Demand Planning organizations often spend most of their time on planning the products they sell to the customers that they sell them to. That should not come as any great surprise, but to those of you spending most of your time in this space, I would invite you to step back out of the weeds and think more broadly about your business.
By thinking more broadly, I mean thinking about the categories and markets that your business operates in. In most CPG companies this is a natural and often discussed aspect of the planning process for marketers. In other businesses this may show up in long-range planning as a view to the total addressable market (TAM) and estimates of share. It is an important view to take because it can help to regulate and validate your demand plan get ahead of longer-term trends. In my experience, particularly in CPG, senior leaders almost always start with a view of category growth and then use that as their benchmark for evaluating the reasonableness of plans.
In stable categories (consumer staples for example) the long-run category growth rate is often a good benchmark for a demand plan. Deviation from that long-run growth rate is then typically explained in terms of market share gains and losses, which is an important discussion to have. If your business has historically been following the category trend but your demand plan suggests a deviation, then there are probably some important assumptions to get on the table and validate. This also applies if you have been showing a consistent trend of positive or negative share growth.
In less stable categories (growing or declining), looking at category growth trends and drivers is an important exercise in identifying potential inflection points. At some point a growing category will slow down, and continued growth within that category will have to shift from riding the “rising tides” to competing and taking share from competitors. Ultimately this comes down to understanding where your growth (or decline) is being driven from relative to your competition. Too often I find Demand Planners who are not aware of the category or market trajectory, let alone their companies position within it. Take some time to step back out of the weeds and understand the context. It will only strengthen the quality of assumptions in your plan.
Greg Spira 