Framework for measuring performance of the sales and operations planning process

A decision making framework for comparing sales and operational performance of firms in emerging market

Sales and operations planning translates the requirements of the customers at the market place (related to new and/or existing products and services) into actionable tactical plans to drive the activities of the value chain of the organization. The present work aims to provide a multi-period and multi-perspective evaluation framework to compare the sales and operational performance (SOP) of firms in an emerging market. SOP is one of the frontline KPIs that describes the efficiency and effectiveness of the sales and operations planning. There is a scantiness in the extant literature about well-defined indicators to measure SOP. The current work fills the gap in the literature by developing a hybrid multi-criteria decision making (MCDM) framework utilizing the Logarithmic Percentage Change-driven Objective Weighting (LOPCOW) and Evaluation based on Distance from Average Solution (EDAS) models for a novel application in assessing SOP. From the data analysis, it is also evident that there is a variations in the year wise ranking of the companies. However, all individual year wise rankings maintain statistically significant correlations with the aggregated ranking. For aggregation purpose, Borda Count Method is used. The companies like ITC Limited, Hindustan Unilever Ltd., Avanti Feeds Ltd., Britannia Industries Ltd., and Symphony Ltd. hold the top five positions on aggregate. The comparison with other MCDM models is made and sensitivity analysis is carried out. The present work is a first of its kind that would encourage the analysts and the policy makers to evaluate the sales and operational performance using a scientific way.

The direct effect of B2B sellers' skills on relative and absolute sales performance: a dual measurement approach

Purpose

The purpose of this paper is to test the direct effect of B2B sellers' skills on relative and absolute sales performance.

Design/methodology/approach

Based on a questionnaire survey and deductive approach. A total of 236 useable questionnaires out of 315 are returned, generating a response rate of 74.9%.

Findings

Only one out of twelve hypothesized relationships in the research model of the direct effect of B2B sellers' skills on relative and absolute sales performance turned out to be significant.

Research limitations/implications

Indicate that the researchers’ current understanding of the effect of sales performance indicators on sales performance, based on B2B sellers' skills, is narrow and simplistic.

Practical implications

Results indicate that there are skills other than the tested ones (i.e. interpersonal, adaptiveness and selling-related knowledge), that can have direct effects on B2B sellers' relative and absolute sales performance.

Originality/value

Sheds light on the ambiguous direct effect of B2B sellers' skills on sales performance and the almost non-existent direct effect on B2B sellers' relative and absolute sales performance.

Global sales and operations planning: A multinational manufacturing company perspective

The purpose of this paper is to analyse the global Sales and Operations Planning (S&OP) process and investigate the steps to support consolidated business planning in worldwide operations and large-scale supply chains. The paper conducts a case study at a multinational manufacturing company applying an abductive approach. It combines the deductive logic from theory and the inductive logic from field observation in an attempt to elaborate further on theory on global S&OP. The analysis is structured and guided by a novel framework for global S&OP, which is developed based on the theoretical background and the case study findings. The research findings characterise the S&OP process for global operations and identify challenges related to the need to synchronise the subsidiaries' S&OP efforts worldwide to deal with different contingencies of these subsidiaries, and to manage and analyse a large amount of information gathered. The research reveals how the subsidiaries' performance is analysed by top executives along the global S&OP process, feeding strategic initiatives in the organisation and identifying business opportunities like benchmarking among subsidiaries, synergies with other management practices, and global gains. This paper offers a novel investigation of the global steps on S&OP in a real-life setting, offering a well-documented characterisation of the process that goes beyond the traditional local approach. Moreover, it is the first study to reveal challenges and expected outcomes of such a global perspective for S&OP. The theoretical advancements of S&OP research offered herein aid scholars, opening avenues for middle-range theorising, highlighting the cross-disciplinary nature of the domain, and discussing the use of concepts from related disciplines like Economics, Psychology, and Information Systems. The research findings can also assist executives, especially from multinational manufacturers, in their efforts to consolidate global planning.

Developing and implementing contextualised S&OP designs – an enterprise architecture management approach

Purpose

This paper provides a five-step Enterprise Architecture Management (EAM) approach to systematically guide the development and implementation of contextualised Sales and Operations Planning (S&OP) designs.

Design/methodology/approach

A case study is conducted at a European chemical manufacturer. The research applies the five-step approach, embracing the descriptive and prescriptive EAM functions combined with the lens of contingency theory.

Findings

The research findings demonstrate the suitability of the proposed EAM approach for the contextualisation of S&OP designs from a contingency theory perspective. Its descriptive EAM function serves to assess context-specific S&OP challenges and enables to analyse the contextual fit of S&OP designs. Its prescriptive EAM function guides the development and implementation of context-specific S&OP designs towards increasing the S&OP effectiveness. EAM's integrated view onto people, process and information technology served to analyse current practices on the dynamics of S&OP contextualisation in innovation- and quality-driven contexts. Thereby, the paper contributes to a better S&OP contingency understanding.

Practical implications

The EAM approach offered in this paper provides a concrete and practically applicable guidance to support managers to face their context-specific challenges and guide the contextualisation of their S&OP designs to increase the S&OP effectiveness. Moreover, practitioners can improve their understanding regarding the need for S&OP design adjustments to reflect changes in their companies' contingencies.

Originality/value

The research introduces a novel EAM approach for S&OP contextualisation, particularly reflecting contingency theory's dynamic view of structural adjustments to regain fit (SARFIT).

Empirical and theoretical perspectives in sales and operations planning

This paper’s purpose is to evaluate empirical and theoretical perspectives in Sales and Operations Planning (S&OP). The methodology consists of a systematic literature review, analysing 292 publications from academics and practitioners. The results reveal that the empirical evidence has been initially obtained by practitioners and subsequently acquired by academics with a growing interest in recent years. Three main research streams are identified: S&OP and performance, implementation of S&OP, and contextualisation of S&OP designs. The investigation of theoretical foundations reveals an upward trend in external general theory usage and first signs of internal theory development in S&OP. The research findings call for more exploratory research to enhance the knowledge in the identified research streams and their interrelation. Herein, applying the design science approach is recommended to integrate practitioners into academic research. Further implications embrace a call for more theory-informed empirical S&OP research in a two-prone agenda: applying general theories from other fields and developing internal theories through middle-range theorising. A limitation of this paper is its focus on empirical studies, not embracing conceptual papers. Applications of this paper’s findings can help academics and practitioners to advance their understanding of the S&OP phenomenon. The awareness of study findings in the three main research streams, combined with empirical and theoretical research implications, can support the development of solutions to improve the S&OP effectiveness and evidence-based decisions in real-life settings. This work’s originality lies in the analysis of the S&OP literature with the focus on the evolution of empirical evidence and the theoretical foundations.

Enabling integrated business planning through big data analytics: a case study on sales and operations planning

Purpose

The purpose of this study is to investigate how big data analytics capabilities (BDAC) enable the implementation of integrated business planning (IBP) – the advanced form of sales and operations planning (S&OP) – by counteracting the increasing information processing requirements.

Design/methodology/approach

The research model is grounded in the organizational information processing theory (OIPT). An embedded single case study on a multinational agrochemical company with multiple geographically distinguished sub-units of analysis was conducted. Data were collected in workshops, semistructured interviews as well as direct observations and enriched by secondary data from internal company sources as well as publicly available sources.

Findings

The results show the relevancy of establishing BDAC within an organization to apply IBP by providing empirical evidence of BDA solutions in S&OP. The study highlights how BDAC increase an organization's information processing capacity and consequently enable efficient and effective S&OP. Practical guidance toward the development of tangible, human and intangible BDAC in a particular sequence is given.

Originality/value

This study is the first theoretically grounded, empirical investigation of S&OP implementation journeys under consideration of the impact of BDAC.

The S&OP process and the influence of personality and key behavioral indicators: insights from a longitudinal case study

Purpose

The purpose of this paper is to extend the research domain of Sales & Operations Planning (S&OP) beyond the hard issues by focusing on soft issues in S&OP processes. This paper aims to investigate how consciousness of different personality types can affect S&OP processes.

Design/methodology/approach

This paper is based on a single longitudinal case study from a medium-sized enterprise with a data collection period of more than two years. This paper is based on observation and interviews gathered at several stages during pilot implementation and operation phases.

Findings

This paper indicates that a focus on behavior using personality type theory and key behavioral indicators has provided a common framework for understanding how the S&OP process is impacted by different personalities and behavior. This knowledge has increased the awareness of which behavior sustains a silo mentality and which behavior breaks it down. Quotations are used to provide substance of this explorative topic.

Research limitations/implications

As a single case study, this paper only provides results for analytical generalization.

Practical implications

Consciousness of behavioral elements in S&OP processes is proposed here as a complement to key performance indicators as levers to implement and obtain sustained operation of S&OP.

Originality/value

This paper is the first explicitly integrating personality type theory for a better understanding of implementing and operating S&OP processes. This paper contributes with a new understanding of S&OP success factors and how a common language may improve process efficiency.

Proactively and reactively managing risks through sales & operations planning

Purpose

Risks can easily disrupt the demand–supply match targeted by sales and operations planning (S&OP). As surprisingly little is known of how organizations identify, assess, treat and monitor risks through tactical planning processes, this paper zooms in on the S&OP set-up and process parameters to explore how risks are managed through S&OP.

Design/methodology/approach

A multiple case study analyzes the S&OP processes of seven organizations in the process industry, drawing on 17 in-depth interviews with high-ranking representatives, internal and external documents, and a group meeting with participating organizations.

Findings

The study finds that organizations proactively design their S&OP based on their main risk focus stemming from the planning environment. In turn, such designs proactively support organizations' risk identification, assessment, treatment and monitoring through their S&OP execution. Reactively, a crisis S&OP meeting – making use of the structure of S&OP – can be used as a risk-treatment tool, and S&OP design can be temporarily adapted to deal with emerging risks.

Originality/value

This study is among the first to empirically elucidate risk management through S&OP. S&OP design, execution and adaption are identified as three interconnected strategies that allow organizations to manage risks. The design enables risk management activities in the monthly execution of S&OP. The reactive role of S&OP in risk management is particularly novel.

Investigating the role of demand planning as a higher-order construct in mitigating disruptions in the European supply chains

Purpose

The goal of the paper is twofold. First, it aims to empirically conceptualize whether a wide array of fragmented demand planning activities, performed in supply chains, can be logically categorized into actionable sets of practices, which then form a broader conceptualization of the demand planning process. Second, regarding certain contextual factors, our research seeks to investigate the contribution of demand planning, as a higher-order construct, to mitigating disruptions induced by operational risks in supply chains.

Design/methodology/approach

In this study, PLS-SEM was used to estimate the reflective-formative nature of the model. The results of PLS-SEM were additionally complemented by the assessment of the predictive power of our model. Finally, to reveal possible contingency effects, the multigroup analysis (MGA) was conducted.

Findings

The study suggests that demand planning process (DPP) is a second-order construct that is composed of four sets of practices, including goal setting, data gathering, demand forecasting, communicating the demand predictions and synchronizing supply with demand. The study also reveals that the demand planning practices, only when considered together, as a higher-order factor, significantly contribute to mitigating disruptions driven by operational risks. Finally, the research shows that the strength of the impact of demand planning on disruptions is contextually dependent.

Research limitations/implications

While the study makes some important contributions, the obtained findings ought to be considered within the context of limitations. First, the study only investigates disruptions driven by operational risks, ignoring the negative consequences of environmental risks (terrorist attacks, natural disasters, etc.), which may have a far more negative impact on supply chains. Second, the sample is mostly composed of medium and large companies, not necessarily representative of demand planning performed by the entire spectrum of companies operating in the market.

Practical implications

The study shows that to effectively mitigate disruptions induced by operational risks, the demand planning practices should be integrated into a higher-order construct. Likewise, our research demonstrates that the intensity of demand planning process is contingent upon a number of contextual factors, including firm size, demand variability and demand volume.

Social implications

The study indicates that to mitigate disruptions of operational risk, demand planning as a higher-order dynamic capability can be referred to the concept of organizational learning, which contributes to forming a critical common ground, ensuring the balance between formal and informal dynamic routines.

Originality/value

The paper depicts that to fully deal with disruptions, the demand planning practices need to be integrated and categorized into the dedicated higher-order. This may lead to forming demand planning as a higher-order dynamic capability that provides a more rapid and efficient rebuttal to any disruptions triggered by operational risks.

Context-based sales and operations planning (S&OP) research

Purpose

The purpose of this paper is to describe and categorise how current literature contributes to sales and operations planning (S&OP) research on how contextual variables affect S&OP design and to frame future areas for context-based S&OP research.

Design/methodology/approach

The method used was a systematic literature review. Studies for review were obtained through a keyword search of five relevant databases, manual searches of relevant journals and snowballing of citations in relevant papers. In total, 571 papers published between 2000 and 2017 were assessed, and 68 papers were included in the review.

Findings

The review found that S&OP design depends on industry, dynamic complexity, detail complexity and organisational characteristics. The findings of the literature review suggest that future research should study the roles of industry, complexity, system and process and organisational characteristics in S&OP design.

Research limitations/implications

The findings revealed several gaps in the literature on context-dependent S&OP design. To address these gaps, an agenda for future S&OP contingency research is developed.

Practical implications

The findings revealed which contextual areas and specific S&OP design issues must be considered when designing and implementing S&OP.

Originality/value

This study focussed on identifying relevant research on S&OP design by analysing the contribution of literature to a research framework inspired by contingency-based research of operations and supply chain management.