Framework for Sales and Operations Planning in Engineer-to-Order Environment
Kymäläinen, Sanni (2020)
Kymäläinen, Sanni
2020
Tuotantotalouden DI-tutkinto-ohjelma - Degree Programme in Industrial Engineering and Management, MSc (Tech)
Tekniikan ja luonnontieteiden tiedekunta - Faculty of Engineering and Natural Sciences
This publication is copyrighted. You may download, display and print it for Your own personal use. Commercial use is prohibited.
Hyväksymispäivämäärä
2020-04-03
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:tuni-202003302941
https://urn.fi/URN:NBN:fi:tuni-202003302941
Tiivistelmä
In recent years, sales and operations planning (S&OP) has become an integral part of the supply chain functions in many organizations. S&OP is seen as a way to create organizational alignment with the operating strategy and as a result improve revenue, decrease inventory levels and reduce costs. Thus, its positive effect on company’s performance has clearly been noticed. Despite the growing practical interest towards the implementation and execution of S&OP, the research around the topic has focused on consumer goods or pharmaceutical industry and on Make-to-Stock (MTS) environment.
This master’s thesis studies the execution and best practices related to S&OP in industrial manufacturing in Engineer-to-Order (ETO) environment. The goal of the research is to develop a framework for the execution of S&OP for companies operating in ETO context. In addition, a deeper understanding is sought on the factors that create the need to customize S&OP based on the requirements of ETO environment. These objectives were addressed by first developing a framework related to S&OP execution in MTS environment based on the current academic literature. Through an empirical study, the assumptions of the framework were tested by interviewing S&OP process stakeholders within an organization operating in ETO environment. This provided a chance to gain understanding on how S&OP is carried out in the context of ETO and what are the similarities and differences compared to S&OP in MTS environment. Based on these findings, the initial framework was modified to the needs and requirements of ETO context. As a result, an execution framework for S&OP in ETO environment was created. The framework constructed passed the weak market test carried out in this research and is being implemented in the case company.
The findings of this study imply that there are differences in the execution of S&OP between MTS and ETO environment and, hence, the processes should be managed differently. It was evident that S&OP should be customized according to the requirements of the business environment. The found factors with the greatest impact on the need to customize S&OP in ETO context are fluctuating demand, difficulty to forecast and wide and complex product portfolio. Due to the existence of these factors, there is a need to place high emphasis on demand planning, scenario analysis and strategy and risk analysis as part of the S&OP in ETO environment. In addition, finance should be integrated as part of the process and the transparency of the process and decision-making should be secured. The framework constructed in this study provides opportunities for organizations operating in ETO environment to enhance their S&OP practices and, hence, ensure continuous competitiveness.
This master’s thesis studies the execution and best practices related to S&OP in industrial manufacturing in Engineer-to-Order (ETO) environment. The goal of the research is to develop a framework for the execution of S&OP for companies operating in ETO context. In addition, a deeper understanding is sought on the factors that create the need to customize S&OP based on the requirements of ETO environment. These objectives were addressed by first developing a framework related to S&OP execution in MTS environment based on the current academic literature. Through an empirical study, the assumptions of the framework were tested by interviewing S&OP process stakeholders within an organization operating in ETO environment. This provided a chance to gain understanding on how S&OP is carried out in the context of ETO and what are the similarities and differences compared to S&OP in MTS environment. Based on these findings, the initial framework was modified to the needs and requirements of ETO context. As a result, an execution framework for S&OP in ETO environment was created. The framework constructed passed the weak market test carried out in this research and is being implemented in the case company.
The findings of this study imply that there are differences in the execution of S&OP between MTS and ETO environment and, hence, the processes should be managed differently. It was evident that S&OP should be customized according to the requirements of the business environment. The found factors with the greatest impact on the need to customize S&OP in ETO context are fluctuating demand, difficulty to forecast and wide and complex product portfolio. Due to the existence of these factors, there is a need to place high emphasis on demand planning, scenario analysis and strategy and risk analysis as part of the S&OP in ETO environment. In addition, finance should be integrated as part of the process and the transparency of the process and decision-making should be secured. The framework constructed in this study provides opportunities for organizations operating in ETO environment to enhance their S&OP practices and, hence, ensure continuous competitiveness.