A reenergized demand plan is fortified with meaningful data trends that point the way to improved service levels and increased profit margins.
Sales and operations planning, also known as S&OP or SIOP (to include inventory) processes are key to improving service levels, accelerating cash flow and increasing margins. Thus, it is worth pursuing the seemingly simple process of aligning demand and supply and your executive team on one plan. It must start with the demand plan.
- Talk with customers – it is surprising how often this secret to success is overlooked and not utilized. Your customers will provide a wealth of information if you ask.
- Review the data for trends – don’t get sucked into the data black hole! Instead, review data for trends. Are sales increasing in a certain area or product line? It will give you follow-up items to discuss with your customers.
- Focus on exceptions – one of the advantages of a forecasting system is that it will typically point out exceptions which are out of tolerance. Whether your software points these out or you look for them manually, focus the 80/20 of your energy on those exceptions as it will drive results.
- Dig deeper in your supply chain – ask your customers for end user data, point of sale data or any other data which will give you a better understanding of what is occurring deeper in your supply chain. It is surprising how often it is available yet the goldmine is ignored.
- Think about the market – talk with your sales and marketing teams, research the market, and get a feel for what is likely to occur in the market. This will give you directional information for whether your demand plan is in the ballpark.