Teknillinen tiedekunta, 2014
The purpose of this research is to investigate whether the Sales and Operations Planning process (S&OP) has had an impact on the company’s business performance, and which factors have increased or decreased the efficiency of the process. In addition, this study examines how the process could be improved. This research is conducted as an assignment from a client company and the findings aim to support the client company when expanding its S&OP process to its other business units.
To obtain the required information for achieving the objectives of this research, a broad literacy review on the subject is presented and experiences from three case companies are studied. The empirical part of the study was done by interviewing the key players of S&OP process from each case company.
S&OP is a strategic business process which objective is to establish a balance between demand and supply by providing the company with a better knowledge of customers’ demand and by enhancing planning and cooperation between functions of the organization. The process facilitates the linkage of strategic plans to the day-to-day operations. Generally S&OP is performed as a monthly process, as a cycle with five phases. These phases are as follows: data gathering, demand planning, supply planning, pre-meeting and executive S&OP-meeting.
The findings clearly indicate that the S&OP had positive impacts on the business performance for each case company. Measurable performance indicators such as on-time delivery, inventory turnover and forecast accuracy had improved. Additionally, the use of S&OP had led to improvements in other areas as well, such as in the communication, information sharing and cooperation between organizational functions. The most remarkable challenges were discovered in demand forecasting, integrating strategic planning and measuring the performance. Suggestions for improvements given to the case companies concerned areas such as the setting of objectives, measuring the process and producing forecasts.
Sales and Operations planning, S&OP, Supply chain management