So you’ve been tasked with implementing or improving S&OP or IBP. Where do you start? What does the Commercial function really need from S&OP? What must Demand Planners and Forecasters do to drive value across the whole business? Luckily for anyone implementing S&OP or IBP, the critical success factors (CSFs) are well codified. Here is a quick-start guide on how to implement S&OP.


Process: A robust S&OP process description which is deployed with discipline and consistency.

Systems: Providing effective and well-integrated systems to facilitate execution of a regular monthly planning cycle.

People: Building capability across the enterprise functions and creating the organizational structures and teams to leverage this capability.

Mindsets & Behaviours: Creating alignment on the goals of the S&OP process and sustaining the engagement of all the various cross-functional stakeholders to drive an impactful enterprise process.

Lesson 1: Demand Planners And Forecasters Need To Be More Than Back Office Number Crunchers

Discussion on the role of demand forecasters and planners in delivering these CSFs is almost always limited to the first three themes. These key positions are often perceived as technical specialist, back-office roles. It is clearly correct that demand forecasters have a key role in providing process expertise, leveraging the value of IT systems and bringing individual analytical capability to the S&OP process. However, they have the potential to have a much broader impact on enterprise S&OP/IBP.

A confident and robust forecasting capability can have a very significant effect on one of the most challenging requirements for great S&OP/IBP – strong cross-functional engagement.  A key reason for failing to deliver this engagement is the perception (most often in the commercial function) that S&OP is an administrative, back-office process to manage the supply chain. Forecasters and planners have an important role to play in changing both the perception and reality of this situation through their interaction with other functions and the breadth of their contribution.

When operating at the top of their game, the forecaster needs to be able to challenge their commercial counterparts.

The 4 Things Demand Planners And Forecasters Must Deliver

As a commercial leader I experienced a very similar context with market research and business analysis teams and their relationship with marketing and sales teams. They were frequently seen as ‘number-crunchers’ providing data in response to a specific question or need but lacking the broader business insight. This reduced their potential to add value to business decision-making, resulting in sub-optimal decisions. In order to address this, I developed a simple description of the expectations of market researchers and analysts and I present this below, along with a brief explanation tailored to the case of demand forecasters and planners in S&OP/IBP:


Figure 1 – Four Levels of Delivery for the Demand Forecaster/Planner

How to implement S&OP

The 4 requirements of Demand Planners and Forecasters are underpinned by technical knowledge but any number crunching must facilitate proactive discussion and decision making.

Level 1: Accuracy

This is the foundation for the forecasters’ contribution. Basic confidence and credibility is built upon regular, reliable provision of accurate data. This is sometimes seen as the limit of what forecasters can or should do.

Level 2: Insight

Once accurate and reliable data is provided, a key role for the planner is to turn the data into insight. This requires a good understanding of the business context, its key drivers and how the data fits with these. A forecaster that provides compelling context and narrative in addition to the data will engage cross-functional partners much more readily.

Level 3: Proactivity

A key next progression for the forecaster or planner is to proactively apply their insight and business awareness in order to ask ‘what if’ questions and be prepared to address these. By thinking through what the likely commercial reaction will be to provision of some core data, it is likely that the forecaster can pre-empt these questions through further analysis. Driving a discussion with the commercial team armed with this preparation positions the forecaster as a key partner, not a reactive back-office number-cruncher.

Level 4: Challenge

Perhaps the most difficult step in this model beyond Proactivity is to bring challenge to cross-functional partners in the S&OP process. This is, however, a critical capability in order to build credibility and genuine partnership. When operating at the top of their game, the forecaster needs to be able to challenge their commercial counterparts (who are often at more senior grade levels in the business). This applies most often to the process of agreeing a consensus forecast in the demand review stage of S&OP.

The 4 Capabilities Demand Planners & Forecasters Need

So what does this mean for the capability requirement for demand forecasters and planners?  In order to meet the expectations outlined above, there are four key areas of development:

1. Functional Expertise

The foundational technical skills for a forecaster or planner include analytical and numerical skills, statistical techniques and systems knowledge, and the judgement to select the most appropriate of these to overcome problems in supply chain and the broader organization. This is, of course, a critical foundation but broadening capability beyond this functional expertise is critical in order to pursue the higher levels of business value (see levels 2-4 shown in Figure 1).

Without the understanding of business context, the output generated by the forecaster can only ever be provided as data.

2. Business Understanding

This is the awareness and understanding of the business strategy and how this translates to the specific goals of not only supply chain, but also those of the commercial (Sales and Marketing) function. This understanding then enables the forecaster to interpret data and analysis in terms of its business significance. This is the starting point for creating Insight (Level 1) – without the understanding of business context, the output generated by the forecaster can only ever be provided as data. Higher levels of capability in business understanding allow the forecaster to add more and more value to the enterprise process, culminating in the ability to proactively explore other relevant areas of analysis or to challenge cross-functional stakeholders in their interpretation and application of forecasting and planning inputs.

3. Mindset & Leadership Behaviours

These are the mindset and behaviours needed to leverage the functional expertise and business understanding outlined above. From a mindset perspective, this includes having a strong conviction in the value of the supply chain in driving business success and the need to work as an equal partner with cross-functional stakeholders to realise this. Proactively acting on a positive mindset in these areas is much more likely to lead to enhanced cross-functional working than waiting to be invited to influence decisions in forecasting and planning. On leadership behaviours, key elements are skills in challenging and influencing and also in ‘storytelling’ (creating compelling narratives with clear recommendations). These higher-level mindsets and behaviours are essential for Level 4 delivery outlined in Figure 1. They allow the forecaster to greatly leverage the more traditional functional skills and to be seen as an invaluable enterprise resource in the development and execution of company strategy.

4. Building Networks

These are the ability to develop and leverage both internal and external networks to add value to the forecaster’s contribution. Examples of external networks would be to gather best practice from outside the organization and to use this insight to enhance current and future practice. This can help the forecaster or planner to develop capability across all four proposed levels of delivery. Internal networks provide an excellent opportunity not only to maintain consistency on process execution but also to drive continuous improvement. This is often used to share learning and form communities of practice around particular processes or systems in use in an organisation. However, further value can be created when forecasters share learning and facilitate each others’ development in the softer, behavioural aspects of their role (how to build productive relationships with commercial colleagues, how to challenge senior staff in forecasting discussions etc.).

Bottom Line: Every Function & Process Must Support Cross-Functional Collaboration

So what does this mean for businesses wanting to leverage the contribution of forecasters and planners? As outlined above, these roles can deliver value, not only for their traditional narrow role in providing data and analysis, but more broadly in proactively providing the great insight and proactive challenge that creates a great cross-functional S&OP/IBP process. In order to tap into this great enhancement route for S&OP/IBP, development programmes are required that go beyond the traditional boundaries of technical skills.

This requires broader recognition of the enterprise value created by the highest level of professional capability in forecasting and planning. This recognition then needs to be backed with investment in the targeted development of forecasters and planners in leadership behaviours and mindsets and in the creation of internal networks, underpinned by a supportive culture and appropriate reward and  recognition structures. Organizations that invest in this capability will not only create a competitive advantage in today’s market but will also start to build the key competencies required to fully exploit the various technological enablers for forecasting being explored in supply chain digitalization.