Sales and Operations Planning: The effect of coordination mechanisms on supply chain performance

Abstract

Sales and Operations Planning (S&OP) is a means of facilitating cross-functional coordination, such as across the marketing-operations interface, but adopters of S&OP have not all benefited from S&OP to the same extent. This paper investigates the effect of S&OP on supply chain performance using the perspective of coordination and contingency theories. A structural equation model was developed in which six S&OP coordination mechanisms were hypothesized to contribute to improved supply chain performance. The model was tested using a global survey of 568 experienced S&OP practitioners. Our results indicate that Strategic Alignment and Information Acquisition/Processing are the mechanisms that most significantly enable superior S&OP outcomes. However, we find that a highly formalized S&OP Procedure inhibits supply chain performance. Furthermore, using a contingency theory perspective, increasing firm size and increasing experience in S&OP amplify the negative effect of a standardized S&OP Procedure upon supply chain performance. Our results suggest that organizational bricolage may be a coordinating mechanism of effective S&OP programs and that managers should empower ambidextrous S&OP teams to maintain balance using self-governing event-driven processes. This paper makes a novel contribution to the S&OP literature by providing evidence of a theoretical construct (organizational bricolage), which may trigger a re-evaluation of the efficacy of prescriptive S&OP procedures that have been advocated by some researchers and practitioners.

Sustainable supply chain management towards disruption and organizational ambidexterity: A data driven analysis

“… Aslam et al (2018) ; Eckstein et al (2015) ; Wamba et al (2020) ; Aslam et al (2020) ; Shukor et al (2020) ; Alzoubi & Yanamandra (2020) ; Suresh et al (2020) ; Aslam et al (2018) ; Shqairat & Sundarakani (2018) ; Tuan (2016) ; Liu et al (2015b) . I9 Supply chain ambidexterity SC ambidexterity refers to a manufacturer's efforts to refine/extend its existing resources and to develop new supply chain competencies and yield performance benefits, especially for large manufacturing firms Partanen et al (2020) ; Partanen et al (2020) ; Aslam et al (2020) ; Ojha et al (2018) ; Lee & Rha (2016) ; Princes (2020) ; Pu et al (2018) ; Burin et al (2020) ; Souza-Luz & (2019) ; Güemes-Castorena & Ruiz-Monroy (2020) ; Makhashen et al (2020) ; Shams et al (2020) ; Yalcin et al (2019) ; Goh & Eldridge (2019) ; Im et al (2019) ; Qamar et al (2019) . I10 Supply chain collaboration SC collaboration is a model in which members of the supply chain share risks and resources in order to improve the competitive advantage of the entire supply chain.…”

A sales and operations planning application in the Brazilian subsidiary of a multinational chemical company

“…The S&OP plan adoption by the entire company is a key success factor to improve the enterprise's performance (Snow, 2007). On the other hand, Goh and Eldridge (2019) indicate that a much formalized S&OP might be an inhibitor of the firm performance and recommend some flexibility to respond to unplanned issues. The Brazilian subsidiary has a standardized S&OP process running for years; however, other businesses, regarded as usual activities, are also performed in parallel within the business functions, allowing the organization to respond to unexpected issues in the short term.…”

“…Many authors have developed their maturity models (MM) for S&OP, indicating the pathway to improve performance (Goh and Eldridge, 2019). These MM (e.g.…”

“…Additionally, they verify that the negative impact of a standardized S&OP process on the supply chain performance grows as the company size and the experience in S&OP increase. Goh and Eldridge (2019) finally indicate that "organizational bricolage" may be a coordinating mechanism of effective S&OP programs. In their perspective, S&OP teams should have more autonomy to respond with flexibility and fast to internal urgencies or changes in the business environment.…”

“…S&OP contributes to supply chain improvements and supports the achievement of companies' objectives (Wing and Perry, 2001), including profit (Grimson and Pyke, 2007). S&OP is a cyclic process that balances the market demand with the company's supply capacity and reconciles different business function plans in a single plan for the entire organization, in line with the strategic plan (Wallace and Stahl, 2006;Thomé et al, 2012a;Feng et al, 2013;Tuomikangas and Kaipia, 2014;Goh and Eldridge, 2019). If S&OP is properly applied, it may improve business performance, increase profit, and improve supply chain results regarding service levels, demand forecast accuracy, inventory management, and asset utilization (Thomé et al, 2012a).…”