What is in it for me? Asks my Sales Head
Demand planners who are setting up a new S&OP process or are trying to involve sales team into planning process often face a lack of expected enthusiasm from the sales team and this is usually interpreted as resistance to change or lack of their willingness to commit to demand plan. From the supply chain-planning perspective, the involvement of sale is important for them to improve upon the process. The major concern for the planner is how to convince the sales team about the benefits of the S&OP process which are numerous.
However, often times it is observed that this resistance appears to be so due to lack of ability of the planning team to showcase the benefits of the process to the sales team. This stems from the discussion which seems to focus mostly on the benefits to the supply chain team and hence the question, what is in it for me? Legitimizing the question we hereby attempt to help the planners with the right response and to articulate a win-win situation, which truly is the case.
- Demand planning helps in achieving sales targets
This reason alone is good enough to answer the question and does not really require a long explanation. Sales forecasts are first to indicate if things are going as per the sales plan or whether the customers have another plan in mind. This helps the team to come down the ivory tower and work on the strategies to meet the target before its too late.
- Higher customer service levels
By participating in the demand planning or S&OP process, the sales team allows itself an opportunity to correct the forecast and hence automatically the supply situation. This is a proactive self-help that otherwise comes in a form of escalation and usually post the loss of sales (and unfortunately, the target). Sales team is company’s eyes and ears in the market and hence most times in a better position to make any corrections in the statistically generated forecast. The team can help correct the forecast in situations that may be driven by current market reality and hence would buck the statistical trend for a product or location. Since the forecasts are used for supply planning, this correction helps in automatically correcting the supply.
- Power sales team with data in understanding customer preferences
Working closely with planners’ helps the sales team either understand the trends and patterns in the demand and hence detect any changes therein quickly. This is also referred to as demand sensing in modern-day planning. This is invaluable information that arms the sales team to be proactive in the market and react to change in customer preferences faster than the competition.
- Improved customer relationship management
No customer likes to be denied the product after being promised. Repeated such instances form a reputation and likely loss of demand. This usually results in a lot of heartburn and blame game internally within an organization. The bigger loss for the company is the loss of credibility and reputation. Sales participation in the planning process gives them the opportunity to be aware of the upcoming supply shortages, the reasons for same and normalcy restoration time frame. This, in turn, allows them to not only set customer expectation upfront but more importantly work on the substitution strategies, to create a win-win situation for the customer and themselves. This is a huge benefit, which not only saves the potential loss of sales but also generates goodwill both for the company as well as the sales rep who faces the customer. As an additional outcome, the attrition rate in the sales team may go down as well.
- Shape the demand effectively
Working closely with planning and other teams like marketing in an S&OP process helps the sales team contribute better to demand shaping events like promotions and offers. It also allows them to understand the effect of these events better by working with the planners on what-if analysis. They can also offer inputs to the marketing team on the timing and portfolio of the offer. On the other hand, they can work with the supply team on the ironing out any supply-related issues that can hamper the planned event.
As discussed above, the benefits are not limited to supply chain function and in fact, have better benefits for the sales team to participate in the planning process. If these benefits are presented well while discussing with the sales head, you may well end up changing the question to “when do we start?”