The demand planning process, for example, can be messed up quite significantly by sales promotions. If the promotion planning process is not properly managed, there is a risk of a negative effect on the total turnover which, of course can’t be the intention. To ensure that sales promotions deliver added value, it’s necessary that the impact of the promotion on the whole organization is understood well, that there’s a process in place to handle the volume and the financial impact and that a well-integrated demand planning tool is available.
Reading this article, you may wonder why integrated planning tools are not yet a commodity. The biggest challenge in the promotion domain is to overcome the skepticism that it is possible, e.g. how to deploy a forecasting tool which is capable of providing precise promotion forecasts on SKU (Stock Keeping Unit) and aggregated level without lots of manual intervention. This skepticism often causes organizations to do nothing or tolerate poor sales forecasts from inadequate systems, such as Excel. However, in an increasingly data-driven society, with high-demanding and floating customers, solid promotion planning will become more and more a necessity.
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