Framework for measuring performance of the sales and operations planning process

Abstract

Purpose The purpose of this paper is to develop a framework for measuring the S&OP process performance. Design/methodology/approach The method used is a multiple case study of five companies from different industries based on data from 12 structured interviews. Findings The main result is a framework to measure the S&OP process. It includes concrete suggestions for organizations when developing measures to increase effectiveness and efficiency of the process. It will also help organizations to standardize measures and to enhance organizational transparency. Our results include measures for every step of the process as well as for the outcome of the process. The authors highlight the importance of cross-functional measures along with measures that focus on how to conduct the process. The framework is founded on a set of criteria on appropriate measures such as comprehensiveness, internal process efficiency, horizontal and vertical integration, internal comparability, and usefulness. The study contributes to performance measurement literature and the S&OP literature. Research limitations/ implications Validation of the framework is desirable in similar as well as other contexts. Implementation challenges should also be investigated. Practical implications The framework provides guidelines in order to measure, analyze and improve the effectiveness and the efficiency of the process. Originality/values This is the first framework for measuring the S&OP process that includes detailed measures for each step of the process, for the outcome of the process as well as how to conduct the process itself.

Proposal of a model for sales and operations planning (S&OP) maturity evaluation

“…This point has not been discussed in literature yet, and deserves more academic attention. This finding can also bring the discussion of people's role in the S&OP process, since it is the human element that seems to be bringing more advanced maturity gain (Lapide, 2005a;2007;McCormack & Lockamy, 2005;Wagner et al, 2014;Hulthén et al, 2016). McCormack & Lockamy (2005) highlighted that informal mechanisms such as cross-functional collaboration are essential to S&OP effectiveness.…”

“…As an academic contribution, this paper brings a different quantitative based model to analyze S&OP maturity that can deal with imprecise information. In addition, "cultural" element is again highlighted as it was in other previous studies (Lapide, 2005a;2007;McCormack & Lockamy, 2005;Wagner et al, 2014;Hulthén et al, 2016), but from now it is formally incorporated in the proposed maturity model. With regard to practical contributions, this research has the intention to assist companies with S&OP process implementation, providing insights through an orientation that enables organizations to discover the actual level of S&OP maturity.…”

“…Second, this study presents a real life application in order to illustrate how this approach can be applied in different scenarios. Empirical applications are limited in S&OP literature, in general (McCormack & Lockamy, 2005;Thomé et al, 2012a, b;Tuomikangas & Kaipia, 2014;Ivert et al, 2015a, b;Swaim et al, 2016) and even scarcer considering maturity models, with few studies existing on the subject (Hulthén et al, 2016). Third, the utilization of S&OP enablers to measure the process maturity make it easier to visualize gaps in the process and to discover which actions (in terms of S&OP enablers) should be taken.…”

“…The most recent study that has arisen is a qualitative framework developed by Hulthén et al (2016) that aims to measure S&OP performance. This research is based on multiple case studies, among cross-industry organizations, in which data has been collected in five companies.…”

“…More recent research started to realize the importance of studying real contexts, for example, Goh & Eldridge (2015) explore S&OP in two companies in the context of new product introduction, in which data available in the supply chains was gathered and assessed according to an S&OP maturity framework. Hulthén et al (2016) evaluated S&OP maturity in five companies. Wagner et al (2014) also explored S&OP maturity evaluation in a pharmaceutical company that was in the early stages of its implementation.…”