Top-Down and Bottom-Up Strategy

A multi-billion dollar global manufacturer is struggling. Two divisions of the company are at odds on how best to achieve world class forecast accuracy. Regional sales account representatives provide forecasts well above historical sales levels. Why?

Because inventories made available to each country are insufficient to meet market demand. The result: predict more sales to try to influence supply decisions and receive a greater portion of supply for your region.

One division has decided that a centralized approach is best and is no longer considering regional sales input. The other division is moving to a collaborative S&OP approach where regional input is requested, evaluated and incorporated in the overall plan.

Time will tell for this organization. Yet, we can make a prediction today. Experience would suggest that a well-designed, collaborative S&OP process will produce better results. Top-Down and Bottom-Up S&OP drives better results.

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