Five Things Demand

Planners Need from

Leadership for the Role to
Add Value
By Daniel Fitzpatrick

E X E C U T I V E S U M M A R Y | Effective Demand Planning provides enormous benefits to the S&OP process by converting
inputs from the Finance, Sales and Marketing, and Supply functions into a robust forecast. Demand Planners are key players in
this process, and success in this role requires a wide range of skills, from data analysis to negotiation, coaching, advising and
leading. To be effective, Demand Planners need support from management in five key areas. Here we examine these areas in
detail and recommend how management can effectively support people in this important position.

D A N I E L F I T Z PAT R I C K | Daniel is a Demand Planner who has worked in retail inventory management
for more than 20 years. An educator by training, he taught himself the basics of replenishment, Planning and
Forecasting. He developed these skills further in his time working for Office Depot, Walmart and Home Depot.
He also worked in a training capacity for Walmart, teaching users how to navigate and use many of Walmart’s
complex inventory management systems. He gained his CPIM certification in 2016 and writes regularly on
Demand Planning and Forecasting.

D
emand Planners have a
challenging role in today’s
S&OP world. They are expected
to command a wide variety of skills
in their role as leaders and advisors
in the S&OP process. Successful
Demand Planners provide significant
improvements in production and sales
planning, and also provide leadership
in setting goals and directions for the
future. However, if these Planners are
to be effective there are, I believe, five
things they need from management:
1. Alignment with leadership
2. Influence over key departments
3. Independence
4. Well-defined job definitions and
appropriate performance metrics
5. Opportunity for career growth/
change to avoid burnout.
Let’s examine why these are important.
ALIGNMENT WITH
LEADERSHIP
A Demand Planner can only be truly
effective if the company leadership

Copyright © 2018 Journal of Business Forecasting | All Rights Reserved | Summer 2018 | www.ibf.org 27
recognizes the value of planning, and
openly and consistently supports it.
This can mean that the numbers that
the Planner presents do not always
meet the leadership’s expectations.
Leaders need to recognize that this is
not necessarily a bad thing, as when
this occurs there is an opportunity for
all teams involved to evaluate what
they need to do to get the program
in line with the plan provided by
management. In doing this, they
answer not to the Demand Planner
but to the leadership team directly,
since everyone owns the forecast. This
drives a conversation around where
the plan may need to be updated,
or where there are potential growth
opportunities or risks within the
business. This conversation should
include all the teams and management
levels that impact the forecast.
INFLUENCE OVER
KEY DEPARTMENTS
If the Demand Planning role is
supported by the leadership team,
leverage and influence naturally follow.
However, I have often heard Demand
Planners complain that no one listens
to them. When this happens, much of
the value of their role is lost. Demand
Planners should not have to beg for
others to listen to them. If their role
does not carry significant influence
with the other teams involved in
Planning, it can be very frustrating
and may lead to burnout and turnover
in this key position. What’s more,
ineffective Planning can undermine
the entire S&OP process. A Demand
Planner who is struggling to be heard
needs to assess whether he or she
does indeed have the support of the
leadership team. If they don’t, they
need to build a case to show how they
can provide more support.
28 Copyright © 2018 Journal of Business Forecasting | All Rights Reserved | Summer 2018 | www.ibf.org
INDEPENDENCE
The Demand Planner’s primary
goal is to present a plan that matches
reality — not what people wish will
happen, but what is most likely to
occur based on data and input from
the various teams. To do this well,
the Demand Planner’s decisions
need to be free from the influence
of other departments, including the
leadership team. Otherwise, there will
be a bias toward one set of metrics vs.
all the others (or the plan will simply
be the result of dividing the annual
number by 12). This means that often
no department is fully satisfied with
the consensus forecast. And if this
forecast reflects the most likely reality,
that’s OK. The differences between the
plan and the reality are the basis for
ongoing conversation and possible
adjustments to the forecast.
WELL-DEFINED JOB
DEFINITION AND
PERFORMANCE
METRICS
Planning needs focus and time. It can’t
be done well if there are too many other
competing responsibilities assigned to
the Demand Planner. I’ve seen Demand
Planning positions where the Planner
was also doing customer service, master
data maintenance, and even sales
training. Defining how a Planner should
be spending their time—keeping
distractions away—is vital in allowing
the planning function to flourish. And
having realistic performance metrics
that include both hard numbers (bias,
MAPE) as well as soft skill goals can make
the Demand Planning job more effective
and allow for career growth. If a person
wants to remain in a Demand Planning
position, the job should be structured to
allow for career growth.
OPPORTUNITY FOR
CAREER GROWTH/
CHANGE TO PREVENT
BURNOUT
Demand Planning is, at times, dif-
ficult. Even the best Planners are con-
stantly challenged to present realis-
tic plan numbers and often need to
defend them in front of people more
experienced than they are. Rarely does
anyone leave a Demand Planning
meeting truly satisfied with the out-
come. Success for a Demand Planner is
most often measured in performance
improvements and rarely in compli-
ments for a job well done. There are al-
ways new business challenges to meet
and overcome. Even when Planners are
properly supported, there are limits to
how much they can achieve in a given
position. The personalities and abilities
of the people they deal with, and ex-
pectations placed on them by manage-
ment and other team members, often
limit how much they can accomplish.
Management needs to recognize this
and provide opportunities for mov-
ing Planners who have reached this
point to another area in a similar role
or, where appropriate, to move into a
supervisory or training role. Failure to
do this in a timely manner can result in
burnout and unplanned turnover, and
both of these outcomes significantly
undermine the value of the Demand
Planning role.
CONCLUSION
Demand Planning—when done cor-
rectly—provides enormous benefits to
an S&OP program by driving conversa-
tions around improved Planning and
continued on page 42
by mid-2019, which equates to four rate hikes. The approach
is consistent with the Fed’s policy of gradual interest rate
hikes to manage a non-recessionary soft landing. Rajeev
Dhawan of Georgia State University believes that further
rate hikes by the Fed depend on how the 2017 tax cuts
are internalized by households and whether they cause a
permanent shift in spending habits. Hikes in oil and gas
prices will eat into some of the tax cuts households are
receiving, as well as real wages. Dhawan characterizes
concern regarding the advent of recession as premature
and expects the long-term yield to rise steadily (many
forecasters consider the inverted yield curve as a leading
indicator of recession). Dhawan is convinced that the Fed
can manage the short-term yield to avoid an inverted
yield curve. The net effect of restrictive trade policies and
anticipated reciprocity by our trading partners is expected
to contribute to wage and price inflation in years to come.
The disparity between productivity growth and growth
in unit labor cost remains a serious concern regarding
wage and price inflation. In the first quarter of 2018, labor
productivity grew at 0.4 percent while unit labor cost grew
at 2.9 percent. Since the last quarter of 2015, growth in
private nonresidential fixed investment has been steady
and positive. However, it takes time to design, deploy, and
train workers with new technologies before the impact on
labor productivity becomes noticeable. In addition, unless
the private sector translates some of the tax cuts and
repatriated off-shore funds into capital deepening instead
of stock buy-backs, labor productivity will continue to lag,
contributing to rising unit costs. This will eventually lead to
higher cost-push inflation and erosion of real wages.
CONCLUSIONS:
Economic Expansion Fails To
Help Low- and Middle-Skilled
Workers
Particularly for bottom and middle-skilled workers, the
rise in inflation is deteriorating any real wage growth, but it
is having a positive impact on consumer spending and GDP
growth. Economic expansion has not reduced persistent
income inequality, failing to fix issues in social mobility and
labor productivity. Labor and business dynamism has been
on the decline—only two percent of workers are moving
across state lines, compared with three percent 40 years
ago. What’s more, they are less likely to switch jobs. Without
access to retraining and retooling, it is difficult for workers
to change profession and benefit from higher productivity.
Most new jobs are created in the urban centers where
the creative class lives. The acceleration in cost of living,
particularly the cost of housing, is making it very difficult
for low and middle-skilled workers to relocate from rural
areas to urban centers to take advantage of better-paying
employment opportunities. Newly formed firms make up
the majority of new employment opportunities and wage
growth. The percentage of firms that are under one year
old has dropped from fourteen percent in the late 1970s to
eight percent, contributing to sluggish real wage growth.
—Send Comments to: JBF@ibf.org

Five Things Demand Planners Need from Leadership for the Role to Add Value
continued from 28

execution. And to gain the most value
from people who choose to take on
this role, it is vital that these people
receive proper training and support.
Without these, a Demand Planner can-
not deliver the value that we need in
today’s complex and rapidly chang-
ing S&OP programs. To ensure that
Demand Planners have the support
they need to be effective, we need
to actively educate company leaders
about the value this role can have if it
is properly supported and executed.
This means that the leadership needs
to be actively involved in promoting
and supporting those in Demand Plan-
ning positions. Those leaders who do
actively embrace the value of this role,
and consistently and openly support
it, will give their company a significant
competitive advantage through lower
production and inventory costs, as well
as improved service levels.
—Send Comments to: JBF@ibf.org

42 Copyright © 2018 Journal of Business Forecasting | All Rights Reserved | Summer 2018 | www.ibf.org
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prohibited without permission.