02. Demand Reviews: Don’t Over-Complicate Them
Picture this: It's 9 AM on a Tuesday. You're sitting in the monthly Demand Review meeting watching your colleagues scroll through their phones while someone tries to explain the difference between the MAD and MAPE results or droning on about regression analyses. Familiar?
Pause for a moment.
Here's a truth: Most companies make Demand Reviews more complicated than needed, especially in the early days of an IBP/S&OP implementation. They get lost in attempting sophisticated forecasting techniques and complex spreadsheets while missing some basic ingredients that make these meetings work.
So let's talk about five basic behavioural practices that will make a big difference to your Demand Review, indeed to all your IBP meetings:
1. Consistency and Routine
Remember that movie where Bill Murray lives the same day over and over? That's exactly what you want from your Demand Review. Same time. Same place. Same faces. Every. Single. Month.
Why? Because humans are creatures of habit. When we know exactly what's coming, we show up prepared. Book these meetings six months ahead. Make them as predictable as your morning coffee.
2. Standardisation Matters
Do you know how IKEA instructions don't have words, just pictures? They work because they're consistent and (almost) everyone can follow them. Your Demand Review should be the same—the same agenda, the same format, and the same flow—every time.
Attendees should not be trying to interpret new presentation formats and decipher what has changed, they should be able to immediately focus on what the latest assumptions and numbers really mean.
Is it exciting? No. Is it effective? Yes.
With a consistent routine and standardised format in place you're ready to tackle the most crucial question: "Why are we here?"...
3. Purpose and Clarity
Start every meeting by reciting your meeting's purpose, it may be as simple as: "We're here to reach a consensus on our demand plan for 36 months and make sure it is on track to deliver both budget and strategy. Is everyone clear on that?" Galvanise the attendees at the beginning, and then recite the purpose again at the end of the meeting and check with the group if you achieved it. This is effective at focusing attendees and also at triggering discussions about how to improve next time.
4. Focus on Key Assumptions
Stop debating numbers and start debating the assumptions behind them. "What's the assumed impact of our price increases on volume across different customer segments?" "What percentage of our mining customers will maintain production levels given current commodity prices?" These assumptions are your gold. Document them. Challenge them. Learn from them when they're wrong.
5. Effective Documentation
Your IBP meeting note-taker needs to be part journalist, part detective, and part bulldog. They need to be brave enough to say "Wait, who's doing that?" and "By when exactly?" Good notes aren't just history - they're your action plan for the next four weeks.
Vague notes lead to vague actions which lead to vague results. Make your note-taker one of your most valuable players - they're not just recording history, they're helping shape your future success.
The Simple Truth
Now, I can imagine some people are thinking: "But my business is different" or "We are especially complex." The simple truth is this: I've seen these 5 practices work wonders in companies selling everything from timber to yoghurt, from pet food to transport network capacity. Because ultimately, a good Demand Review isn't about having perfect forecasts. It's about having honest conversations about the future and agreeing on an action plan to shape it, and then deliver it.
Start with these basics, get them right, then do the fancy stuff.
What's one basic behavioural practise that transformed your Demand Reviews from time-wasters to value-drivers? Share a specific example that worked in your organisation - your experience might be exactly what another planner needs to hear.
#IBP #S&OP #Demand Planning #Demand Forecasting
About the Author
I'm just a regular IBP person who's seen enough Demand Reviews to know what works and what doesn't. And yes, I've made all these mistakes myself. Want to learn more? Visit me at www.planninglab.co.nz