Accuracy or Ownership: Which is more important?

In one of my previous posts, I wrote about the Demand Planning function having a wide range of homes in the org chart.  Where the Demand Planning team resides organizationally, however, does not necessarily define where the demand plan is owned. Much like in a RACI framework, the role that is Responsible for doing the work is not necessarily the same as the role that is Accountable for it.

With that being said, if your Demand Planning team resides within your supply chain function and has the “R” for doing the work, but the commercial side of the organization doesn’t have the “A”, then it’s a bit like trying to drive the car from the back seat (and I don’t mean like this).  There can be a lot of emotion, frustration, and disappointment.  We often hear things like “that’s not my number” and the blame game goes unresolved.

So, if you had to choose between these two, which would you pick?

1. Having a more accurate demand plan with low or no commercial ownership
2. Having a less accurate demand plan with strong commercial ownership

Some might say that having strong commercial ownership will naturally lead to higher accuracy by being closer to commercial activities and understanding of customer behavior.  Others might say that strong commercial ownership invites bias and gaming of the system due to misaligned incentives.

I believe that either way, it is important to establish the right priority for a very different reason.  I believe that even if it would yield a less accurate demand plan, having commercial ownership is still top priority.

Why? We have to step back and think about what we’re trying to achieve. We’re not in business to deliver accurate plans, we’re in business to deliver on our business objectives.  Understanding where we are against those objectives is critical so that we can take actions to close gaps where necessary. If the demand plan is showing a gap that needs to be closed but the plan isn’t owned by the commercial side of the business, then that gap won’t be owned either. 

Without ownership of the gap, nothing will be done to close it.