The Demand Planning Process in Executive S&OP

THE DEMAND PLANNiNG PrOCESS iN ExECuTivE S&OP By Tom Wallace and Bob Stahl Demand planning can be the most difficult yet the most important element in the entire Executive S&OP process ... for financial purposes as well as for operational validity, forecasts should be prepared first at a volume level rather than at a mix level ... there is a defined process for demand planning within the Executive S&OP framework. • The Merchandising folks think primarily in terms of which items will be promoted and when, the “product” view. This view is frequently quite granular at the SKU level. • In that type of environment the most difficult task is to reconcile. Here’s the potentially hard part: these three different views must be reconciled into one single agreed-upon sales forecast, which is reviewed and authorized by the senior sales and marketing executive(s). However, in a smaller company where the functions of sales, marketing, merchandising, etc., are combined into one department under one executive, this need not be a major challenge. In larger organizations that have this kind of organizational structure, it can be the toughest part of the entire implementation. Treat this ...