Overview

Despite even the most intensive efforts at foresight, the best-laid plans of mice and men often go awry, as poet Robert Burns observed more than two centuries ago. So, too, with marketing, sales, and demand plans.

Why do plans go awry? Uncertainty is one reason. Despite the best efforts to obtain credible information upon which to base assumptions about demand, there is almost always some degree of uncertainty about markets, customers, competitors, and a company's own internal ability to execute.

Given this reality, methods are needed for managing uncertainty. Planning strategies for managing uncertainty are the focus of this chapter.

Company leaders respond to the potential for uncertainty in different ways. Some ignore it and then are surprised and disappointed when customers do not buy as planned. Others blame the person responsible for developing the demand plan, and the position of forecaster or demand manager becomes a revolving door. Others assign blame to the salesperson or marketing or brand manager.

More astute leaders recognize the inevitability of uncertainty. Instead of ignoring or resisting the fact that all plans (yes, even supply plans) are not perfect, they take a different tack. They manage uncertainty by:

• Identifying, clarifying, and reducing uncertainties about demand

• Deploying different planning strategies when uncertainties cannot be reduced or eliminated

• Developing demand scenarios to preplan contingencies

When company leaders manage uncertainty, they gain greater control over their company's destiny. Case in point: A company's sales and marketing executives reviewed the demand plan over the entire 18-month...