Sales Planning

A sales plan, diligently prepared by sales, is generally needed for material planning and controlling the performance process in series production. This sales plan focuses on the products that sales proposes to sell in the future. 

Series producers with numerous salable products speak from experience when they relate how difficult and how complicated a half-way realistic sales plan is to create and maintain (Fig. 62). 

Misjudgment is almost normal in sales planning, but an erroneous system or no system at all is usually unforgivable. 

In Chapter III.4 (Fig. 24), you saw that you can defuse the problem reliable sales planning by considerably reducing the delivery periods of your suppliers and in particular your throughput times. With a throughput time of only a couple of days, a sales plan would not even be necessary. 

Preparation of the sales plan is still risky when planning resources to be procured for the future. 

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The demand planning module is used for short-term and midterm sales planning. It covers basic statistical forecasting methods, but is also capable of taking additional aspects into account. For example, these may be promotions in shortterm sales planning or the consideration of product lifecycles in midterm sales planning. 

Short-term sales planning is sometimes supported by a demand fulfillment and available-to-promise (ATP) module. Its purpose is to match inventories and production orders with demands, if customers require reliable quotes with only short notice. 

Forecasting and sales planning Sales order management... 

Result is a sales plan to be disaggregated on the individual customer basis. Sales volumes different to demand volumes are possible if sales flexibility in spot businesses exists compared to sales contracts that need to be fulfilled. 

Sales order management deals with order entry, order change, availability check and confirmations to the customer. Availability check as a concept and as part of Advanced Planning Systems (APS) is also summarized under the term Available-To-Promise (Kilger/Schneeweiss 2004 Pibemick 2005). The availability has to be checked against the sales plan as stable framework for the overall period and the physically available material at the specific point in time. 

Sales Planning-, detailing the requirements to plan monthly sales volumes and values addressing commodity business characteristics of price-quantity relations and price volatility as well as uncertainty... 

Sales planning has to reflect the bidding process presented in subchapter 2.3. Fig. 20 illustrates the paradigm shift from demand fulfilment towards sales plan achievement, where demand forecast captures the role of a price-quantity bid that is cleared based on available supply and a certain sales flexibility. The sales planning mechanism is further described in the following detailed requirements. 

Therefore, sales planning will always have a flexible spot part, where demand can exceed supply and a certain demand share facing the risk not to be supplied based on the flexibility the supplier has. 

In analogy to the demand side, procurement contracts are fixed by quantity and price with the objective to ensure a basis volume of raw materials. Spot procurement supports company s flexibility requirements and the company can decide the spot procurement quantity with certain flexibility around the offered quantity. Price levels for contracts and spot business differ and are volatile in each period. Typically, companies operate with few key strategic suppliers for a respective product or raw material. Therefore, price-quantity models like in sales planning are less applicable. More often is the case that specifically commodity-type raw materials are procured on many-to-many exchanges, which is out of the scope in our case as described in section 3.2.6. If products are supplied by internal business units, transfer prices are applied following the contract procurement principles. 

Each model part - e.g. the sales planning part - is composed of single model elements such as objective functions, constraints or decision variables explained in the respective sections in mode detail. 

Sales planning described in subchapter 05.4 supports spot and contract sales management and planning of sales price effects using price-quantity functions. 

The left curve reflects the effect of sales decisions on average prices spot sales quantities lower than the spot demand quantity lead to average prices higher than the average forecasted price for an elasticity > 0 as illustrated in the sales planning requirements in figure 38. 

In the following, sales planning model variables and constraints are presented. 

Sales indicators are calculated after the optimization in a postprocessing phase. Sales indicators focus on decision support for the planner to quickly analyze the overall sales planning result and to specifically evaluate the quality of the turnover approximation results. 

The relative sales level aggregates the sales volume plan into one indicator to show the tendencies of the sales plan. For example, relative sales levels smaller than 1 indicate the planner that some sales locations exist receiving less volumes than demanded to be analyzed in more detail. 

The regional spot sales planning considers price and cost differences between regional customers and individual articles constrained by having to meet the total sales volume and turnover targets on global level. 

Regional sales planning has to decide the regional spot sales quantity xsaRs and the regional spot sales turnover, / a,k) e Is1, t e T. 

Regional Spot Sales Planning Objective Function... 

Regional sales planning objective is to maximize discounted regional spot sales profit considering sales turnover and the described sales- and distribution-oriented costs ... 

All of this information is obviously essential for project evaluation to determine if the company belongs in the business. But is it of any value to the sales manager and product manager when sales plans must be made by industry, by end use, district, territory and customer Presumably market research has identified volume and volume growth rates from the known profile of the products physical and cost properties. To be of assistance in developing the sales plan, however, it is necessary now to identify in very precise terms the volume potential in specific companies, for specific applications, over a one or two year time span. 

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