When it comes to the demand planning process, each division has its own set of goals and objectives. While the sales team may demand consistently high levels of availability in order to satisfy orders, the finance team may be more interested in inventory cost. This is compounded further when it comes to the demand planning process as there are likely to be different opinions as to what should and should not be included as part of the forecast procedure. With this in mind, how can you adopt a more encompassing approach to demand planning?
Within a business, each division has its own set of goals and objectives. While the sales team may demand consistently high levels of availability in order to satisfy orders, the finance team may be more interested in inventory cost. As a consequence, the supply chain team are under constant pressure to strike the balance between service levels and investment in stock. This is compounded further when it comes to demand planning process as there are likely to be different opinions as to what should and should not be included as part of the forecast procedure.
On one hand, if sales are in advanced talks with a hot prospect, it would be hugely disappointing if the business was unable to deliver in a timely manner due to the fact that the additional demand had not been taken into account. Equally however, if you were to respond to expected demand by increasing inventory levels, the supply chain team would no doubt face a difficult discussion with the finance team as to why there is so much excess stock. With this in mind, how can you go about developing a more collaborative approach to demand planning?