Advertisement

Blog

Supply Chain: How Much Can Sales Be Trusted?

I recently attended a Sales and Operation Planning (S&OP) conference where a discussion on how to efficiently launch Integrated Business Planning (IBP) within an organization quickly went from lively to intense when the conversation turned to the onboarding of the sales team into the process.

Since integrated planning extends S&OP into customers/suppliers, sales people are clearly a crucial downstream link that can aid in making sure that the connections with customers are the right ones, and the information received is valid. However, in a room full of supply chain specialists, the appreciation for the sales' role in the process was not universally shared.

Some round table participants felt that sales team members needed to understand profitability and should focus their time on forecast accuracy. It was even suggested that sales be compensated based on their forecast accuracy. Others contended that sales should be removed from the process, and the supply chain team should talk directly to customers.

As one of only a select few individuals in the room willing to admit to having a background in sales, I was compelled to speak up. So, I stood up and told the audience that I thought that the idea of measuring sales on forecast accuracy was like evaluating the weather man based on the number of days of sunshine in a month. Instead of second-guessing their colleagues in sales, these supply chain professionals should welcome their inputs. The sales team is key to translating customer demand for the enterprise and they are a valuable source for economic intelligence. At the same time, it is important for sales people to stop thinking of the supply chain group as the “business prevention squad!”

The bottom line for every organization is determining what the customer wants. On the supply chain side, short and accurate lead times are definite customer priorities. It is useless to throw forecast (in)accuracy in their face every time we have a problem, as it will only create the perception that we are creating excuses for our inability to deliver.

I believe that the sales team plays an important part of the Integrated Business Planning process. To successfully incorporate sales people into this process, supply chain professionals need to do three things:

  1. Educate themselves about customers' needs.
  2. Give credit to the sales team and respect their judgment.
  3. Openly share the limits the supply chain is facing and the compromises that need to be arbitrated.

IBP and supply chain efficiency are directly related to the quality of the collaboration between sales and supply chain teams.

6 comments on “Supply Chain: How Much Can Sales Be Trusted?

  1. Eldredge
    February 6, 2014

    Isn't 'forecast accuracy' an oxymoron?

  2. _hm
    February 8, 2014

    First supply chain should ask themselves how mush are they trustworthy for delivery of goods? (Even in ideal conditions).

    Both sales and supply chain lacks in effort and they pretty much rationalize it with top management. And if they do not agree, they delay project more or reduce sales.

     

     

     

  3. Ashu001
    February 10, 2014

    Rich,

    LOL!!!

    My personal feeling is that they don't like Contrarian Thinkers in most Companies today(more like Yes-Men).

    Any contrarian Thinker like the Speaker here tends to get the short-shrift.

  4. ahdand
    February 11, 2014

    @techforpeople: So you mean to say that you do need people who can challenge the management in operational issues is it ? I think it's a good move. Then the new ideas will pop-up in different ways.       

  5. Ashu001
    February 11, 2014

    Nimantha,

    That is precisely what I had in mind here!

    You always need Different/Contrarian Thoughts especially when your Company/Business is going through a rough phase.

    In such a situation you need somebody who is willing to think outside the Box to make things happen differently.

    I am sure you remember the Definition of Insanity-

    Its doing the same Thing Over and Over and Over again and expecting Different results.

    This is where Yes-Men Don't work.

     

  6. DavidHamilton
    July 24, 2018

    Let's not talk about customer service here – the aim of sales people is to help a company make money after all. Ethics and all of that are secondary. The worst thing is that despite there being agencies that the government has put in place to make sure that there can be a little bit of restitution if customers are being swindled by dishonest sales people, who really goes through the hassle?. 

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.