The forecast for tomorrow is...

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The forecast for tomorrow is...
Of all supply chain planning processes, sales forecasting often causes the biggest headaches.Ideally, everyone should work from the same numbers,...

Of all supply chain planning processes, sales forecasting often causes the biggest headaches.

Ideally, everyone should work from the same numbers, sales forecasts, capacity and replenishment plans. No second guessing. No over-writing. This may only be a concept, but the need to achieve it has never been more urgent.

It means taking the ownership of forecasting away from sales staff and handing it to a more objective figure: the demand planner. Sales personnel see forecasting as an administrative task that does not fit in with their meaning of life: to be out there, selling.

Yet businesses implementing the role of demand planning realise sales people are reluctant to let go of the process. Suddenly, they feel they can no longer control the forecast. Their main role is now just to input their knowledge into the process, while the demand planner takes an independent view, asks questions, challenges data, and exposes assumptions. As a result, sales people seem to struggle with the change.

But that doesn't mean sales staff are the bad guys. Where genuine effort has been made to clarify roles and implement detailed process steps, there's a lot of cooperation. We tend to assume the sales director will dismiss a workshop that seeks to define 'the new six-step forecasting process', maybe because the content was not really designed for a cross-functional audience. Answer the question 'what's in it for sales?' and you will start to see a shift.

If you're more advanced, this change will be part of a growing sales and operations planning process. The concept takes common plans to a continuous and true collaborative level. It also means compromising.

So, while you focus on improving the forecast accuracy, make sure you put as much effort into getting the organisational part working. After all, what's the point of producing an accurate forecast that everybody ignores.

Hugh Williams is founder of supply chain specialist consultancy Hughenden. www.hughenden.net

Related topics: Supply Chain, IT, Services

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