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:
- Educate themselves about customers' needs.
- Give credit to the sales team and respect their judgment.
- 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.