Fifteen years ago, I was entrenched in implementing demand management processes and systems across a variety of large companies. Wow, have the times changed! Back then, my Monday morning travel preparations included picking up my paper airline tickets, printing design documents, writing my appointments into my Franklin organizer, and checking my bag for free. I could even stay in touch with family and colleagues on my really slick STARTAC flip phone. So, even our day-to-day activities – including our travel rituals — have changed.
So has the role of demand management.
During this same timeframe, demand management (and supply chain in general) was viewed differently, right down to the location of the groups within the office complex. For example, for one of my customers, I would arrive at their site on a Monday morning, shuffle my way through the foyer of the corporate headquarters on my way to the basement! The basement was actually a step-up considering that other office location outside the manufacturing plant in a portable double-wide trailer! Demand management was definitely not viewed as an important or strategic for the company, let alone an integrated part of the process.
Fifteen years later, many things have indeed changed. Let’s take a look at this evolution:
- The Demand Planner – The role of the demand planner was typically an entry- level position, filled many times by recent college graduates with a statistical background. Back then you needed someone who could understand those sophisticated algorithms, but now that technology covers a lot of that part of the process, the skillset of the demand planner has started to shift. Organizations require professionals whose skills expand beyond statistics and Excel to include solid communication and networking skills. They must be able to collaborate with all groups within an organization from sales and marketing to product development to transportation and manufacturing.
- The Data – The wealth of data and subsequent information and knowledge that is available today far exceeds the old monthly shipment data that was available 15 years ago. For instance, data that is closer to the point of consumption is available in the form of point-of-sale data. The power of data can help to shape more accurate demand plans, including data on the implications of lost sales from stock outs at the shelf, and ordering patterns and polices of customers.
- The Process – In the past, demand management processes followed a cyclic process, but still tended to be rather linear. The sales forecast was created and simply fed replenishment and manufacturing plans. Demand management has since evolved into a central, integral strategic process that has helped to spearhead initiatives such as sales and operations planning. As companies have identified how critical the sales forecast is – along with the benefits that can come with each increased point of accuracy – they have begun to better understand the importance of the demand planning process.
- The Role within the Organization – Thankfully, demand planners are no longer hidden away in the basement. They have been elevated to the boardroom. Similar accounts of this elevation were noted in a recent report by Gartner’s Noha Tohamy and Dana Stiffler, “How to Structure the Demand-Planning Organization.” In this report, it is noted that many of Gartner’s clients are “looking to revamp the role of the demand planner into a more-coveted position that can attract top talent.” Companies now realize that everything revolves around customer demand. The role of the demand planning organization has become a centralized hub carrying a wealth of information that many groups within the organization want – and need – to know. The demand planners who generate and manage the sales forecast are the gatekeepers of information that powers not only inventory and manufacturing decisions, but also supports new product development, labor scheduling, and space and category management decisions at the store, as well as securing transportation contracts. Demand planners indeed have a critical role within the organization.
This evolution over the last 15 years is clearly visible within every organization. Take a look at your own organization; I bet you could easily identify big changes that have taken place. Click . Now the bigger question: what will the next 15 years bring and are you prepared?