This is Jill VanDewoestine blogging for the Technology Marketing Center with another commercialization tip for product managers.
You’re the marketing director for a new product, in a monthly supply planning meeting with the production planner, manufacturing manager, and sales manager. You deal with the same arguments each month: sales is waiting on samples to get customer qualification, because sample production is behind. Manufacturing is grumpy because the demand forecast keeps changing and they have to keep making job changes. The production planner’s numbers never seem to make any sense. Why can’t we get this right?
It’s easy for marketers to dismiss production planning as a detail not worth thinking about, or a means of not having to deal directly with manufacturing. It’s also easy for the planning side to completely lose faith in the commercial team because of what they perceive as poor forecasting. However, effective production planning can be a real source of competitive advantage: faster lead times, lower product costs, and more effective use of manufacturing resources all contribute to higher sales and happier customers. Here are some ideas to try:
1. Pitch your product and customer to the planners
Does your planning team understand the customer, the industry, and the value prop of your product? Do they understand the demand drivers and the competition? Have they ever spoken directly to a customer? Many customer-facing folks believe they don’t have time to educate planners on these topics, or see it as a potential loss of power in the organization. A good planning team can save your bacon in times of unexpected demand, or be a great ally when asking production to do something challenging. But they won't support you if you don't treat them like a partner. And partners tell each other what's going on.
2. Treat your demand forecast like you would treat a sales contract
A demand forecast is a lot like a sales agreement between you and production: it’s a communication of expectations between two parties. If you are just sending a spreadsheet over to planning without comment, you are missing an opportunity for important discussions to take place. Would you agree to a sales contract with your customers without discussing it with them first? Take the time to discuss the major drivers of changes to the forecast and where the areas of highest risk are directly with the planning team. Otherwise it’s like sending them a non-negotiable contract, any they will mistrust it at best and completely ignore it at worst.
3. Collaborate on the supply plan
If you open up your demand forecast process to planning, take the time to participate in the supply planning as well. This can be challenging: the planning team may be skeptical that you can add value, or they may have had a bad experience with commercial folks trying to micromanage them. Work with them to figure out what the critical items are in the planning process (a certain product, a certain customer, areas of high uncertainty or risk) and focus the attention on those. Find a balance between the big picture and critical details where you can align.
None of this is easy, because of the natural tension between these two functions. The degree of difficulty is higher for new products than mature ones. But your perseverance will be rewarded.