Marketing Research On Sales And Operation Planning (Research Paper Sample)

Sales And Operations Planning
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Sales And Operations Planning
This is a type of business management process whereby the leadership team achieves various functions of the organization including focus.S&OP may include an updated forecast that leads to a new product development plan in that short product life cycles requires a tighter S&OP.
S&OP is also a cross-functional and integrated tactical planning process that unites different functional business plans into an integrated set of plans internally and in the SC, with the ultimate goal of creating value and impact upon firm's performance.
According to Boyer (2009),sales and operation planning is described as the top management handle on business which requires balancing demand and supply on a regular and formal basis.
S&OP is identified as a tool that is used to bring together various business plans or rather functional plans into a single unified plan within the firm as stated by Thome Et Al(2012). It links all operations that are antecedent and subsequent to operations. Many organizations nowadays use various tools to execute S&OP.This may include a software called SAP. This software is important in organizations because through S&OP, it brings about growth of the firm in terms of sales hence profitability, which consequently brings about customer satisfaction.
Features of S&OP
It a cross-functional and integrated planning process within a firm
Sales and operations planning is planning processes that involves different teams in an organization interacting. These teams come from various departments have different ideas whereby they come up with a common plan.
It integrates all appropriate plans in a unified plan;
S&OP combines all the different identified plans in the firm to a uniform plan for the purpose of proper growth of the firm.
The planning horizon ranges from three to 18 months;
The planning is not a one day thing but a process that needs time to be implemented. It is a step by step process and ranges from three to eighteen months for it to be fully implemented.
It bridges strategy of the firm and operations
By creating a unified plan, there is no need for implementing strategy and at the same time conducting operations.S&OP therefore bridges the gap between the strategy of the firm and the operations for efficient running of the firm.
It creates value and is linked to organizational performance.
Sales and operations planning not only unifies all plans but also in the process creates value and brings about change in the organizational performance on the positive side.
In order to improve S&OP, the following measures are used. They include;
Use of Information technology. This has shown a great impact on S&OP whereby it has achieved integration and improved interrelationships between businesses.
According to Valentine, inventory optimization software can be integrated with traditional material requirement planning.
The importance of improving S&OP is that the operation costs are reduced and top line sales revenue improved.
S&OP is an active research for business practioneers whereby much of the past research has been focused on individual processes which are often treated as independent of one another. When it comes to linking SCM, S&OP with interactive marketing tools and processes, Interactive marketing in the B2B environment for the purpose of integrating supply chain operations has been happening all along. For example, sharing of information between companies has been facilitated by electronic data interchange (EDI) which has been used in the 1970s- (McCall, A. S. 2013).
In moving S&OP and interactive marketing tools in the web era, traditional marketing applications for online communities have focused on engagement with customers in the B2C environment and can be utilized by supply chain members during interactive sessions to come up with a unified plan. Effective integrations of interactive technologies have brought about connections that are mutually exclusive to not only individual firms but also supply members.
SRM is usually software driven and contains programs which include SAP and oracle which contain SRM modules. It becomes more complex when multiple tiers of suppliers whereby each actor generally tries to manage their own systems rather than running an integrated system.SRM practices could be improved through examination of cost and current practices. Direct collaboration between customers and businesses can be enhanced through innovation community technologies. It is however utilized in various ways that capture the most innovative ideas. Seller-buyer interface is the only area of S&OP that can benefit from interactive marketing tools, techniques and processes.
S&Op Practices
These are defined as management processes and practices of both the horizontal and vertical alignment within the firm so as to bridge the gap between demand and supply in order to improve performance.Here,the sales and operations planning consists of various practices.These practices are;
organizational and technological coordination of manufacturing and new product design
information technology to measure information sharing and planning
Dedicated information systems.
Studies that were developed by several authors concluded the existence of S&OP impact on firm performance.
Definitions and measurements of complexity
In classic contingency research, complexity is referred to as contextual variable. Complexity is measured with different product, technological and organizational variables. Complexity can be either detailed or dynamic. Detailed complexity can be measured by the number of components while dynamic complexity is referred to as the interconnectedness and unpredictability of the system.
Dalton and Lawrence (1970) measured product complexity by the number of parts used in assembly. Funk (1995) also measured product complexity by the number of steps or parts involved in product technology and by the type of industries, ranging from low to high complexity.
Contextual variables are used to moderate the impact of S&OP on firm’s performance. This has been shown in the case of integration with suppliers in moderating the impact of S&OP on manufacturing operation performance. On this effect, the following hypotheses are put forward. These are:
Product complexity positively moderates the impact of S&OP practices on manufacturing operational performance.
The degree of advance of the core process technology of the dominant activity of the manufacturing firm positively moderates the impact of S&OP practices on manufacturing operational performance.
Product complexities boost positive impact on quality. S&OP is measured as a bundle of practices. The impact of these practices on different dimensions is empirically tested. These practices in particular those of coordination of manufacturing and new product design, information technology and dedicated information systems do impact upon operational performance (Wallace, 2013).
Moderating effects on complexities show that companies that produce more complex products or use complex technological practices tend to benefit most from the sales and operations planning. Scales for measuring S&OP are still being developed and tested hence future research should develop scales for measuring S&OP as a comprehensive process and determine its impact on performance. The fact that the impact of S&OP on performance was found to be to be contingent on complexity is motivation for future research to examine other potentially relevant contingency factors for S&OP implementation, such as economic context, SC configurations, and SC power relationships, country of origin and culture, type of industry and production processes. This would help the S&OP research field move forward from the establishment of the overall effectiveness of S&OP to the understanding of the detailed contingencies of its implementation.
Sales and operations planning process is that process that manages businesses efficiently and effectively in the business environment. Companies that employ S&OP acquire both hard and soft benefits. The hard benefits include:
* Higher Levels of On-Time Shipments
S&OP in companies bring about the fast delivery of products in the supply chain to the customers. This brings about efficiency of practices hence improved performance.
* Lower Inventories
In this planning process, the companies tend to cut production to suit the customer demands hence reduced production costs thereby improved performance.
* Shorter Customer Lead Times
Companies benefit in that the time it takes to deliver a product to the market is reduced hence improving customer satisfaction.
* Reduced Time to Launch New Products
Companies that use S&OP use high technology hence improved production facilities thereby taking less time to produce new products which may take a lot of time to penetrate into the market.
* Improved Plant Productivity
Improved technology improves plant productivity which reduces cost production thus enhancing growth in sales which consequently increases profits of the company.
Soft benefits can't be quantified, but in many successful S&OP-using companies, they're considered of equal importance or nearly so. Soft benefits include:
* Enhanced Teamwork
Since there is integration of different teams in various departments, when they bring forth ideas team work is developed in the company, Teamwork is a value that is cherished by many companies and is found to be very important to the growth of the company.
* Improved Communications - Institutionalized
Soft wares developed for communication of teams and individuals are...