As I was driving at 120 km/h on the inside lane of the A28 motorway on my way to our offices in Hoevelaken, The Netherlands, I was overtaken by a motorbike tailgating a car. ‘That’s risky,’ I thought to myself, and just a split second later the motorcyclist smashed into the back of the car as it braked unexpectedly due to stationary traffic ahead.
Countless similar accidents occur on a daily basis, resulting in damaged bodywork to vehicles and people who are shaken, injured or even killed, as well as huge traffic jams. I can imagine that all this costs the economy hundreds of millions each year, not to mention the human misery that can’t be expressed in monetary terms. Governments have been doing their best to warn us of the dangers for years, telling us to ‘keep your distance’. Having recently seen no less than three serious accidents happen right before my eyes, I do indeed keep my distance nowadays – although I didn’t use to, if I’m honest.
Forecasting is one of the first steps in the sales & operations planning (S&OP) process. S&OP revolves around Sales and Supply Chain coming together with the aim of exchanging and creating reliable data. The key word here is ‘reliable’.
Just like the motorcyclist on the A28, people in general have a chronic tendency to overestimate themselves. I see evidence of that in my daily work. Demand management is ‘the mother of all events’, but ‘garbage in - is garbage out’ as one of my colleagues often says. In demand management, there are clear signs of self-overestimation by both Sales and Supply Chain.
Sales tends to take a slightly too opportunistic approach, and Supply Chain regards itself as ‘rescuer’ of the company, putting everything back into proportion. So Sales and Supply Chain are continually in the clinch, and it often leads to accidents: excess inventory, or not being able to deliver on time resulting in extra costs in order to keep the customer happy.
How many more warnings do you need in the shape of – at best – damage to your bodywork? How many more times must your company write off obsolete inventory? How many more extra costs must your company incur to be able to supply to that particular customer after all?
The solutions we offer are based on a red, orange and green traffic-light system, for both Sales and Supply Chain. And because we know that people are inclined to ignore such signals, we spend a lot of time on coaching and educating our customers’ employees in addition to focusing on the technical side of implementing our modules. In other words, we teach them not to ignore any orange or red signals.
It was a huge shock to see the motorcyclist thrown into the air following the collision. I slammed my brakes on, jumped out of my car and ran over to him, dialing the emergency number as I ran. To be honest, I thought he was dead. Thankfully, he wasn’t – but it’s a miracle that he survived.
So why is Sales not interested in collecting data for your S&OP Process? Click here
And how can you win your sales team's buy in? Click here
