Sales and operations planning: an exploratory study and framework

Purpose – The paper seeks to develop a framework for sales and operations planning (S&OP) that is based on previous literature and company interviews. It is designed to help managers understand how effective their S&OP processes are and how to progress to advanced stages. Design/methodology/approach – The S&OP literature, is reviewed and the results of a number of company interviews are presented. These lead to a new framework, with descriptions of each stage, and to implementation insights for managers. Findings – After highlighting key dimensions for establishing a firm's S&OP maturity on a five‐stage framework and, with the use of this framework, exploring in a preliminary way the relationship between firm size or process type (job shop, batch flow, continuous flow, etc.) and its degree of S&OP plan integration, little apparent relationship was found. However, the data suggest that business processes are enablers of S&OP plan integration, but that information technology is not clearly so. Research limitations/implications – The results are based on a thorough review of the literature and on 15 in‐depth company interviews. Because the sample size is small, the results should be considered to provide only preliminary insights. Practical implications – Managers can use the framework to assess their S&OP process maturity. To advance to higher S&OP integration, managers should focus on leadership of business processes that can enable effective S&OP plan integration. These processes include organizational structure, meetings and collaboration across functional areas, and performance measurements. Information technology tools may also be enablers, but they do not appear to be the primary drivers. Originality/value – The framework separates business processes from information processes. It is quite extensive and therefore provides managers with an indication of the maturity of their S&OP processes. Also presented are insights into an intuitive, albeit challenging, process for advancing through the stages of maturity. Finally, a perspective on the future of S&OP integration is suggested that is focused on optimizing profits rather than myopically maximizing revenues or minimizing costs.