Demand / Sales Planning (Forecasting)
Sales or Demand planning (forecasting) is arguably the most critical business requirement to support the business as a whole. Utilising an agreed forecast, the business can plan more effectively. This can be such things as inventory policies, operational capacities, skills requirements to cash-flow etc..
When determining the sales plan, it is essential that all factors that will impacts on sales levels & distribution are identified and incorporated accordingly. Thus on top of any statistical analysis, overlaying inputs from commercial & wider supply chain teams is key to its success.
Finance will need to understand the rationale behind any sales plans. This will allow finance to be able to budget the ongoing financials of the business.
Too many businesses rely on a purely statistical analysis. This inevitably leads to not only mistrust of the forecast, but lead to a plethora of issues across the operation that have not been effectively planned for. A further danger here, is that individual business functions will go their separate ways in managing / interpreting the sales plans.
What Purely can do with you
An effective sales forecast, can only be achieved through a robust and sustainable demand planning process (incorporated into an S&OP process).
As well as being robust & sustainable the process needs to be timely & dynamic for all interested and participating functions, leading to business buy in.
A baseline expectation needs to be created, before applying commercial and other environmental steers, e.g. Bank Holidays, business intelligence and so on. Commercial inputs range from delists to launches, to range changes, to distribution changes, to promotional / marketing activity etc..
Reviewing capacity constraints, whether operational, warehouse, inventory or logistical will be addressed within the S&OP process.
NOTE: Commercial activity that will affect sales profile’s, will need to be at least at headline level, be signed off and agreed that in principle the activity is possible.
Where Purely can help you in your business is with;
- Evaluating and building / amending your processes for your needs.
- Systems, methodology & procedural design & implementation.
- Seasonality / environmental impacts sales planning
- Implementation of relative metrics / KPI’s such as FC accuracy, MAPE etc.
- Ensuring that outcomes are fit for purpose for all functions, planning, finance etc.