family and detail by sub-family with the reasons for changes summarized, the assumptions documented, and vulnerabilities and opportunities to the plan noted. The unconstrained demand is the amount of demand for the product or service assuming there are no constraints. Unconstrained demand, however, is constrained only by the company’s strategies and the marketing and sales budget. Given the strategies and budgets, unconstrained demand is what sales realistically projects that it can sell. In the management business review meeting (step five of the five step sales and operations planning process), however, senior management may choose to constrain the demand and limit what sales can sell. The objective and goal of the demand review meeting is to develop a demand plan of what the company realistically expects to sell in the marketplace. It is senior management’s role to either provide the necessary capacity or constrain the demand to achieve the defined business objective. The demand review meeting of the sales and operations planning process establishes a valid demand plan that is agreed to by both sales and marketing, identifies the gaps to the business and strategic plans, develops the necessary plans and actions that will eliminate or narrow those gaps, and which will enable the company to effectively execute its business plan. The supply review meeting, from which valid supply plans are developed to execute the demand plan, will be the next topic of discussion in this series on sales and operations planning/ integrated business management. Strategic management September 07 Businessexcellence 11 John E. Schorr, a principal with Oliver Wight, is recognized as one of the leading experts in the areas of sales & operations planning (S&OP). Prior to joining Oliver Wight, John was involved in the implementation of MRP II at Haworth, where he was vice president of manufacturing, and Steelcase, one of the leading Class A users of MRP II, where he was director of purchasing. Demand Review Meeting figure 2 for the demand review meeting. The demand review step is owned by the head of sales and marketing and is facilitated by a demand manager, a critical position responsible for pulling all the inputs together, critiquing the data prior to the meeting, and facilitating the demand plan development through the demand review process. The demand manager also has the responsibility to monitor actual performance to plan, manage any abnormal demands as they arise, and update the plans based on daily discussions with sales, customer service, and supply planning. This is a full-time job. The demand review meeting is attended by sales, marketing, product management, the new product coordinator, the supply manager, and the demand manager. They work together to integrate all the inputs, critique the data presented, and jointly develop the assumptions that will be used as the basis of the demand plan and discuss how those assumptions will impact the plan. They also review past performance in the areas of demand plan accuracy, sales plan accuracy, demand plan bias, market share, and other appropriate process metrics. The attendees review the changes to the demand plan from the previous month and determine whether those changes are one-time, short-term, or long-term trends that need to be included in the updated demand plan. The goal of this meeting is to develop a consensus demand plan for senior management’s review and consideration. The outputs of the demand review meeting are the timely unconstrained demand plan in both aggregate by
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