Overview

Some people believe that measuring demand plan accuracy is an exercise in futility. After all, demand plans are always wrong. So what is gained by measuring demand plan accuracy?

Those who most frequently express this sentiment have seen demand plan accuracy measurements used in a punitive way. Demand planners and demand managers are frequently criticized for demand plan errors. They take heat from the supply organization, sales and marketing managers, finance executives, and, all too often, the general manager or president.

Case in point: A client wanted to hire a demand manager from within the company. The management team believed it was important for the demand manager to understand the company's business, markets, customers, and products as well as to know the sales and marketing people. No one applied for the position. In response to the lack of applicants, the vice-president of sales and marketing worked with the human resources director to identify four candidates from within the company. All four candidates declined the offer.

One candidate most eloquently explained why he was not interested in the position: "Why would I want to take a job where every month I am criticized at the sales and operations planning meeting because the demand plan is wrong? It is embarrassing to be criticized by senior management, especially when you had little to do with creating the inaccuracy in the first place. The sales and marketing people should be called on the carpet. They're the ones who wait until the last minute...