Complacencies That Arise in an Established Sales and Operations Planning (S&OP) Process
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Date
2018-05
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The Ohio State University
Abstract
The sales and operations planning process, or S&OP, is how businesses work cross-functionally to synchronize supply and demand to efficiently source, produce and distribute their products. While this business process is extremely important to a firm's bottom line, it is still a relatively new planning approach. Most of the currently available knowledge on S&OP focuses on the initiation of the process in the business with little research on how to continuously improve the process beyond high-level benchmarking. The purpose of my research is to build an enhanced understanding of where companies with a mature S&OP business process deviate from the prescribed activities. The primary hypothesis is that in a mature S&OP process, companies encounter issues that arise from complacency amongst the participating members through decreased cross-functional engagement, management undervaluing the value of the process, and participant unpreparedness to actively contribute. To test this hypothesis, interviews were conducted with cross-functional members of companies S&OP process. These interviews were semiformal with five open-ended questions being posed to the interviewee and further questions being asked based on ideas that emerged from their responses. The interviews are then analyzed using thematic coding to identify common themes across interviews. Initial results show that company's upper management has a tendency to make S&OP decisions outside of the formal meetings designed for this purpose and that members of the financial function of the business are less invested in the process than their supply and sales colleagues. These results suggest that firms fail to acquire significant participation from members outside of the "typical" supply chain. A potential way to address this issue would be to formally log issues to be brought into the S&OP meetings that engage the involved function. If further research were to be conducted, then an analysis of problems stated on these issue sheets and how they help reduce complacency could be further pursued.
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Sales and Operations Planning