Learning from sales and operations planning process implementation at ASTRO Inc.

Abstract

PurposeThe purpose of this case study is to develop a complete understanding of the sales and operations planning (S&OP) process implementation effort at ASTRO Inc. and to determine the influential factors that led to its success, the interrelationship between them, as well as the level of influence of each factor compared to their counterparts. As we trace the evolution of S&OP in the organizational context, the view that its implementation leads to a positive impact in changing the way companies do business is not in itself novel. To date, there is limited academic investigation on how and why the S&OP process implementation leads to a successful organizational transformation.Design/methodology/approachThe data used in this case study were collected through semi-structured interviews with selected employees and through documentary analyses based on the archives at ASTRO Inc., a large North American company, for the period from 2016 to 2018. The paper adopts a methodology based on a retrospective study and interviews.FindingsThe analysis shows that the S&OP process design and its implementation required efforts on many distinct but complementary fronts to be successful. However, the level of influence varies across the organizational enablers that contribute to this success. Its successful implementation is fundamentally dependent on the managers' ability to create mindset changes in the organizational culture, and to plan and coordinate the S&OP process deployment. The key enablers need to be skillfully combined, taking into account the contextual variables, namely, the company's internal context, the company's external context and the specific characteristics of the industry in which the company belongs.Originality/valueThe current study provides a better understanding of the implementation of the S&OP process and highlights the key enablers that led to its successful implementation. It provides practical managerial guidelines for designing, deploying and using an S&OP process in response to and in anticipation of customer demands, and competitive pressures.

Comparative Analysis of Key Success Factors in S&OP: Focusing on Manufacturing and Retail Industry in South Korea

“…To overcome this complexity and make strategic decisions aligned with long-term goals, it is essential to be supported by the top leadership. Tchokogué et al [4] studied the case of American manufacturer ASTRO Inc. and highlighted that the success of the S&OP process fundamentally depends on the ability of management to bring about a mindset change in the organizational culture and to plan and co-ordinate the S&OP process, which is consistent with the results of this analysis. On the other hand, in the retail industry, to secure competitive advantages, it is vital to develop an optimal distribution network and well-designed S&OP processes while enhancing the customer service level at each geographical market.…”

“…The authors highlighted collaboration and integration among different departments through organizational integration, a standardized S&OP process that reflects a methodology that is agreed upon and understood by the entire organization, and an S&OP priority that considers employee involvement, empathy, and responsibility as key antecedents of S&OP success. Tchokogué et al [4] derived 15 enablers for S&OP success based on a literature review and empirical data from ASTRO Inc., a plumbing and fittings manufacturer in the United States from 2016 to 2018, and proved that these enablers have different importance at the strategic, tactical, and operational levels. Especially, the leadership and S&OP culture are important at all levels, but S&OP prioritization is most important at the strategic level, the selection of appropriate support tools (IT) is important at the tactical level, and training is important at both the tactical and operational levels.…”

“…Sub-factors of the "Strategic Support and Leadership" were identified as "Top management support and commitment", "Consensus on goal and importance to the S&OP process", and "Dedicated S&OP team and team member skills". First, leadership is essential to provide direction and drive change in S&OP [4,6,16,25,31,34]. Leadership must motivate the team with a clear vision and strategy and manage the process effectively.…”

“…It means that companies should make their supply chains more agile and resilient. Also, it can be regarded as a stern warning that corporates cannot survive without strategic operational plans and agile response mechanisms [3,4]. To cope with these challenges, most companies are trying to enhance the effectiveness of supply chain management based on collaborative processes [5], and one such effort is the implementation of new or enhanced sales and operations planning (S&OP) process.…”

“…One of the major reasons of failure is the lack of consideration of structural characteristics such as upstream and downstream within the same supply chain, which is related to industry-specific characteristics. Although these characteristics have a significant impact on S&OP operational strategies and processes, it is not easy to find cases that consider the basic characteristics of supply chains while designing S&OP strategies and operational processes [4,14,15].…”