Dear Dr. Jain,
I am am keen to know the best practices for 3 points :
1. The KRA’s (Key Result Areas) for Demand Planners regarding: areas of responsibilities, weighting % for each KRA, measurement criteria/KPIs , goals and targets, and action plans to give expected results of these KRAs.
2. ROI of a Demand Planner in terms of bottom line profit.
3. Specific roles and responsibilities of Demand Planners as opposed to Supply Planners and other roles.
Supply Chain Planning Manager at a multinational chemical company
a) The key responsibilities of a Demand Planner is to manage forecasts, which are often prepared through a consensus process; and manage demand, which is often done through the Sales & Operations Planning (S&OP) process.
b) Both activities—running consensus and S&OP processes— are equally important, and should thus be weighed equally.
c) KPIs used the most are amount of inventory held, customer service, margin, total revenue, market share, etc.
d) Goals/targets vary from industry to industry, company to company. It may be expressed in terms of total profit, total revenue, forecast accuracy, inventory level, customer service, etc.
e) Manage correctly both the consensus and S&OP processes.
2. It is difficult to measure precisely ROI resulting from a Demand Planner. One can get some idea by looking at the improvement in total sales and profit, inventory level, customer service, etc.
3. Demand Planners won’t be able to do their job well unless:
- All functions work together, not in a silo, and do what is good for the company, and not for a specific function.
- Senior management fully supports the role and the S&OP process.
- There is complete transparency where everything is on a radar screen so everyone knows what is going on.
- Metrics are in place to measure the performance.
I hope this helps.
Dr. Chaman Jain,
St. John’s University