Demand Planning and Forecasting is about people, process, and technology. Unfortunately, the people element is often forgotten. As supply chains evolve to become more demand-driven, the Demand Planning role also needs to evolve – and that means that companies must focus on creating and maintaining a talent strategy. What we need to do is hire ‘artists’ and ‘scientists’. We must define their roles and responsibilities, give them the right training and opportunities, and measure their performance.

For the demand planning function to succeed, organizations must have in place:

• • Strong talent based on core competencies
  • Right career-path culture and visibility within the organization
  • Proper training and development
  • True performance-based management

Give Up Trying To Find The Demand Planning Unicorns

Demand Planning and Forecasting roles are not created equal. A good Demand Planner will have strong analytical and critical thinking skills and a broad understanding of end to-end supply chain functions, while excelling in a core competency, or holding subject matter expertise. According to a survey conducted by Supply Chain Insights, a Demand Planner is the second hardest supply chain role to fill in an organization, followed closely by Director of Supply Chain Planning, Manager of S&OP, and Supply Planner. The reason for this is pretty straightforward; historically, organizations have looked for an individual who is analytically minded yet can still deal with ambiguity and relate to people. They seek that rare unicorn who has the seemingly contradictory ability to make sense of the data, then sit in front of Sales and Marketing and speak their language.

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That is not an easy combination to find. What they end up with is the Jack of All Trades but Master of None. An organization may be better off building a team of focused individual skillsets that complement each other. Understanding the needs of the department and skills of the people allows us to structure roles to around the expertise of each individual and better serve the needs of the department.

Master of Science (Demand Analyst)

This could be a more centralized role in many companies where one would generally be responsible for generating a statistical baseline forecast. People in this role are mostly analytical with less interaction and inputs required to create a final forecast output. A such, they are capable of managing more SKUs. The Demand Analyst may be the go-to person to provide ad hoc analysis in support of other functional areas with deeper statistical analysis. Many companies that are creating Centers of Forecasting Excellence are staffing primarily with analysts as opposed to traditional planners.

Master of Art (Demand Planner)

The goal here is to refine a statistical baseline forecast. This person would be less reliant on statistical skills but has a deep understanding of interdependence. Demand Planners can work with the commercial teams, running ‘what if’ simulations to adjust the forecasts based on data, analytics, and domain knowledge. The ideal planner asks the right questions at regular meetings with Sales and Marketing and instils a sense of partnership with them. As supply chains and companies evolve, specialized roles may be introduced to the Demand Planning function. For example, companies at higher stages of maturity may create a more senior role tasked with representing Demand Planning in broader supply chain transformation initiatives. The advancement of an S&OP process may require the leadership and support of an S&OP coordinator. Product Lifecycle Management (PLM) could require either deep analytics to support other areas in the organization or a Launch Leader (Product Innovation Planner) role that is highly collaborative.

Measure Accuracy And Performance

We all know or have heard that forecasting is a brutal job. There is a perception that Demand Planning is the punching bag of the S&OP process. How often have we heard that Demand Planners are always wrong?! And in reality, the closer they are to getting it right, the more likely it is that somebody else will take credit for those results. With this in mind, Demand Planning leaders should expand the scope of criteria that planners are evaluated against. This should really go back to the core competencies of the planner and the value they add to the forecasting process.

One way many leading organizations are measuring this is with Forecast Value Add (FVA%). The FVA% concept is designed to determine which, if any, steps in the forecasting process – particularly those steps conducted by practitioners – improve forecast accuracy, and which do not. This can be used to evaluate an analyst-generated statistical baseline model against a naïve forecast or the effectiveness of a planner’s overrides to that baseline. This helps the individual practitioner to better understand their individual impact on the collaborative process and provides feedback on their contribution so they can improve. This helps the company to better identify the drivers to forecast accuracy and measure the inputs and process rather than just the variability. Performances metrics should include effective collaboration with stakeholders, oral communication and conceptual thinking. [Ed: See this article on incorporating FVA analysis in your organization]

Build Pathways For Demand Planners

Leading companies also understand the importance of people and do a really nice job in creating a career path for their employees. When a new employee joins the organization, they meet with that individual to not only identify the expectations of the role over the short term, but they also discuss the individual’s long-term goals. Often these goals include the individual’s interest to move up or across the organization. Leading managers look for opportunities to get the individuals exposure to their interests through cross-functional projects or by encouraging participation in relevant meetings. That way, when the role does open up, the individual is ready. When done correctly, the individuals are incentivized to deliver results in order to prove they are ready for the next step, and the company continues to groom leaders. When done properly, with talent based on core competencies, the right culture, proper training, and performance-based management, companies become their own ‘recruiting factory’. They constantly produce top talent and improve its forecasting ability and accuracy.

This article first appeared in the Journal of Business Forecasting Spring 2016 issue, written by Eric Wilson CPF and Jason Breault. To gain access to the Journal Of Business Forecasting and a host of other benefits, become an IBF member today.

Joy White

Panel discussions are most interesting when the panelists represent similar disciplines across a variety of industries. At the recent IBF Conference in Scottsdale, each of the 4 panelists were asked about various aspects of the planning process within their respective organizations. The range of topics included the single forecast plan (the one number plan), execution of the plan, use of metrics, frequency of the S&OP review and, of course, talent within the organization. There appeared to be a great deal of commonality and agreement on the various business approaches between the respective organizations. As we might expect, the degree of integration and frequency varied. Importantly, they all shared a very similar view regarding the “perfect candidate profile” and the increasing need for these individuals to develop and exhibit strong leadership skills.

In today’s highly competitive workplace, questions regarding the “perfect candidate profile” are always intriguing. The varying demographics of the workforce, coupled with the increasing use and sophistication of technology and the required “speed to market” make the “perfect candidate profile” an interesting discussion.  Of course in our field of business forecasting and demand planning, we know that sound analysis and mathematical skills are a prerequisite for success. However, the panelists resoundingly agreed that the number one skill required for success is the ability to lead and to confidently influence across the organization, and this ability requires “soft skills”.   It was also acknowledged that these so-called “soft skills” were not necessarily an innate attribute and required training and development. Randy Wilp, Leader of Global Commercial Forecasting at Merck & Co. Inc shared his experience utilizing an outside organizational behavior coach in his effort to build and foster the communication and “soft skills” of his team.

In my own prior experience with managing large inventory planning teams, it has been critical to the success of my organization to be able to not only build a solid forecast and replenishment strategy, but also to be able to communicate this plan to the appropriate business partners. The successful communication and “buy-in” lead to the best execution. This required the planners to be able to communicate their forecasts and plans in easy to understand terms, while clearly articulating the business benefits.  It is usually best to save the “geek speak” for like-minded peers.

As forecasting and planning organizations begin to take on a more front and center role within organizations, should we begin to consider the aspects of more robust leadership training? There is a recent post regarding new trends in Supply Chain Management Review which discusses preparing students for the work world in a pragmatic way. Perhaps it is also time to give greater consideration to the “soft skill” and leadership development as well. What are your thoughts?

Joy White
Supply Chain Leader
IBF Ambassador

At the IBF, we realize that executives are faced with unprecedented pressures to react quickly and maintain a healthy company track record, despite rising costs, shrinking margins, and lack of loyalty from customers. With a proliferation of new products in the marketplace, shorter product life-cycles, the difficulties in succeeding has become even greater. For many product launches, companies have only one shot to get it right because of their shrinking life spans. The need for speed and accuracy is forcing us to look for new ways to make the right decisions, develop more efficient and responsive supply chains, and manage risk and volatility. As a result, companies are searching for the demand signals that can provide a clearer picture on how the business is doing at a given point in time.

Questions arise, do we have the right people to capture and analyze the signals? What signals are available that should be considered? What technology solutions and customizations are needed to be successful? What talent development programs are needed to produce the right people for these roles? What organizational structures and career tracks are needed to retain such talent? And what process advancements and collaborative activities, both inside and outside the organization, are needed to help us to become market leaders for today and tomorrow? And of course, where do you begin?

Well, it begins by stepping outside your organization and learning from other leadership teams that have led their companies to success. You will find these teams at IBF’s upcoming “Leadership Business Planning & Forecasting Forum,” taking place in Orlando, Florida USA on October 22, 2012. This premier executive forum is geared towards professionals like yourself, engaged in higher levels of responsibilities and those that work with them.

Executive Discussion Streams Include:

✲ How to leverage Integrated Demand Signals and Systems
✲ What kind of Talent Management and Organizational Design do we need today
✲ The future advances in Sales and Operations Planning (S&OP)

Distinguished Panelists:

• Michael Wachtel, Vice President Demand Planning, L’OREAL
• John Gallucci, Senior Director of Planning, PINNACLE FOODS
• Cliff Engle, Senior Vice President Global Supply Chain, FENDER MUSICAL INSTRUMENTS
• Mark Kremblewski, Global Business Process Expert – Demand Planning, PROCTER & GAMBLE
• Grant Hoffman, CPF, Sr. Director of Global Planning & Operations, MOTOROLA MOBILITY/ GOOGLE
• Rick Davis, Vice President Business Planning, KELLOGG’S
• Jonathon Karelse, VP – Strategic Planning and Corporate Development,WHOLESALE TIRE DISTRIBUTORS
• Michael Vincitorio, Senior Director Demand Management / S&OP, OFFICE DEPOT
• Rizwan Asim, Director of Supply Chain. MCDONALDS
• Mike Pechtel, Director of Strategy, Planning & Operations, WHIRLPOOL CORPORATION
• Patrick Bower, Sr. Director, Corporate Planning & Customer Service, COMBE INCORPORATED
• Rafal Porzucek, Global Process Leader for Demand Planning, PROCTER & GAMBLE
• Trevor Miles, Vice President, Thought Leader, KINAXIS
• Lora Cecere, Founder, SUPPLY CHAIN INSIGHTS
• Larry Lapide, Researcher, MIT

Of course, there will be the right balance of learning, networking, and fun. Attendees will have an opportunity to network with key executives at our evening BBQ dinner. A lesson or contact that you pick up during a face to face conversation may prove invaluable in the future, along with the solutions discussed during the informative sessions.

We invite you to attend and boost your organizations success by attending the IBF’s Leadership Forum — the only program of its kind with a diverse group of demand planning, forecasting, and supply chain leaders in attendance.

I look forward to seeing you in Orlando!

Kind Regards,
Anish Jain
Managing Director
Institute of Business Forecasting & Planning – IBF

Save by bringing groups! Additionally, have your team attend our “Supply Chain Planning & Forecasting: Best Practices Conference” taking place the day after the Leadership Forum, October 23-24, 2012. Details can be found here: www.ibf.org/1210.cfm