Sales planning is part of corporate planning and involves determining which products are to be sold within a certain period of time. It is therefore an essential basis for further corporate planning, as capacity utilization, personnel requirements and thus investment requirements and financial requirements, among other things, depend on the sales plan.
Sales planning and sales forecasting are often confused or not clearly separated. While sales planning describes what is to be sold, sales forecasting attempts to determine what can be sold. In sales planning, there is a regular tendency to overestimate sales opportunities. On the one hand, to meet the expectations of management and, on the other, to ensure that the sales department is supplied with sufficient product quantities and can reliably exploit sales opportunities.
Our tip:Make a clear distinction between sales planning and sales forecasting in your processes. There can be considerable differences between planning and forecasting, from which consequences for overall corporate planning must be derived. This is particularly the case if the sales planning figures are significantly higher than the sales forecast figures and, as a result, there is a risk that investments will be initiated and expenses incurred that cannot be financially supported by the sales that can actually be achieved.
To ensure the necessary checks and balances between the two perspectives, we recommend that sales forecasting is the responsibility of supply chain management, while sales planning is regularly carried out by sales.
Regardless of whether a Sales and Operations Planning (S&OP) process is installed in the company: Compare sales planning and sales forecasts regularly, ideally monthly, but at least quarterly. In addition, derive measures that bring sales planning and sales forecasting closer together in order to avoid both “overplanning” and “underforecasting”. In order to recognize whether the “truth” lies more on one side or the other, you should compare both perspectives with the actual sales volumes.
