Supply Chain Resilience - Sales Planning

The sales planning process is a key input into the supply chain, providing input and direction on revenue, as well as insight into mitigation of potential planned and unplanned disruptions.

Shaping Sales Revenue

The purpose of Sales Planning for a vendor is to craft a strategy of where to target revenue

across its portfolio. Sales Plans provide direction and business goals across business units and key customers. This becomes an important signal back into a company’s demand plan, and ultimately back into the supply chain.

Vendor - Customer Partnership

The Sales Planning process can vary for a vendor, depending on the operating model and maturity of a company. At the very least, sales and marketing teams will provide qualitative insights to the supply chain team. In the most evolved processes, a vendor (in conjunction with its most important customers) may operate under Collaborative Planning, Forecasting, and Replenishment (CPFR). The CPFR process requires aligned collaboration from both parties on data, information, and decision making to decide what sales and revenue targets should be.

As a supplier, Sales Planning has become more important based on either growth or contraction of retail customers. According to data provided by the U.S. Bureau of Economic Analysis, the number of retailers are either growing (general merchandise) or decreasing (clothing and electronics). Growth or contraction of a customer base will have a clear impact on the sales planning process, as well as provide an insight to potential macro level indicators for the future. These types of disruptions are key in guiding strategy and direction, as well as building resilience for any company. Identifying all of the potential internal disruptions becomes key when creating plans.

Shared Situations

In any Sales Planning model, an internal disruption for a vendor (e.g. delays in ability to deliver product due to port strikes) has potential impacts on its customers, becoming an “external” disruptor. The opposite also holds true: any disruptors that affect a customer and its ability to buy (e.g. stores/distribution centers over capacity) will be considered an “external” disruption to a vendor. Based on these interdependencies, there is mutual benefit for both parties to share insights about foreseeable disruptions. With this shared interest, both parties should look past competing priorities - of a vendor looking to maximize instantaneous sales and revenue, and the customer to maximize sales and margin with the least amount of inventory bought. However, with the complexity of multiple supply chains and marketplace fluctuations, planned and unplanned disruptions will impact the ability to execute against any plan. In order for supply chains to respond to these disruptions, it is important that resilience is built to help minimize impacts of these disruptors.

Where to Prioritize

It’s important first and foremost for a vendor to focus on resilience within their own organization by identifying stressors and disruptors, prioritizing, and building action plans across different functions. In addition, for the sales planning process, teams should understand what disruptors are relevant to their customers. This should be accomplished by understanding their needs and/or collaborating to create a shared view. Finally, both vendors and customers should align on how disruptors will impact sales plans. Let RCSG help you with the prioritization process and identifying stressors by leveraging our supply chain resilience framework and expertise.

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