I got into an interesting discussion the other day about the position of Demand Planner. The question was simple: Where should we put demand planner? in Procurement? Sales? Operations? or supply chain?

Apart from the general statement that "Of course it depends on the type of the product and the nature of the industry", I myself were interested to find a specific answer for this question. In this respect, it is good to review the general job description for demand planning.




Demand planners are usually responsible for gathering the data from sales department and also product plans and then translate them into buying plan (and production plan on high level?). If we expect this from demand planner, then it might be a good idea to put the demand planner in sales department. This looks like a good idea specially in organizations which are supply driven (Like pharma players).

On the other hand, this view has a problem inherent in it: Sales people have short term point of view and they usually don´t want to lose a sale so they tend to over-do the demand planning and change the data. That´s why they might not benefit as much as they expect from their demand planning activities: Forecast errors will remain unchanged in the most optimistic scenarios!

That´s why I suggest to put this position in supply chain division. Demand planning is a task which needs input and collaboration with different functions: Sales, Production, procurement and quality. Supply chain people usually have the holistic point of view which is necessary to collaborate with other functions. They also have a more long-term point of view which prevents them from over-planning.

What do you think? Do you agree with me?