Westport, MA – July 25, 2011—There has long been a debate on where the Demand Planning / Forecasting function should sit within an organization. LifeWork Search recently asked their network where this function sits within their own organization.
Results show that more than half of companies have the function reporting under Supply Chain (52 percent), followed by Sales (20 percent), Finance (9 percent) and Marketing (5 percent), while 14 percent stated Other (many specifying that the function fell under Operations.)
"This has long been a controversial topic in the forecasting world," said Jason Breault, Managing Director of LifeWork Search. "We speak with dozens of demand planning professionals daily, and many are still unclear as to where demand planning should sit. Even while presenting at a recent Institute of Business Forecasting Conference, when the question was asked, there didn't seem to be a clear consensus."
Interestingly, in a recent blog (http://www.supplychainshaman.com/uncategorized/trading-places/), Lora Cecere referenced a study conducted by Terra Technology and tied it back to a previous benchmarking study - both related to forecasting. According to the blog, five consumer goods companies were benchmarked in 2003 and then again in 2011. Three of the five companies remained relatively unchanged in their forecast accuracy ranking, while two companies did a complete 180; the company that was rated the highest in 2003 now ranks the lowest, while the company that ranked the lowest in 2003 now is ranked the highest. Findings from the study show that the two companies changed where demand planning sits within their organization.
The company with the current highest forecast accuracy decided to change global reporting of demand planning to Supply Chain, while the company that now has the worst forecast accuracy decided back in 2003, right after this study was conducted, to have demand planning report to Sales. "It is important to point out our results; over 50 percent of companies have demand planning reporting to Supply Chain. I do not see this as a coincidence; I strongly believe that this is where many companies are finding the most success, and the results referenced in the blog seem to prove just that."
For more information, visit www.lifeworksearch.com