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Why Is Collaboration Between Sales and Demand Planning So Difficult?

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Guest Author: Seth Burkhart​​​​, Director, Supply Chain Planning at enVista

Collaboration is critical to any organization taking their business to the next level. Typically, companies start with a core competency, and then as they grow, supporting functions, new departments or shared services are added. It is quite common for the company culture and strategy to lag in this evolution and often is the case that companies find themselves at a level where they have grown significantly, and some areas are more efficient than others.

The Role of Sales and Operating Planning (S&OP)

Organizations typically turn to processes like Sales and Operating Planning (S&OP) to improve communication and collaboration between different teams like Sales and Demand Planning. When everyone is on board, different backgrounds and priorities lead to strong discussion and better decision-making to support overall organizational goals. But when things go wrong, differing priorities can drive a wedge between teams, increasing the siloed decision-making. Why is it that a process designed to bring people together can so often lead to conflict?

Common Challenges in Sales and Demand Planning Collaboration

One of the most common examples is misalignment between sales and demand planning. A quality demand plan is the starting point and backbone for an effective S&OP process and having a breakdown at the beginning sets the entire process up for failure. Below are some of the most prevalent reasons why many organizations struggle to build effective collaboration between sales and demand planning.

  • Differing Goals, Priorities, and Incentives: Sales teams are often focused on meeting or exceeding sales targets and maximizing revenue, while demand planners prioritize accurate forecasting and efficient inventory management. These differing goals can lead to conflicts in decision-making and resource allocation. Additionally, the performance incentives companies have in place often lead to varying priorities among teams that need to work together.
  • Communication Barriers: It’s no secret that teams across organizations “speak different languages.” Whether it’s revenue vs. volume or if it’s speaking in days or weeks vs quarters and years, effective collaboration requires open and clear communication between sales and demand planning teams. However, miscommunication or lack of effective communication channels can lead to misunderstandings, resulting in inaccurate forecasts or misaligned expectations.
  • Resistance to Change: Implementing collaborative processes like S&OP may require changes to existing workflows or responsibilities. Resistance to change from either team can impede collaboration efforts.
  • Different “Ways of Working”: Many times, sales is a relationship-driven process and the journey of getting to a sale can go through many iterations with varying degrees of unknowns. It is not uncommon for sales to have a line of sight to earning a sale but not have many of the key details that a planning or operations function would need to be able to execute their role. A lack of understanding of one another’s process can often contribute to less-than-desirable collaboration between teams.
  • Limited Data Accuracy and Availability: Sales teams may not always have access to detailed historical data or insights into underlying demand drivers. This can lead to challenges in providing accurate forecasts to demand planners, who rely heavily on data for their planning activities.
  • Short-Term vs. Long-Term Focus: Sales teams often have a short-term focus, aiming to close immediate deals and meet quarterly targets. In contrast, demand planners need to take a longer-term view to develop accurate forecasts and strategic inventory plans. Balancing these perspectives can be challenging.
  • Lack of Trust or Alignment: Building trust and alignment between sales and demand planning teams is crucial for successful collaboration. If there’s a history of conflicting priorities or a perceived lack of support from one team to another, it can hinder collaboration efforts.
  • Complexity of Demand Drivers: Understanding and predicting demand can be complex, especially in industries with volatile market conditions or rapidly changing consumer preferences. This complexity can make it challenging to develop accurate forecasts that satisfy both sales and demand planning requirements.
  • Organizational Silos: In some organizations, functional silos can impede cross-functional collaboration. If sales and demand planning operate independently without adequate integration or alignment with broader business objectives, collaboration becomes more difficult.

The key is not to combine the two functions but to drive collaboration via education and awareness of the unique value of each team, what each provides, and how they work together within the larger process. 

Change is hard. At enVista we leverage our team of industry experts to share our collective experiences of what has worked well and how organizations can break down barriers, build new collaborative habits and redefine the sales and planning processes with a focus on consensus and alignment. Contact us today to learn more.

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