Sales and Operations Planning Revisited: Linking Operational and Financial Performance

Despite the widespread adoption of enterprise resource planning (ERP) systems, it is known that these systems suffer from inherent shortcomings which undermine their decision support capabilities. The crux of the problem lies at the midterm planning level (i.e. sales and operations planning, S&OP), as the static procedures used at this level are inapt to reflect the complexities and dynamics of today’s increasingly demanding environment. While the academic community has largely focused on fixing this problem by adding additional “intelligence” that allows the systems to reflect dynamic behavior, we claim that the resulting fixes fall short on a key aspect: they focus purely on operational performance indicators, and fail to substantiate the impact on financial performance metrics. This knowledge gap provides a challenging research opportunity, with a potentially huge impact on planning practice. We provide an overview of the recent contributions in this field, and highlight the most urgent topics for further research.