Nearly four years ago, I landed my dream job. I was named the Demand Planning Capability Manager for Global drinks giant Diageo. A few months later I arrived in HQ full of enthusiasm for transforming the Demand Planning function with an SAP APO implementation and a killer training program.
Soon after I arrived however, I started to think about what was really meant by the term ‘capability’. Was it enough to just train the planning team and give them a cutting edge forecasting tool? After some research on the topic – and some assistance from Wikipedia – I settled on a definition of Capability as ‘the sum of the expertise and the capacity to perform the desired business function’. In simple terms what this means is that an organization can have the best-trained planners and the greatest forecasting tool but if there is not enough capacity in the business to carry out the required tasks then the process won’t work as smoothly as we would really like.
When it comes to demand planning that capacity covers many functions. If we lack capacity, it simply may not be enough to merely increase the numbers of planners. Effective demand planning requires input from sales, marketing, and finance among others. If these functional areas do not value the process and assign sufficient resources then we will continue to lack capacity to complete the required tasks.
At its heart, therefore, Demand Planning Capability development aligns to the old standard of People, Process and Tools.
Do you have the right people in the role? Demand planning is increasingly more about influencing than number crunching thus we need to ensure the planners can fulfill that function.
Do you have the right organization in place? Here we need to look at whether people are doing the right tasks.
Do people have access to the right development? This covers not only technical training for the forecasting tool but also a sound understanding of Demand Planning theory and support in the softer skills like influencing. Mentoring and coaching may also fit in this space as well as access to professional certifications like CPF – Certified Professional Forecaster.
Are we focusing on the value adding activities? Are they the right activities? Demand Planning is ripe for duplication across functions. Some of this is inevitable to gain a shared understanding but we need to be vigilant that the right people are doing the right things.
Does the process have value in the business? Demand Planning needs to be an integral part of business planning. If not then it will become the silo of planners fiddling with statistical forecasts that are largely ignored by all but your production team.
Does the tool serve the process or does the process serve the tool? All too often the process becomes the servant of increasingly complex forecasting tools. It is vital that the forecasting tool adequately support the needs of the organization without overwhelming it with detailed data that adds little value.
We have a tremendous opportunity as we develop processes and planners of the future in demand planning. Yet until we fully address the Capacity with the Expertise in Capability, we will never quite get the most out of any Demand Planning process.
Sandra Labinjoh, CPF
Sandra Labinjoh is an upcoming presenter at IBF’s 2014 Supply Chain Forecasting & Planning Conference: Europe, 19-21 November 2014 at The Doubletree by Hilton in Amsterdam. She is IBF Certified and an independent Supply Chain consultant with over 15 years’ international experience in Demand and Supply planning and Customer Service.