An issue we\’re starting to hear more and more about is Joint Business Planning (JBP). We started hearing rumblings just before the NAED National from some larger distributors and manufacturers that
- the planning process was taking too long (not getting done until late Q1)
- field planning was not as strong as it historically was (there\’s an correlation between the quality of planning and the level of management of the planners), and
- development of a plan is great but that if there is no commitment to execution, then the time is wasted.
Given this, we launched a survey just prior to the NAED National to meeting participants. Our email stated:
As you meet with your manufacturers (or distributors) this week at the NAED National, we’d like you to ponder the state of joint business planning (JBP) with your key partners.
The NAED National represents an opportunity to discuss Q1 performance and assess the joint plans that were developed by your team earlier this year. The question becomes, “Has it been effective?” If the answer isn’t a resounding yes, then the next question becomes “How could the planning process be improved?”
Over the past couple of months we’ve spoken with a number of distributors and manufacturers who are frustrated with the JBP with key suppliers. In many instances it is companies (or perhaps people) cross-talking and not listening, there is a lack of specificity of information that can drive joint planning and a lack of actionable initiatives (and creativity) that both parties buy-into. And then there is the issue of pushing planning / implementation down from the executive suite / meetings to internal departments and into field initiatives. JBP, for many, is only an exercise in joint sales targeting, not a holistic planning process that drives top AND bottom line results for both parties.
Perhaps there is a need for change (at least that is what we’re hearing from some). We’re not talking about a “one-size fits all” but a preferred partner planning process.
So, as you think about your confidence level in achieving joint plans, consider how the process could be improved.
And we launched this survey.
We\’ve generated some responses to the survey but also had a number of conversations with manufacturers and larger distributors (regional players, $50M+ distributors).
- Many of the manufacturers commented that they do planning with the chains but there are significant challenges, on both sides, of getting the messaging / plans pushed down the internal chains of command as well as customizing the plans to fit regional / local needs.
- Distributors broke into two camps. One that sees value in planning but want to see it improve from their suppliers and recognize that they (and the manufacturer) need to improve. The other side essentially says, \”why do strategic planning with a supplier?\” In this instance they prefer to do regional / local sales account planning (specific targets) or set sales goals solely to satisfy establishing rebate objectives. In this scenario they essentially are saying \”we\’ll handle development of the plan to achieve a number with you so we can earn more rebate.\” And, in these instances, the local manufacturer sales organization is content as 1) it requires less work on their part and 2) perhaps it enables them to spend more time other places.
Since then we\’ve also:
- Spoken with a couple of distributors who directly correlate strategically planning with their successful growth with selected, key, lines that have driven their company\’s overall growth. In fact, one VP Supplier Relations said that they plan with 6-8 non-commodity lines. They look for companies that work with distribution (vs heavily focusing their sales organization on end-users) to generate demand, have strong agencies that are important to the distributor and have selected distribution. Organizational, holistic (sales, marketing, operational and financial) planning is done. In fact, this person recommended that any preferred supplier should have a planning process, should do it with selective people in a marketplace (not everyone) and that rebate programs should be differentiated based upon if there is a plan or if hope is the plan.
- Had conversations with a couple of manufacturers who are already starting to think about their 2017 planning process!
And we understand that one marketing group removed supplier joint planning from its member / manufacturer process.
Yes, the planning process can be improved. The questions become:
- Should strategic joint business planning be important to the distributor / manufacturer
- Is there a correlation between planning and goal achievement?
- Can this be a business differentiator?
- Should there be different levels of planning based upon joint agreement of importance of the relationship … and hence possibly appropriate differentiation in rebate compensation?
- How can the process be improved? What do you want from a planning process (process and information)?
Let us hear your thoughts. And please take our survey. Survey respondents will also receive a copy of the results.