Operations Payoff

Rick's Blog - your source for news and insights into Operations and Supply Chain Management.

Tell Them What You Need

I recently sat in on a conversation between two people from Sales and two people from Supply Chain Management trying to determine why the company had run out of parts that were needed to satisfy demand. Sales claimed they had submitted a forecast that should have covered the demand. During the conversation, the salespeople mentioned how they had gone into the system before they submitted the forecast to see how many parts the company had, and noticed that most were already allocated. So they submitted an adjusted forecast to allow for the allocated product. In effect, while trying to help, they effectively mislead the Supply Chain team as to what the real demand was. This is unfortunately a common occurrence and can stem from either trying to help, or from not trusting the Supply Chain team to do their job.

When Sales submits a forecast, it should reflect what is needed to satisfy demand for the period, without regard to the current status of inventory. Supply Chain should then determine what they need to either buy, reallocate or transfer to cover the demand. Trying to do the other person’s job for them often results in confusion and poor service levels. Sales should forecast what they need.

© 2013 – Rick Pay – All Rights Reserved

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