A key principle in Demand Planning (and more broadly, Integrated Business Planning) is that we have a plan until we decide to change it. It’s an important principle because just like in a team sport, at any given point in time the players need to know what the game plan is. There can’t be confusion, and we should never end up in a spot where there is no plan. The same is true for Demand. The plan is the plan until we change it.
If this isn’t well understood, things can quickly go off the rails in a consensus process. In the consensus meeting our job is to reach consensus to the proposed changes to the demand plan, not the plan in its entirety. That’s a subtle but important difference. Framing it this way makes it clear that we are building from a previously approved plan. If we are unable to reach consensus, we don’t change the plan. We stick to what was previously agreed-to. With an IBP process, we can log those changes and assumptions where there is disagreement as Risks or Opportunities and escalate them to the Management Business Review for decision-making if necessary.
I have been witness to some pretty heated consensus discussions and other unusual circumstances. In one case I flew all the way to Barcelona (from Toronto) to lead Demand Review meetings that were cancelled (not delayed) just hours before they were scheduled to happen. In these unusual situations the organization should not be left in an ambiguous state. The prior plan prevails.
This brings us to bridging. Bridging is the exercise in outlining the net changes between the prior approved plan and the proposed plan, and I believe that it is a critical skill for demand planners. It forces us to think in terms of net change and explain drivers and assumptions behind the changes. I have often said that in Demand Review, the best story wins – and the bridge is where the story is told. Bridging, when done well, also helps keep track of the story over time. It helps to answer the question “how did we get here?” when half-way into the year there is a significant gap between the annual budget and the current demand plan.
If you’re looking to make your demand process more assumptions-based, bridging is often the best place to start.
Greg Spira 