quickly if it were to appear on traditional paperwork such as an order form – but with online ordering, it could be easier for such errors to occur.

I wonder whether this blog will lead to readers sending me stories of real-life purchasing blunders. And do such errors occur in the process of periodic forecasting? The increasing focus on forecasting accuracy has most likely resulted in such mistakes being eliminated, and weekly Sales & Operations Planning (S&OP) meetings ensure that any unexpected deviations in the data can be queried quickly – probably even being picked up ahead of the meeting, in the process of collating the figures.

Turning our thoughts back to Wall Street, how on earth can it be possible for one fat finger to send the entire financial market into a nosedive? The stockbroker in question should be for the chop – or his fat finger, at the very least: a public humiliation in the middle of the dealing room floor. From now on, only stockbrokers with thin fingers are allowed. And, of course, some kind of control mechanism should be integrated into the order system as an extra check that someone really does intend to buy or sell a thousand times the amount – representing a very short, fully automated S&OP cycle.

Martijn Lofvers, Publishing Director & Chief Editor, Supply Chain Magazine