As long as I can remember, senior management within consumer products manufacturers have talked about achieving a working framework for sales planning and forecasting providing ‘visibility and transparency’ (V&T) of the planning processes and outcomes to all teams within an enterprise. Keeping marketing, consumer research, finance, operations, supply chain and partners informed on key volume and trade spend forecast information enable the enterprise to be as efficient as possible, while also allowing for optimal execution across all teams.
I’ve worked on solutions and business process redesign efforts for numerous CP manufacturers in which achieving V&T was a critical aspect of going through implementation(s). Often, I’ve discovered that once these projects have been completed and internal teams can see the Sales department’s planning and forecasting decisions, as well as its execution and performance results, Sales becomes uncomfortable with its decisions laid bare before the enterprise teams.
I ask myself, “Why does this happen?”
The client requested V&T because they knew the impact of making holistic, quicker, more intelligent decisions that V&T would provide, but now, they’re nervous that others within the enterprise may question their decision-making processes given how the “plan” performed.
What are the causes for this response/reaction? In my opinion, there are several which each manufacturer must work through to make V&T a critical cog in their day-to-day behavior:
- First and foremost, enterprise must look at the Sales forecast as a “starting point from which to make decisions throughout the annual/period cycle.” I have yet to see any manufacturer hit their initial forecast as originally planned. What’s important is that as the forecast develops, teams can make timely adjustments, improving their chances to deliver as close as possible to the original estimate. It’s a ‘living target.’
- Second, other enterprise teams must accept that the forecast is simply a guidepost to incorporate their planning decisions and execution behavior, knowing that the forecast will change due to actual execution and competitive threats. Managing inventory, market share growth, consumer response, financial liability and P&L accountability will be driven by solid, up-to-date Sales estimates throughout the year, requiring each team understands the latest estimate (LE) process and timing of the Sales team’s engagement. Now, forecast changes are expected and utilized across each teams’ processes.
- Lastly, the Sales forecasting team must take accountability for/own the prediction established and modified throughout the annual cycle. Regardless of which tool produced the forecast initially, the Sales team is still the owner. People, not technology, are the decision makers, despite technology’s intelligence.
When you consider the number of channels, products, customers and Go-to-Market performance options part of the Customer Annual Planning and Execution process, it’s critical for enterprise users to keep an eye on all the moving parts.
V&T is about having the latest information available, so users can make the best possible decisions every single day. Once enterprise understands and aligns on how teams are impacted by the decisions of other functional teams, users become focused on achieving the corporate KPIs – not holding each other accountable for a dynamically changing environment.
V&T enables speed to insight, speed to decision, profitable growth. Can you handle it?