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"Supply Chain Management" John T. Mentzer The
Impact of Forecasting Improvement on Return on Shareholder Value
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Seven Keys to Better Forecasting - Webinar with Dr. Mentzer, |
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Beyond the Spreadsheet: The Enterprise Plan of Record |
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By Dr. J. Thomas Mentzer, Distinguished Professor of Marketing and Logistics at the University of Tennessee. |
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Maintaining sales force effectiveness, ensuring strong margins, supporting high order fill-rates, avoiding large inventory write-offs, and managing regulatory compliance requires companies to formulate strategic, tactical and supply plans based on a realistic view of demand. That's why in today's uncertain economic environment, enterprise planning processes have become business critical.
While millions of dollars in SCM, ERP and CRM system investments have helped improve efficiencies within each area of the organization, these systems were not designed for facilitating cross-functional business planning. As a result, most companies still rely on spreadsheets to support executive-level planning, while source data remains buried in enterprise systems. However, spreadsheets lack the data management, analytics, and process automation needed to reconcile and align functional plans that should drive executive decision-making.
Why You Need an Enterprise Plan of Record
Enterprise Planning and Performance Management (EPPM) Software does what spreadsheets and enterprise systems cannot - it enables business planning for the demand-driven enterprise by providing visibility, collaboration, and performance management across sales, marketing, finance, and supply chain operations. The EPPM Solution helps companies accurately assess market demand; clearly align their customer, product, inventory, production, and business plans: and closely monitor operational, financial, and sales performance. This approach: 1. Allows you to leverage your existing enterprise infrastructure to create an Enterprise Plan of Record that can vastly improve your demand plans and streamline Sales and Operations Planning (S&OP) processes. 2. Gives you the visibility you need to quickly respond to changes in the marketplace, as well as comply with mandates and regulations such as Sarbanes-Oxley. It supports compliance with Sarbanes Oxley Section 404 by enabling documentation of all assumptions and processes, and compliance with Sarbanes Oxley Section 409 by ensuring rapid identification of material changes in the business such as a drop in margin for a certain region or product line, an unexpected gap in actual performance against the forecast, a gap between the sales opportunity forecast and the demand plan, etc. 3. Enables you to enforce accountability across your organization. 4. Provides the ability to institutionalize learning since all assumptions, decisions, and plans are archived in a single place rather than in disparate spreadsheets held in the hands of individuals.
The Enterprise Plan of Record - a Team Effort
The Enterprise Plan of Record is a single repository of past, present, and future forecasts, plans and assumptions across the entire enterprise. With a consolidated, viable operating plan for the organization--executives, managers, and planners are able to consistently drive results, measure performance, and ensure compliance. Enterprise-wide visibility reconciles the disparate aspects of each functional area into a single model, while retaining the integrity and detail needed to turn business strategy into functional action plans. The enterprise plan of record translates data into information for each functional team in their terms-- units, dollars and margins--bridging data through unlimited levels from lowest product detail to top-line revenue forecast, thus driving consistent performance management across the organization. The enterprise plan of record is crucial to efficient business management and responsible corporate governance. It has become a ‘must have’ to drive corporate and operational performance in an organization.
About the Author
Dr. J. Thomas Mentzer, Distinguished Professor of Marketing and Logistics at the University of Tennessee is the former President of the Council of Logistics Management (CLM) – a 15,000 member industry organization whose members are primarily executives in the manufacturing and distribution industries. He is also the author of Sales Forecasting Management, the leading textbook on forecasting, as well as hundreds of papers on the topic of Enterprise Planning. Dr. Mentzer also founded the UTK Sales Forecasting Management Forum, which includes over 200 executives from Fortune 1000 such as P&G, Coke, Tellabs, Lucent, Eastman Chemical, and Michelin. |
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