Email
sinha.rk.dr@gmail.com
Do sales people undersell or oversell?
One of the most frequent comments I have heard across various supply chain teams relates to underselling or overselling by the sales team. ‘We ended up with stockouts because sales team oversold against the plan’ or ‘We have excess inventory in the system because sales team undersold’.
Do such comments help in improving the system by taking corrective actions? If we aim to achieve sales matching the plan, is it good for the system? Are we just pushing the problem to our customers?
I see two problems in this line of thought. The first one is pushing the entire responsibility to sales instead of acknowledging that market demand was actually different from the plan. How well did we plan? Is it underselling or higher forecast? Is it overselling or lower forecast? The moment we acknowledge the actual demand, the emphasis shifts to internal systems and internal responsibility to improve it.
The second problem is linkage of differential demand to stockouts and excess inventory. Are the internal systems so rigid that we are unable to adjust to actual demand? Why should we be so dependent on forecast? Is the process of forecasting the real issue?
Shifting the focus from overselling / underselling by sales team is the first step in acknowledging that the responsibility lies with the supply team to improve our internal systems to meet actual demand instead of forecast.
Demand Driven Supply Chain is the way to go…