Contingency between S&OP design and planning environment

• Published in: International journal of physical distribution & logistics management Vol. 45; no. 8; p. 747
• Main Authors: Kjellsdotter Ivert, Linea, Dukovska-Popovska, I., Fredriksson, Anna M K, Dreyer, H.C., Kaipia, Riikka
• Format: Journal Article
• Language: English
• Published: 01-01-2015
• Subjects: Case study; Food industry; Planning environment; Process parameters; Sales and operations planning (S&OP); Set up parameters
• ISSN: 0960-0035
• DOI: 10.1108/IJPDLM-04-2014-0088

Purpose – The purpose of this paper is to understand how companies design sales and operations planning (S&OP) contingent on the planning environment (PE). Design/methodology/approach – On the basis of the literature, the paper creates an analytical framework identifying the main constructs related to the PE and S&OP design, which is the basis for gathering and analysing qualitative data from eight cases in the food industry. The findings highlight the relations between S&OP and the PE, and are used for generating three propositions. Findings – Responding to the complex and uncertain PE, the companies set up S&OP on a stockkeeping unit (SKU) level, with the possibility of re-planning and a flexible planning horizon, thus differing from what has generally been suggested in the literature. In addition, the companies are aligning the inputs, activities, and outcomes of the S&OP process to the PE. Particularly important environmental contingencies are uncertainty connected to demand and supply, frequent product launches, and production network complexity. Product-related variables have a lower impact on the S&OP design. Research limitations/implications – The present study is limited to one industry only and a comparison between industries with larger data sets would be valuable in future studies. The study selected cases based on their S&OP maturity; further studies need to explore the effect of the alignment of S&OP and the PE on the planning performance. Originality/value – In the literature, S&OP is presented as a generic process with a strict formal design that is equal for all companies. The study provides insights into how companies adjust S&OP according to the PE.