Welcome to our four-part series on utilizing customer relationship management (CRM) data to inform and enhance your sales and operations planning (S&OP) process. Over the next few posts, we’ll explore this concept for leadership decision-making that leverages data not often considered in operations and demand planning.

The Strategy Has Landed — Now It’s Time to Expand

We’ve covered a lot of ground throughout our exploration of the connection between CRM tools and processes and demand-focused supply and operations planning (S&OP). Here’s how to take it further.

First, we introduced the concept of leveraging CRM in demand planning — underscoring the need for a new way of thinking about demand planning in light of the ongoing concern over the pandemic and the uncertainty it instilled in manufacturers and distributors around the world. Second, we outlined how to determine if this approach was viable in your organization. Third, we explored the steps needed to pilot this strategy while testing and monitoring it along the way as well as taking steps to improve demand reliability.

If you’ve completed the pilot program, conducted the recommended assessment, and have made a decision to continue, you can begin to explore new ways to expand the pilot to new customer and product segments, involve new teams from across the organization, and more. The purpose of this is to continually build out your CRM data and further refine how this data is used in S&OP. Let’s explore these new focus areas as well as a few others.

Start Piloting CRM Data for Other Products and Customers

With the initial customer segment complete, you can begin to identify new customers and products for which you want to better understand future demand. However, before including these customers and products in your S&OP forecasting, it would be wise to take another pilot-type approach. Just because the pilot worked for a specific segment of the business doesn’t mean it will work for another.

If you recall from our first post, not every customer and product type is ideal for this approach. You want to focus on customers and products for which there is a more in-depth sales cycle requiring greater involvement from sales, operations, and supply chain teams. Customers that purchase smaller quantities from you at more frequent intervals may not generate the data you need for more accurate S&OP forecasting.

Involve External Partners as Appropriate

Since your pilot program was focused on a specific segment of your overall customer base, it understandably didn’t involve people from outside of the organization. However, now that you’ve decided to broaden the program for expanded S&OP forecasting capability, it may be appropriate to include external partners whose involvement with your products and customers may provide new CRM data and insight for planning.

For example, consider involving your channel partners in S&OP discussions and preparations, such as your distributors. These partners play a significant role in your ability to meet customer demands and expectations, so gaining their input will help you further refine this approach.

Another recommendation is to involve supply chain professionals from your key customers in your planning. This doesn’t mean actively involving them in your internal discussions of course, but instead consider having a regular cadence of calls with production planners, buyers, and other purchasing/supply chain professionals (if you’re not already). This will help you to catch any upcoming changes in their production plans, which in turn may impact your own planning.

Collect More Detailed Data from New and Existing Pilots

Because the initial approach has been validated, you can begin to gather and include additional information about customers and products into overall reporting and decision-making. While the content of this data depends on your industry, business, customers, and products, examples might include:

  • Additional sales-related data to further improve probability scores
  • More in-depth supply chain information such as vendor costs
  • Amount of inventory kept on hand for a customer (if applicable)
  • Logistics information and costs from historic orders

S&OP forecasting teams should evaluate the type of data being factored into this approach to ensure it is relevant, supportive of the overall strategy, and that it will contribute to increasingly accurate demand planning.

Expand the Feedback Mechanisms for Comparing Demand

Throughout this approach, you’ll be faced with two specific demand-related datasets: actual demand and forecasted demand. The goal of this approach is to refine your forecasted demand repeatedly until it reflects actual demand. This is an ongoing process that requires consistent review during S&OP meetings to ensure progress is being made.

To ensure S&OP teams have the information needed to evaluate demand, the mechanisms you’re using to provide feedback should continue to grow and be refined themselves. While much information will be available in CRM tools and processes, what other solutions are available to you? Are you leveraging business intelligence tools — which can and should be integrated with CRM tools — to provide even deeper analysis and forecasting capability? Evaluate the tech stack available to you, and should you identify any gaps or new opportunities to enhance it, consider doing so.

Our Expertise, Your S&OP Forecasting Success

We hope this series on leveraging CRM for S&OP demand planning has been informative to you as you consider your own approach for the road ahead. As a leading value chain optimization firm supporting manufacturers and distributors in multiple industries, River Rock Advisors is uniquely positioned to help you develop a strategy for improvement and execute it through our Operational Performance team.

Whether you’re just beginning to explore the opportunities available to you for more reliable demand planning or already have an approach in place that you feel could be enhanced, our team has decades of expertise in driving successful results for our clients — and we’re ready to do the same for you.

Connect with us today to learn more about this approach and how we can put it to work for your success.