Jenna Seymour, Director of Demand Supply at Dell, explains how to gain the consensus in your demand planning and S&OP process. Speak the language of your Audience, understand your Product, and Execute on your commitments. Do this to not only build trust but to bring other functional leaders into a shared, enterprise success.
You are all familiar with the challenges of demand planning; sitting in the middle of what I like to call “chaos”. Inputs coming from every direction while satisfying Sales’ highest expectations to sell the world and Procurement’s demand for low inventory…not to mention margin and revenue goals from Finance.
Pulling together the many cross-functional teams required for demand consensus is a bit of an art. You have the data, trends, goals, risk analysis but how do you deliver those items with a clear message that everyone will agree upon? Let me help you build that foundation with the below three keys:
- Audience: bridge the communication gap with a common language
- Product: understand form, fit and function with the ability to bridge risk to cost
- Execution: say what you do and do what you say to gain and maintain trust
Mastering these areas will gain your team respect as well as a seat at the table to influence demand.
Audience to Gaining Consensus
The first rule of gaining consensus is by aligning an audience is to speak a common language. I guarantee you will lose people’s attention like a bad comedian if you start talking supply chain lingo: days of inventory, exponential smoothing, forecast accuracy, seasonality index, attainment…you might as well be speaking Klingon. Take a minute to translate and create a story that you know they will understand and care about. Finance that might be the dollar impact, for Sales, it might be customer satisfaction. Hit them where it hurts. Make your point clear and unmistakable. Use high-level visuals – a chart, for example, showing the fewest data points possible to make your case.
If your topic is high visibility, then reach out to your key cross-functional team members and pre-wire them for the situation. The worst possible scenario is to blindside them in an S&OP meeting when they were not even aware there was a problem. Who has time for that prep work? You do! If you find the time to build these relationships and have a quick conversation, your S&OP meeting or business reviews will be much smoother and in the end will prevent the need for additional drill-down meetings after the initial shock.
Winning your audience with consistently clear communication gets your foot in the door. Now let’s follow that up with strong product knowledge.
Product to Gaining Consensus
A big part of demand planning is identifying and dealing with risk. It is essential to know your product’s form, fit and function to truly understand inputs, outputs and everything in between. Consider painting a ‘risk picture’ on a blank canvas. You must first build the foundation. You have to identify key items which bring you to the root of your conversation or suggested demand shaping. These might include:
- Lifecycle State: new product introduction, sustaining, end of life
- Target Market: is this a proven market for your business, are there competitors at play
- New Form Factor: is this item a brand new offering/style/technology
- Predecessor performance: have we offered something similar in the past and what were the results
- Manufacturing or sourcing constraints or strategies: Tier I/II/III vendors, single or multiple sources, manufacturing capacity, and yield
- Lead-time: longest component versus shortest component
- Unique attributes: special manufacturing techniques, single-use components
- Logistics: are you dealing with ocean, rail, air
- Historical sales: seasonality, weekly phasing, week/week or month/month trends
All of this information will help you to point out the most intricate details. You can explain the history, initial assumptions, what went wrong and what is going right. You can also address competitor moves or market trends in that space. This is how you portray that a closed loop investigation has occurred and introduce the risks identified along with proposed solutions.
To put the finishing touches on your masterpiece you must be able to show the cost of the risk you have identified. If you can show what the cost impact is at different thresholds of demand attainment, then you surely gain an attentive audience. You might show something similar to the chart below with expected costs based on over attainment or under-attainment. This is not as easily calculated as defender-attainment the loss of a customer or relationship is worth. It’s much more than a simple equation.
Execution to Gaining Consensus
Your hard work on storytelling is useless without execution to the agreed upon plan. You can pull your organization out of a continuity of supply issue or find a way to sell excess inventory to a third party 100 times. But what they will remember is the one time you made a commitment and did not execute.
Don’t panic! We all face issues out of our control and cannot win all of the time, but you can always ensure a steady, open and honest communication path. If you are on course, let them know. If you are slightly off course or ahead of course, let them know. If the sky is falling…well…identify the root cause, create a mitigation plan with a few options and clearly assess best, worst and likely outcomes, and then let them know.
When you communicate everything (good and not so good) then you gain trust. Trust is a direct driver to speed and cost per Stephen M. R. Covey in the book “The Speed of Trust”. Once you break trust, whether personally or in association with the organization, the cost goes up and the speed of decision making goes down.
Celebrate your wins and mourn the losses, but always review the lessons learned. Show you are committed to more than this specific situation, task or instance. Talk about what worked, what holds opportunity and what you would do differently next time. This follow-through will not only keep trust but it will build it, not to mention allowing for key team members who helped in the execution to get some much-needed visibility.
In summary, the three keys to consensus planning (Audience, Product, and Execution) will allow you to speak the same language as stakeholders, develop and tell the story with projected impacts and build/maintain trust across the organization. The next time you have an item to bring to your S&OP or business review, try building your communication based on this model to see if it is better received. Don’t forget to pre-wire your audience, tell the story and plan for execution.