18 Ways to Get SALES Involved in Demand Planning

Collaboration between Sales and Operations professionals in the demand planning process is critical if you want to achieve better delivery rates, higher service levels, fewer stock-outs and increased customer satisfaction. While the Supply Chain department has a clear view of “regular” demand patterns, Sales has insights into exceptions, new opportunities, new products and promotional activities. Working together to incorporate all this information into the sales forecast and demand plan can ensure that everyone is prepared for demand fluctuations.

Unfortunately, though, some sales organizations—or at least some sales professionals—are reluctant to engage in the demand planning and S&OP process. This article presents 18 ideas that can be used by supply chain leaders to improve participation by their sales organizations in the process.

THE DEMAND PLANNING PROCESS (FOR SALES)

• Simplify the inputs needed by Sales. It’s important to make it easy for salespeople to contribute to the demand planning process. Keep in mind that they are under constant pressure to deliver sales growth, so it’s wise to use their time sparingly.

• Define the exact process for them. The demand planning process must be easily understood and should convey who does what, and by when.

• Expect Sales to make incremental changes only. At a minimum, sales should start with a statistical base forecast and historical data provided by the demand manager and make incremental changes each month. Depending upon the structure of your company’s demand planning process, you may also want to give the sales team other information like promotional lift to validate with their customers.

• Define how to get forecast inputs from customers. This is important because if it is not specified and applied consistently across the sales force, inconsistent information will prevail. Sales management needs to develop a customer-interaction strategy, often by channel, market, or customer segment.

• Be realistic about the detail level and horizon of your forecasts. Sales input to the forecast is generally tactical in nature and done a few months out. Both Sales and Marketing should build upon the baseline forecast (among other inputs) with higher, S&OP-level forecasts for the medium- and longer-term months of your demand and financial planning horizon.

• Don’t ask Sales to forecast every item. Ask your sales organization to provide input on items of relatively high importance and variability – not on those that can be forecast using statistical techniques.

• Let Sales know that the process is fluid. As key participants of the demand planning process, Sales should be able to suggest process changes with the understanding that such changes support the requirements of your business.

SUPPORTING TECHNOLOGY

Every company needs to forecast demand, plan both operations and supply, and integrate the forecasts and plans with financial planning and analysis capabilities.  This article assumes that you have a forecasting application and need to get better process compliance and ownership from Sales.

• Configure your software to your demand planning process. Be sure the core elements of your demand planning process are configured the same in your forecasting system. For example, if your process is based on a 12-month rolling forecast, then show 12 months in the system and 12 months on the demand plan that you bring to S&OP sessions. For sales input, views of the forecast should map to the way you collect and manage relevant data (e.g., by customer and/or by product family and item).

• Give every salesperson a personal view of their forecast. You can give others (especially managers) roll-up views or other information, but it’s important to make it quick and easy for salespeople to find, view, and update their own “slice” of the forecast. Online access to their own views is certainly more efficient than exporting and e-mailing spreadsheets back and forth.

• Give Sales easy access to historical data. Salespeople need historical data when they’re negotiating future sales with their customers. Make sure that historical actual sales as well as historical forecasts are automatically integrated into (or easily accessible by) your forecasting software so that information will always be instantly available. Our customers have found the use of Silvon’s data hub for storing and managing sales and operational information a key component of their demand planning technology.

• Highlight exceptions. Sales professionals should be made aware of exceptions or problems requiring follow-up that pertain directly to them. Establish rules that automatically highlight exceptions, or a demand manager could manually indicate something that a salesperson needs to check or verify.

• Provide your Sales team with key performance indicators (KPIs). Salespeople have personal interest in their metrics, so it’s helpful if the forecasting software calculates the forecasting KPIs to make it easy for them to see where they stand. Forecast-accuracy metrics are often not included in sales KPIs, but if your company is serious about demand planning, then they should be.

• Use e-mail alerts. Leverage automated workflows in your demand planning system to remind salespeople when due dates are coming up for their inputs and to alert supervisors when due dates have been missed.

CHANGE MANAGEMENT

• Explain the process to your Sales team. Your sales personnel may not understand how important their involvement in demand planning is to the company’s overall success. Provide them with an overview of your company’s demand planning process and what other functions are contributing. Describe how the demand plan drives ALL downstream planning and is what operations uses to meet sales commitments and keep the company competitive in the areas of innovation, cost, quality, and lead time. Some of our clients offer an internal demand planning course for new Sales staff to educate them on their specific processes.

• Show Sales what’s in it for them. People will not accept change if they think it will make it harder for them to succeed. Promising them that their involvement in the demand planning process will help them keep their customer commitments, maintain enough of the right inventory, and stay cost-competitive should convince them to participate.

• Employ training and coaching. Have your sales leaders deliver general training sessions and set up one-on-one coaching sessions, enlisting the support of a demand planning “ambassador” to work with his or her peers in sales.

• Get support at the top. If you want sales leadership to drive engagement and compliance by their sales team in demand planning, you’ll need to demonstrate the value of the process to them. What’s important to the department leader and what she or he asks about gets the attention of their direct reports.

• Tie forecast metrics to operational and financial metrics. Forecast error and forecast bias are often measured in an organization, but not everyone relates these metrics to on-time in full (OTIF), stockouts, and inventory levels that, in turn, tie to sales, cost, and cash flow. To get Sales to accept and support these metrics, it’s important to stress that such measurements are critical to improving the demand planning process and success of the sales organization and business overall.

Improving the demand planning process and fostering the culture of forecasting within Sales requires ongoing effort. We hope you find some takeaways from this article that will be helpful in your own organization!