Forecasting And Sales & Operations Planning: Synergy In Action

FORECASTING AND SALES & OPERATIONS PLANNING: SYNERGY IN ACTION By Tom Wallace Adversarial relationships that existed between the commercial side of the business (Sales and Marketing) and the operations side of business (Production, Distribution, and Purchasing) are changing for the better … S&OP process yields one number forecast … bias is almost always caused by how people are compensated and recognized for their performance, which lies outside the forecasting process. Before we get into the specifics of how sales forecasting and Sales & Operations Planning (S&OP) are mutually beneficial, we need to get a bit of history under our belts. So please bear with me for a moment while I take a quick trip down memory lane. BACK IN THE DARK AGES I got my feet wet in the forecasting business about 40 years ago. I was the supervisor of the sales forecasting and planning group at a sporting goods manufacturer. We had: • Over 10,000 SKUs (with sizes, colors, grades, and so forth), • A fiercely seasonal business (we didn’t sell many football shoes in February nor did we sell many baseball uniforms in September), and • No tools (unless you consider a mechanical calculator a tool). ...