GETTING THE RIGHT INPUT
This ought to be easy, but
it's usually not. If you
have a
formal sales and operations
planning process, bravo!
You are on your way to
success. You also have top
management
that supports the process.
If they don't, people
will stop showing up and it
will become just another
"flavor of the month"
directive that will soon
lose all credibility.
Unfortunately, this happens
frequently.
Also common is the level of
distrust between sales and
marketing, the folks with
the information, and operations,
the folks who need it. We
all know that just
plugging in a new system
will not do the trick.
Systems do one thing and one
thing only; they do math
quickly.
But it's all based on past
history and things change.
Promotions
never run the same time for
the same products
under the same economic
conditions. You need the input
of the sales and marketing
staff. Even without a formal
SOP, you CAN make it happen,
but the onus is on
you.
At virtually every
presentation I make, it's
the most
common complaint. So let's
set the record
straight—sales
and marketing staffs are
hired for their ability to
sell
product, not forecast. Do
not babble on about all the
fancy features of the
system. Their eyes will
glaze over
and you can forget about
being taken seriously. Keep
all reports simple to use
and understand, for
everyone's
sake. You don't want to
create a monster that's a
pain
to maintain, nor do you want
anything that could cause
confusion or
miscommunication. In
practice, I find that your
chances for success increase
as their time required
decreases. Remember that
their main function is to
sell product.
You must always be
trustworthy. If you are told
of
planning for a major
promotion, and the
competition
finds out, much more is at
stake than a permanent blow
to your credibility. If your
competition finds out, your
profits may be at stake.
Don't leak.
UNDERSTANDING YOUR PRODUCT
Since systems only react to
trends, seasonality, and
such,
knowledgeable human input is
a key but often overlooked
success factor. No system
knows that your Engineering
group found another
application that will make
demand soar, or released a
similar item with better
features
that will slash demand. Nor
does it know that
you've cut the price, are
running a special offer, or
are advertising it.
Understanding the product
group and the individual
items are critical. You must
know why something is
trending as it is if you
ever hope to know if that
trend
will continue or increase.
You need to know where you
are in the life-cycle of the
product, where it stands in
consumer need and
popularity, and why your
customers
would want more or less of
it. Is the product a staple
or an impulse item? Many
firms put the best and
brightest
mathematician in charge of
forecasting, but do little
or no product training, and
wonder why the results are
lacking. Know your product!
To Be Continued
For balance of this article, click on the below link:
Lean Manufacturing Articles and click on Series 15