Typical distributor annual planning is troubling for several reasons. Consider the following dreary but realistic annual planning scenario for a hypothetical distributor.
The sales forecast comes from the field and is wildly optimistic. Sales managers cajole their sales reps into projecting sales increases that can only be described as best-case. In turn, the regional managers badger the sales managers to inflate the revenue numbers further due to bulldozing from senior executives and the CEO. A notable exception to the optimism rule is the possibility that the sales organization has financial incentives based on exceeding the forecast, in which case the numbers are sandbagged. This situation only increases the arm-twisting from upper management who already suspects the foul play.