Gest. Prod., São Carlos, v.22, n. 3, p.

662-677, 2015
[Link]

Dynamics of Sales and Operations implementation

Planning: main challenges

Dynamic implementation of Sales and Operations Planning: main

challenges

Carolina Belotti Pedroso1

Andrea Lago da Silva1

Summary: There are several challenges that companies face today, including the need to build
greater synchronization between demand and supply. The objective of this article is to characterize the dynamics of the process of
S&OP, identifying the motivation, the objectives, the challenges, and the main results achieved by companies that
it has already been adopted in Brazil. Initially, a literature review was conducted and then a multi-case study in three
Brazilian companies. Among the main motivations, there was an observation of information alignment (forecast of
sales and capacity and greater market knowledge) between the areas. Among the objectives were: to improve the
planning, especially capacity, including Sales in the process. The main challenges were: to improve the
fragmented communication and building visibility of capacity management. As a result, an improvement was observed.
in communication, optimization of capacity planning, greater accuracy in sales forecasting. The main
the contribution was to identify that the implementation of S&OP will require various challenges to be faced in order to achieve
that the process can deliver the expected results for operations management.
Keywords: Sales and Operations Planning; Operations management; Demand management and supply chain management
supplies.

Abstract: The need to build greater synchronization between the demand side and the supply side of the business.
is among the many challenges faced by a company. The objective of this paper is to characterize the dynamics of
the S&OP process by identifying the motivation, goals, challenges, and results achieved by organizations that have
adopted these processes in Brazil to promote this synchronization. To this end, a systematic literature review followed
by a multi-case study on three Brazilian organizations were carried out. The initial objective was to improve the
planning, in particular the capacity, while including Sales in the process. The main challenges were to improve the
fragmented communication process and build visibility regarding capacity management across the organization.
Improvement in communication, optimization of capacity planning and greater assertiveness in sales forecasting
were some of the results of the S&OP process implementation. The main contribution of this research was the
identification of the idea that S&OP implementation requires facing several challenges so that the process
can deliver the expected results for operations management.
Keywords:Sales and Operations Planning; Operations management; Demand management and supply chain
managements.

1 Introduction
The S&OP process originated in the decade publications on the subject predominantly in
from 1950, starting from the aggregate planning of manufacturing area (Gianesi, 1998; Ivert & Jonsson,
production, evolving into a business process 2010).
broader (Singhal & Singhal, 2007), known Sales and Operations Planning (S&OP) can be
Manufacturing Resource Planning (MRP II), conceived as a process led by upper management
popularized in the 1980s (Wallace & Stahl, management, which has the responsibility to evaluate and
2003; Dougherty & Gray, 2006; Thomé et al., 2012b. review projections, considering the time for demand,
The initial applications occurred, for the most part, supplies, products, strategic projects and plans
in industries (Grimson & Pyke, 2007), as financial, aimed at aligning demand and
currently this trend continues to be present, with supplies. It is a planning process

Department of Production Engineering, Federal University of São Carlos - UFSCar, Washington Luís Highway, Km 235,
1

CEP 13565-905, São Carlos, SP,Brasil, e-mail: [Link]@[Link]; deialago@[Link]

Received on Oct. 9, 2014 - Accepted on May 5, 2015
Financial support: CAPES and the São Paulo Research Foundation - FAPESP (Process No. 2011/06008-8).
Dynamics of implementing Sales and Operations Planning... 663

set of decision-making that realigns the methodological. In section 4, they are presented and
tactical plans of the company's functional areas discussed the results of the case studies, followed
to help the organization achieve goals from the intercase analysis, containing main results
business objectives (Palmatier & Crum, 2010; Lapide, obtained and challenges faced. In section 5, are
2011). The S&OP process generally takes place the main conclusions are presented. Lastly,
over the course of a month (monthly, with a horizon of references and appendices 1 and 2 with protocol
24-month planning), based on the questionnaires used
tactical planning processes, with the purpose of
to balance demand and supply, ensuring 2 Literature Review
that the plans of all organizational functions
be aligned, according to the strategy of 2.1 Overview of the S&OP process
business (Ivert & Jonsson, 2010). One of the main The S&OP process reconciles, adjusts, and communicates
The goals of S&OP are to facilitate master planning. the company's plan, linking operational plans
from production, demand planning and the flow and financials and transforming them into a set
of information between them (Oliva & Watson, 2011). of unique numbers. Such an achievement is possible through the
conducting continuous and regular meetings, which
1.1 Objective and justification they seek to involve all participants in the process
that are allocated in the various functional areas of the
In this article, we seek to explore a broader perspective organization (APICS, 2009; Wallace, 2001). The idea
in-depth of the S&OP process, since research to reconcile the supply and demand plans and
about the topic is scarce in Brazil (Santos, 2006; of new products, both at the detailed level and
Bremer et al., 2008a,b; Pandim et al., 2012; Thomé et al., at the aggregate level, and check its adherence to the plan
2012a,b), mainly studies that contain business (APICS, 2009). The process interlinks the
empirical data to support them (Ivert et al., 2015). sales plans, marketing, development
The objective of this article is to characterize the dynamics Manufacturing, Purchasing and Finance in one set
of the S&OP process, identifying the context, integrated plans (Cox & Blackstone, 2002) and facilitates
the motivation/goals, the challenges, and the main communication, sharing of information
results obtained by companies that have as and the planning between market-oriented areas
demand response strategy Make to Stock Sales and Marketing and areas such as Manufacturing
(MTS) and are established in Brazil. and the Supply Chain (Esper et al., 2010).
Despite the growing number of companies that have been The S&OP process has some characteristics
adopting the S&OP process, some companies do not main ones, among which we can mention: planning process
of a tactical, integrated, and interfunctional nature in
are obtaining the expected benefits. According to
with a survey, conducted out of interest from the company; has the ability to integrate the plans
of the organization in a single plan; its horizon
IBM and Oracle companies, about one third
planning revolves around the medium term,
two S&OP programs in American companies
connecting the strategic level to the operational level;
failure or brings weak results (research conducted and promotes the creation of value that is associated
by the cited "Supply Chain Management Review" to the company's performance (Thomé et al., 2012b).
by Singh, 2010). These results are attributed The process integrates the company both at the vertical level
the absence of success factors that guarantee how much on the horizontal level. The integration that occurs
the successful implementation of S&OP, as in the vertical scope, it occurs between the various levels
support from upper management, interfunctional integration,
of decision, aiming to ensure that the decisions
trainings and understanding of the process, among others taken at a strategic level (long-term perspective
others. It is noted that the implementation of the process deadlines) are to be implemented at an operational level.
S&OP can be characterized as complex In this way, the process acts as a link between the meetings.
(Grimson & Pyke, 2007; Viswanathan, 2011), or of the strategic planning of upper management and the
what makes the understanding of the dynamics relevant managerial decisions made on a daily basis in Production
process. and Operations. Horizontal integration occurs between
decisions made at the same level, involving
1.2 Structure of the article different departments of the company, such as
Marketing, manufacturing, and finance, for example.
This article is structured into 5 sections. In section 2,
The process links distinct functions, ensuring that
a literature review is conducted and a there is a single direction for the company's objectives
overview of the S&OP process, definition of the (Côrrea et al., 2007).
main motivations for its implementation, main Although interest in the subject has gained strength
objectives and main results achieved. In the section In past decades, the literature on the subject
3, the main procedures are presented it is still dispersed (Thomé et al., 2014). In addition,
664 Pedroso, C. B. et al. Gest. Prod., São Carlos, v.22, n. 3, p. 662-677, 2015

although the S&OP seems easy to understand, the changes experienced in the business environment,
organizations have difficulty implementing it and leading to a more aligned supply chain
achieve the expected benefits. It is noted, from this (Sheldon, 2006; Baumann, 2010). The goal is to
way, lack of guidance on the implementation of the current days is to develop synchronization between demand and
process (Tuomikangas & Kaipia, 2014). They are varied supply, seeking balance between volume and mix.
the studies on S&OP in the literature, however still For that, it is necessary to have a process capable of
the approaches to the characterization of are limited manage these flows effectively, ensuring
process as a whole. In general, the authors explore the delivery of products to customers on time and in
different strands such as: themes associated with S&OP agreed conditions (Wallace, 2001). One of the
and their interactions (Olhager et al., 2001; Feng et al., main goals of S&OP is to facilitate planning
2008; Wang & Hsu, 2010); expansion modules that master of production, demand planning and the
supported the S&OP (Burrows, 2007; Ivert & Jonsson, flow of information between them (Oliva & Watson,
2010, 2014; Baumann, 2010; VICS, 2010); explore 2011). The S&OP process aims to develop plans for
theoretical way the evolutionary process of the application of operations and finances that are in consensus
S&OP process (Palmatier & Crum, 2010; Sheldon, unique. This is possible through meetings held
2006; Cecere et al., 2009; Ling & Coldrick, 2009; in a coordinated manner, led by senior management
VICS, 2010); study the scenario of companies regarding what in order to integrate strategic and operational plans
it concerns the evolutionary stage of S&OP (Wing & financials over a long time horizon
Perry, 2001; Lapide, 2005; Grimson & Pyke, 2007; deadline (VICS, 2010). Furthermore, the process is able to
Feng et al., 2008; Viswanathan, 2011; Cecere et al., unite different organizational goals into a plan
2009); study some of the strategic factors of unique (Tudorie & Borangiu, 2011).
successes for the implementation of S&OP (Muzumdar & S&OP processes properly implemented,
Fontanella, 2006; Wallace, 2001, 2004; Wing & Perry, and that contain strategic factors for your
2001; Lapide, 2004; Lapide, 2005; Dougherty & Gray, success, they can take the supply chain to a
2006; Elbaum, 2005; Sharp, 2006; Sheldon, 2006; responsive operational performance (Lapide, 2004).
Corrêa et al., 2007; Grimson & Pyke, 2007; Tearnan, The S&OP works as a planning process
2008; Boyer, 2009; Cecere et al., 2009; VICS, 2010); collaborative, integrating functional areas of the organization
or else, they study some barriers that hinder the and presents, as one of its priorities, to facilitate
implementation of the S&OP process (Gilmore, 2005; production planning, planning of
Bower, 2005; Corrêa et al., 2007; Grimson & Pyke, demand and the transmission of information flow
2007; Moon, 2006; Cecere et al., 2009. present between both. The S&OP makes the transfer
It is verified that this is a field of study of this information easier, promoting not
still little explored in Brazil, being studied just a synchronization of the plans
mainly in the United States, its location of of demand and production, but also offers
origin and in Europe, in general. It stands out more sophisticated planning (Oliva & Watson,
also that the process underwent modifications to 2009). In this way, the S&OP team must be
long of its existence, once the needs interfunctional, due to functional conflicts between the
the companies have changed over time, altering Sales, Marketing, Logistics, Finance and
your objectives. Initially, the process was Operations. Such conflicts occur due to problems
"reactive", with its objectives being structural aspects of the organization, such as systems of
focus on the development of operational plans. contradictory reward and evaluation, complexities
Mais recentemente, o processo de S&OP passou a related to production, products, and orientation of
to be "anticipatory" and the goals of the process have passed
market (Thomé et al., 2012b). The process must
to maintain the balance between demand and supplies. include representatives from the following areas: Sales and
A new modification of the process has emerged, bringing
Marketing, executing management and forecasting
a "collaborative" process in which its objectives of demand; Operations, responsible for procurement
was profit. Currently the process is of supplies, inventory management, operations of
characterizes as "orchestrating" and has a focus supply chain, and master production plan;
the demand, analyzing trade-offs at the end of managing
and Finance, contributing with activities of a nature
the demand and obtaining answers in an optimized way
financial (Grimson & Pyke, 2007).
(Cecere et al., 2009).

2.2 Main motivations 2.3 Main objectives

Sales and Operations Planning (S&OP) The S&OP process aims to balance
is configured as an effective process for the demand and supply in terms of volume and mix.
organizations, providing ways to react quickly O volume se refere aos índices globais de vendas,
to changes. The S&OP process arises with the intention product families in general, production rates,
to assist companies in managing and reducing the aggregate inventories and orders that are present
Dynamics of implementing Sales and Operations Planning... 665

pending or in a situation of delay. In turn, the retention of balance between demand and supply
mix refers to specific products, sequence being capable, even, of involving the entire chain
de produção e pedidos de clientes. Caso o volume productive (Wallace, 2004). In the same sense, the
if it is not effectively controlled there will be problems integration of the supply chain with customers
of smaller scale with respect to the mix, however, if the the suppliers is considered a key aspect of
volume lack a well-elaborated planning, S&OP process (Thomé et al., 2012b, 2014).
the problems with mix will grow (Wallace, 2001). The S&OP process also aims to tie together views of
The main objectives of S&OP have been summarized. future to the situation experienced in the present, causing
no Frame 1. continuous planning in order to address any
sources of imbalance, such as variations in demand
2.4 Main results obtained with and the availability of resources (Côrrea et al., 2007;
Sales and Operations Planning Mellen et al., 2010.
The expected result of the process is synchronization.
The benefits of adopting the S&OP process
between demand, supplies and the financial plan in
are widespread in many organizations. First
a time horizon of 18 to 24 months. The aim is
place, one can improve operational performance,
including deliveries made on time (OTIF - On Time In Full) identify risks and opportunities, as well as develop
Time in Full), inventory reduction, improvements in action plans to cover any gaps in the plan
quality and profit maximization. To the extent annual of the company, just like in the strategic plan of
in which they gain more experience with the realization long term (VICS, 2010). If the S&OP process
two cycles of S&OP, organizations begin to if properly conducted, the company will be able
improve your performance, a fact that leads to improvement of to link the company's strategic plan with its
business performance as a whole, contributing execution, review the performance metrics in order to
for the results offered to the interest groups achieve continuous improvement (Cox & Blackstone, 2002) and
offer an integrated planning process of
of the organization. It is also observed that with the
S&OP the management team becomes more effective inbusiness with the potential to align operational plans
business management (Palmatier & Crum, 2010). and strategic, in accordance with financial objectives
Among the main results derived from from the company (Baumann, 2010). Decisions made in
S&OP, there is the capacity for obtaining and correct timing, aiming for the best combination of

Figure 1. Main objectives of S&OP.

Main objectives of S&OP Authors
Develop and review operational plans and the company's performance for a horizon
Basu (2001)
an average time of two (2) years.
Balancing demand and supplies at the volume level.
Continuously evaluate the company's performance; align the company's goals.
at the operational level; develop reliable and realistic demand plans and
supplies in order to align demand and supplies and promote improvements in the chain,
Wallace (2001)
reducing the company's costs.
Bower (2005)
Support the strategic planning of the organization, linking the strategic plan of
Corrêa et al. (2007)
company at the operational level; ensure that the plans developed are consistent
with reality; ensure that changes are made satisfactorily;
to offer a good level of customer service; to collaborate with performance evaluation;
promote a spirit of teamwork through collaborative work.
Develop and define Production and Sales goals through routine meetings.
Make the final product available to the consumer at the lowest possible cost, as well as
other resources employed.
Promote consensus among different functions of the company, creating a single set Grimson & Pyke (2007)
of plans. Tudorie & Borangiu (2011)
Link different plans of the organization and ensure that supplies are Ivert & Jonsson (2010)
available in order to meet the existing demand. Mellen et al. (2010)
Generate a consensus between operational and financial plans through reviews VICS (2010)
coordinates, led by senior management in order to integrate strategic plans, Thomé et al. (2012b)
operational and financial for a medium-term time horizon.
Create alignment and integration within the company; offer improvements at the operational level;
promote results focused on a single goal; generate concrete results.
Source: Prepared by the authors.
666 Pedroso, C. B. et al. Gest. Prod., São Carlos, v.22, n. 3, p. 662-677, 2015

products, customers and markets are also possible may support. In this way, possible recommendations
through S&OP. Thus, the process contributes developed through the joint work of the areas
for greater profitability, satisfactory performance of functional are presented to the S&OP team
company and greater customer satisfaction (Muzumdar Executive, who is responsible for the approval or
& Fontanella, 2006). modification of these recommendations. The process
The process provides a set of plans for it then results in an authorized action plan for
demand that shapes sales and marketing plans the organization as a whole (Wallace, 2001).
and Development of New Products, resulting in,
still, in a range of supply plans that 3 Methodological Aspects
they outline the activities of purchasing, supplies,
The methodological aspects adopted throughout the
manufacturing and inventory. S&OP is directed the results of the research are presented in the present
by the demand forecast, taking into account section. The focus of the research is to characterize
that the balance between the demand and supply plans the dynamics of the S&OP process in three companies
supplies should be guided by goals and objectives that have as a response strategy the demand
strategic. Performance metrics are employed Make to Stock (MTS). In this way, in the initial phase of
with the purpose of assessing whether the company's goals
a literature review was conducted on
are being reached and provide feedback to the process how the S&OP process occurs. The review of
of strategic planning in order to analyze the literature aimed to serve as a foundation
progress of the process. The process focuses on theoretical for the research, followed by a case study
continuous planning, which is feasible through to seek to include the empirical reality of some
monthly reviews and continuous adjustments of the plans Brazilian companies in the implementation of S&OP.
according to the fluctuations of demand and the market The approach is qualitative, as it examines concepts.
occur and the availability of internal resources and in terms of their meanings and interpretations
of material supply, as well as of services in a specific context of a research, such as
externals (Wallace, 2001). suggested by Ketokivi & Choi (2014).
The S&OP process brings greater integration. The conduct of the literature review was carried out
to the company's plans, involving from the level based on the work of Tranfield et al. (2003),
strategic to operational and modifying the flow Tranfield et al. (2004) and Denyer & Tranfield (2009).
of the organization's work. Traditionally, the The initial step of the systematic literature review
organizations are designed according to a model consisted of access to the databases: Science Direct,
linear, in which the sales planning actions Emerald and EBSCO. These databases were
the planning of operations occurred in a manner chosen, therefore, according to Thomé et al. (2012a), such
sequential, in which silo culture dominated. In this databases have the largest scope of articles
traditional model, there is no consensus among the areas, published, related to the themes: Operations, Management
because the information is only passed on through of Organizations and Social Sciences in general. In order to
the functional areas in order to execute certain characterize the S&OP process, primarily, with
actions, without there being a uniformity of plans a more generic perspective, in order to explore thus
among the functional areas (Wallace, 2001). the dynamics of the process in a stricter scope, the
In the context of S&OP, the coordination between the areas Keywords used in the search were: 'S&OP'
involved is achieved through meetings, in the the 'Sales and Operations Planning', searching for them in
what conflicting plans and pending issues are títulos de artigos, resumo e palavras-chaves. Ostring
assessed in light of materials, tasks, financial resources search used was: 'S&OP' OR 'Sales and
and existing capacity constraints, resulting in Operations Planning. The criterion considered for the
a set of integrated plans (Feng et al., 2010). the inclusion of the articles was the consistency of the article in what
The old Production Planning process, it relates to the constructs of S&OP, including the
which intrinsically had the silo approach, articles that presented a consistent theoretical basis
determined that Sales and Marketing should prepare the to the research objectives. Regarding the criterion
sales forecast and its delivery to planning used for the deletion of articles, they were eliminated
of production. The resulting production plan was, the articles that detailed themes associated with
so, forwarded to the master programmer who was S&OP, however without addressing the process in a way that
encarregado de dividi-lo em produtos individuais. promote the necessary theoretical foundation for the
The S&OP, in turn, is presented as a process. development of the research.
which requires multidisciplinary teams, that is, The search, reading, and synthesis of the articles took a while.
requires that the Sales and Marketing areas, Operations, about 4 months (between April and June 2013), being
Finance and Product Development work together updated in early 2015. Searches for articles
joint mode for the development of a range in the databases Science Direct, Emerald, and EBSCO
integrated plans that all these departments returned 214 articles, of which all the abstracts
Dynamics of implementing Sales and Operations Planning... 667

were read. Within this sample, some articles Multicase studies allow for the obtaining of
did not relate to the topic and were therefore, more consistent results, since they provide
excluded. After this first filter, remained a study with a global perspective, enabling,
118 articles that had their abstracts, introductions thus, being carried out with greater robustness. Studies
and the conclusions read. From this analysis, it remainedmulticaso presents, thus, greater expressiveness,
61 artigos, que foram lidos na íntegra e utilizados na when compared to single case studies. Such fact
literature review of the master's thesis of it is due to the replication of the results of the analysis of the
one of the authors of the research. Of the 61 final articles, characteristics of the constituent elements of the research,
only articles were sought to be used in this paper enabling the detection of convergences and divergences
that responded to the intended objective. Literature among them, thus contributing to the solution of
additional was incorporated into the research, with the aim
research problem (Yin, 2005). In the selection of
to enrich the theoretical conceptual basis of the work.
cases to be studied were adopted as criteria:
Research was also conducted on national Theses and Dissertations.
large-scale manufacturing companies of goods,
in the Digital Library of Theses and Dissertations of
thus, it is possible to obtain greater variety of
USP is at the university library where it was
constructs collected in the field, with companies
work completed. National periodicals in the area
large-scale projects present greater complexity
of Production Administration were also
researched, being sought through the base of (Massey & Dawes, 2001; Paiva, 2010); organizations
Scopus data, in order to find published articles based in the State of São Paulo, for reasons of
in the newspapers 'Management & Production' and 'Production', already ease of access; organizations with the strategy
that these newspapers present greater proximity from demand-oriented Make to Stock (MTS), as
with the area of Production Management and highlight the processes of these companies are based
in the national scenario, returning in an article that was mainly in demand forecasting, there being
used in the research. In addition, consultations were made greater degree of uncertainty regarding the demand for the period
the minutes of the main events in the Operations area (Pires, 1995).Greater relevance of Make systems
at the national level: Simpoi, Enegep, and Simpep, in the Stock(MTS) can be explained by the fact that
what articles published in the last were sought after companies with Make to Order (MTO) strategy, which
five years. The search returned in five articles that they produce on demand, they work with orders
were not used, as the information brought companies in the portfolio, therefore their management is carried out
from the articles found in national congresses in an easier way. Regarding the companies that
they were already present in other analyzed articles they follow the Make to Stock (MTS) strategy, all the
previously. management is based on sales forecasting, being
The data collection for the empirical study was subject to all the disadvantages and risks associated
conducted through a multi-case study, as it the forecasts (Pires & Musetti, 2000). In this way,
allows for substantiated investigations to be carried out companies with MTS strategy were selected,
in reality, investigating a certain phenomenon since demand forecasting is one of the main
and the specific context in which it is inserted. This type input resources of S&OP.
research is viable mainly when interactions Data collection was conducted between September
about the studied phenomenon and its context are not from 2013 to February 2014, having a duration of,
clear (Yin, 2005). In the area of operations management, at least 1 hour to 1 hour and a half. In total, there were
this method has been pointed out as relevant 13 employees from the three organizations were interviewed.
(Barratt et al., 2011; Ketokivi & Choi, 2014)
researched. The semi-structured nature of
meanwhile requires researchers to be concerned
questionnaires allowed the interviewee to speak freely
with the transparency of procedures and choices
carried out. In this research, there was the development of more freely about the topic at hand, being able to
a research protocol, whereby the preparation of reveal additional data and enriching the process of
semi-structured questionnaire used in studies of data collection. All interviews were conducted
the case was based on the research objective. The questionnaire in person, with the professionals involved
is characterized as the main collection instrument with the S&OP process, of positions belonging to
of the research data. In addition, the questionnaire was various functional areas of three large companies
submitted to a pre-test, which was reviewed by door. After the interviews are conducted,
five professors in the field of Production Engineering were transcribed and coded into categories for
(experienced in methodology and operations management)that its quantification would be possible. The choice of
from different universities (University of Tennessee, people to be interviewed occurred due to
Federal University of São Carlos, University the interfunctional nature of the S&OP process, which
Federal University of Uberlândia, Unesp/Bauru and University demand for the participation of collaborators from various
Methodist Church of Piracicaba in June 2013. areas (Thomé et al., 2012a,b). Table 2 summarizes
668 Pedroso, C. B. et al. Gest. Prod., São Carlos, v.22, n. 3, p. 662-677, 2015

the main characteristics of the companies involved segregadas e analisadas de forma descritiva, em
in the research and assigns a fictional name to each one. first moment, and, later, in a way
In the data processing, analysis was used interpretive, based on the literature on S&OP.
of content (Bardin, 1977). The interviews were From the generation of categories in the software, it was
all recorded and transcribed. Then, it was carried out possible to identify subcategories.
the construction of a codebook that was used
no software QDA Mine. The categorization contained 4 Presentation and discussion of
nocodebookabrangeu as recording units in results
categories that were identified from the review
In this item, the results will be presented
of literature and its main points, according to the obtained from the researched organizations on a case-by-case basis and,
research scope, first case by case and then Next, the inter-case analysis will be presented.
an inter-case analysis. The analysis of the results was
possible through the interpretation of information
obtained in the field, with the help of the QDA software
4.1 EQUIPMENT
Miner and Microsoft Excel. The software in question The process had as its main motivator the
was mainly used for the analysis of the cases the need to align the information, since, before
individuals, with the analysis of intercases being prioritized its implementation, they were disconnected. In addition,
oMicrosoft Excel. The categories analyzed were the company understood that the S&OP process was

Table 2. Characteristics of the surveyed companies.

Case General characteristics Amount of Year of adoption Interviewed
employees do S&OP
American company, with
subsidiaries in various countries.
Supply Director
It is a leader in the machinery sector.
Chain(DSC X)
construction and mining. It has Implanted in
Strategy Manager
direct competitors, including in 1997, changed
(GE X), Manager of
EQUIPMENTBrazil. It is in a market. 4,500 in 2007. Told
Product (GP X) and
of high volatility, and needs to be with the assistance of
Systems Manager
quickly adapt to changes, consulting.
Quality and Operations
but large events in the sector of
(GSQO X).
civil construction can influence the
your demand.
Brazilian company with plants in
Brazil and Thailand. It stands out in the sector.
Operations Manager
of agricultural machinery and exports to
more than 60 countries. Some of the supplies
(GO Y), Manager
Started in 2010, of Planning and
used by the company, such as
by the managers Production Control
MAGRICO the casting and machining of parts, 3,000
from the company without (GPCP Y), Manager
are verticalized, with such
external help. of Sales (GV Y) and
raw materials are manufactured
Sales Assistant
in the organization itself. Market
(AVY).
seasonal, influenced by harvests, climate
and politics.
European company, with plants
productive in diverse countries and S&OP Manager
Implanted in
exports to more than 70 countries. Has (GSOP Z), Specialist
February of
stand out in your field of activity, from S&OP (ESOP Z)
2012, being that
being a world leader in the segment. S&OP Coordinator
the Management of
Main products offered by (CSOP Z), Supervisor
MATESCO 2,500 S&OP was created
empresa: lápis de madeira, canetas, of Planning
in June. There was
markers, mechanical pencils and graphite, Production (SPP Z)
an attempt
among others. The organization is and the Manager of
of deployment
finds in a bull market Planning of
earlier in 2008.
seasonality (caused by the period Sales(GPVZ).
curriculum of Brazilian schools.
Source: Prepared by the authors.
Dynamics of Sales and Operations Planning implementation... 669

would help it evolve as a whole, assisting it in studying talks about one of the interviewees below. The main ones
the difficulties and characteristics of the local market, challenges were: to make everyone evaluate the
helping her develop possible solutions for impacts that were being generated in the other areas
the problems faced. The alignment with the and the recognition of functional interdependence.
the company's strategic goals need, according to It was mentioned, as a challenge, also, the search for
interviewees, to be conducted effectively, since the reconciliation of demand and supply, both in terms of
the company presents a complexity in management internal to the company, as well as in the supply chain.
of your management, as the management
of the information flow provided by S&OP We switched from supply driven to demand driven.
able to assist the organization in achieving such objectives. that were basically inventory. In order for us to
The company's objectives regarding S&OP were: manage our inventory, we just can’t produce and then
improve communication between functional areas and plan to sell it. We needed to estimate what we were
optimize capacity planning. going to sell then produce that, and we are much
Through the interviews conducted, it was found that more accurate doing it that way than the previous
that, before the implementation of the S&OP process, way.(DSC X - interview granted in English).
the Marketing and Sales department received the
reports and product requests resulting from demand
external. This information fed the systems 4.2 LEAN
of the organization and, thus, the impact generated was evaluated The process in the organization began to be studied in
for the demand. In this way, the information was in 2007 and a process was established approximately
immediately passed to the supply chain in the mold of S&OP. Thus, a
which, in turn, trigger their respective actions in multifunctional team, with participants from various
response to the information provided by the company, fact functional areas such as Information Technology,
that impacted the stipulated demands. Before the Marketing, Sales, Industrial Board and Board of
S&OP, the communication was very fragmented, being Marketing. From this point on, all participants
that there was little exchange of information between the areas they were instructed to understand the process, in order that
functional. From the implementation of S&OP, the it were to be implemented. For that, some books about the
procedure for receiving and feeding the systems with subjects were studied and the process was established
the generated demands are only processed from the 11th day onwards
S&OP. A motivation for the implementation of S&OP
useful. Now, the company can process the demand andhe helped in the development of capacity
put it in the MRP and only then this information is
aligning the strategies, making it easier
passed to your supply chain. As for the
the construction of tactical plans based on strategies
installed capacity, prior to implementation
in the macro view. Another motivation was the possibility
in the S&OP process, there was no visibility with
of gains to be obtained in the planning area,
in advance, missing opportunities due to lack of
then it was clear that S&OP would help make it more
of planning. Capacity management was very
efficient processes as well as integrating the company.
more fragmented, with a planning of
Another motivation for the implementation of S&OP was
machine capacity per se and not a
broader planning. the possibility of offering a more detailed plan
detailed for the company, in addition to the need for
The main results obtained by Maquip
after 17 years of implementation, there was: the improvement of better utilization of assets. The main objectives
communication between functional areas and optimization for the implementation of the S&OP process were
of capacity planning. It is observed that after the improvement of capacity planning, greater
the implementation at Maquip conducts a planning alignment between demand and supply and optimization
with a five-year horizon. This planning takes of the company's planning. Before implementation
considering a certain mix of products in S&OP, Capacity Management was carried out from
what the organization aims to have in the future, planning in simple form, effective control was not performed.
in advance, with the introduction of new capacity seeking the visualization of volumes.
products in a more controlled manner. It is carried out in The material needs were calculated by
next, the reorganization of the layout to prepare the middle of MRP and Demand Management and Management
for a future demand, being communicated with The capabilities were not effective, simply
18 to 24 months in advance for the entire chain of os dados da demanda eram colocados no sistema,
supply, in order to promote greater predictability regardless of the ability to produce
of investment for the chain. Thus, from the Oh no. In other words, there was no alignment between Sales.
implementation of S&OP, the management processes and Production, nor collaboration of the stakeholders
from Demand and Capacity Management started and consensus among the areas. There not being a number
working in a more structured way, as unique, at some moments, the company suffered at times
670 Pedroso, C. B. et al. Gest. Prod., São Carlos, v.22, n. 3, p. 662-677, 2015

with a lack of deliveries, now with elevated stocks, motivating factors for the implementation of S&OP, besides
impacting the chain as a whole. of the need to create a single process to
The planning processes existing before the end of having a single consistent objective to all the
the implementation of S&OP were executed without areas of the company, seeking to ensure impartiality
defined periodicity. After implementation, every in decision making.
the S&OP process is run monthly, being based on The main objectives were to obtain greater
in the company's strategic goals. They are arranged in the periodicity in planning, develop plans
current days, of information on the demand of all the more assertive, optimize the planning of the units
month, with only small variations occurring business and promote greater balance between demand
usually within the strategic process, since and supplies. Before the implementation of S&OP, the
it is renewed monthly. It is also known as demand and capacity management were done with
demand for the next 12 months, and, in this way, less frequent, with the reviews being
the process occurs naturally, with small conducted every 3 to 4 months, generating plans that
adjustments only and without change of calendar. they did not conform to reality. Furthermore,
Among the main results is the alignment the Marketing and Sales planning was done
between the strategic and operational goals and greater in a unique and non-sequential way, with little
assertiveness in demand forecasting. The challenges participation of the Sales area, in which the planning
faced by the company include the construction of was directed exclusively for the fulfillment
consensus among the functional areas in order to achieve of goals. For some products originated in the same
the capacity planning in an optimized way factory, it was also necessary to carry out the review
and promote visibility of information to everyone do the planning twice, one for the market
involved in balancing demand and supply internal and another for the external market, with no
internally within the company. synchronization between the business units. Currently
there is standardization, all factories follow one
Even before the implementation of S&OP, there was already
unique calendar. Already for capacity management,
a structured planning process,
however, its implementation brought greater when the PCP finished its restriction analyses
robustness, both for Demand Management, of capacity, I only sent a spreadsheet by
how much for Capacity Management (GV Y). I am emailing the Sales department, informing them about the
The capacity planning was very superficial, restrictions, there being no joint discussion whatsoever.
we did not have pre-agreements, nor the limits In this way, the identified restrictions do not affect anything
clear about what the freezing horizons were they interfered with the sales plan, as there was not a
for each family. One of the main things that
S&OP elevated the alignment between areas.
guidance on which products should be sold.
(GPCP Y). After the implementation, in the consensus meeting,
there is a list of all the products that need to be
sold and other products that are out of stock in
inventory, and all of this is passed on to the staff of
4.3 MATESCO
[Link]
In this company, in the year 2008, there was an attempt of a history that was put in a spreadsheet
of the S&OP implementation process carried out by in Excel, the Marketing Managers define for the
organization collaborators. However, the project does not large product families what would the volumes be
was carried on at the time, resurfacing in 2012, to be sold and this plan became a goal for
with the collaboration of an external consultancy the sellers. AMatesco implemented a tool
that helped her to design the processes and define the statistics to improve sales forecasting and the
necessary performance indicators. The main one vendors also participate in the production of
responsible for the implementation of the process was the numbers and the monthly review, thus having,
S&OP Manager, however all areas involved in a commercial vision.
They actively participated in its implementation. As a result, today it is observed that there is greater
The main reasons that encouraged the implementation communication between the Marketing and Sales areas
the S&OP were the need to understand and elevate as information flows satisfactorily
the level of customer service, inventory reduction, among the departments, making the data
improvement of working capital and the need for available in the field return to the company.
reduce the difficulty of making the forecast of the Prior to the implementation of S&OPhavia a
demand. In addition to these factors, there was difficulty due to defined process of how to transform the demand
part of the Purchasing and Production area in reacting in production planning, however, the difference is that,
to demand, as there was a lot of fluctuation in the market. currently, with S&OP, the capacity constraints
The meeting of market needs and the found return to the Commercial area, consolidates
optimization of the company's resources was also a new plan is being announced. In the Management process
Dynamics of implementing Sales and Operations Planning... 671

of Capacity, according to the interviewees, by doing S&OP, the organization was able to achieve improvements
there were few changes regarding the way to in communication between functional areas and optimize
work with demand forecasting, as it still does capacity planning. The company Magrico
is learning to work with the new software was seeking to improve capacity planning,
that was implemented. The main role of this software as well as the company's planning and greater
to make the process faster, promoting balance between demand and supply. The results
more agile responses, more conclusive analyses and achieved were: the attainment of assertiveness in
helping the organization to see more details. demand forecasting and greater adjustment between the
Another point where there have been changes is the refund. strategic and operational goals of the organization.
from the analysis of Demand Management, conducted by the area of
Finally, Matesco had the following objectives
Company production, being that this analysis, today harmonize demand and supplies, promote greater
it contains much more information, it is more focused periodicity in the company's planning, to carry out
and has more details of everything that happens in the planning of business units in a way
productive processes. Thus, currently, there is satisfactory and develop more assertive plans.
much more interface between the areas, as mentioned byThe results achieved by the process were greater
some interviewees. The main results were balance between demand and supply and improvement
improvement of communication between the areas and greater in communication between the functional areas.
integration of demand and supply plans. The challenges faced by the company Maquip
The main challenges were the company's commitment. to reconcile demand and supplies and carry out
in order to align demand and supply, carry out the the assessment of the impacts generated in other areas
satisfactory capacity planning and functional. The companies Magrico and Matesco
improve communication and visibility between the [Link] difficulties in carrying out the planning
da capacidade e para promover o equilíbrio entre
Before not all departments participated
actively now as the process everything better or. (CSOPZ) demand and supply. Thus, the main
We have at the time of the analysis return of the challenges noted in the three organizations researched
demand management, more grounded information is theto reconcile demand and supply in a way
that today we move much more to another area internal, to exercise control over capacity and evaluation
the details of everything that is happening inside the of the impacts generated by the functional areas.
factory, then, for example, has much more detail. The implementation of the S&OP process was essential.
Before, the other area did not have as much insight into what
It was happening, today there are many more interfaces.
so that such challenges could be overcome. A last
the faced challenge was the difficulty with oneself
nature of the process, the need for greater effort
by representatives of the Operations area in
4.4 Intercases conduct of the process. This fact may be due to
This item conducts an inter-case analysis. routine situations experienced in companies, that
based on the data from the three researched companies. are characterized by the very nature of the process that
To reconcile demand with supplies. The area of
Operations are generally charged in a different way.
4.4.1 Main results obtained and
about the expected results, when compared to
confronted challenges other areas participating in the process, such as Sales
Currently, with the S&OP process, one can notice... e Marketing, which are charged in a milder manner.
that, in the three organizations surveyed, both the These findings were mainly based on the
demand management processes, as much as management observations made in the field, which were
of Capacity are more aligned, being that essential for data collection. This phenomenon will
both the volume of demand and the restrictions of in line with the findings in the literature. According to
capacities are assessed and considered, confirming Wallace (2001), generally the operations team is
the findings in the literature (Wallace, 2004, 2006; charged to achieve the established production goals,
Lapide, 2005; Vollmann et al., 2006; Corrêa et al. while the sales team is rarely held accountable to
2007; Ling & Coldrick, 2009; Krajewski et al., 2009; adjust sales plans. Furthermore, the responsibility
Chen-Ritzo et al., 2010; Godsell et al., 2010; VICS, from the Operations area in synchronizing demand
2010; Thomé et al., 2012a. and supplies can be exemplified, according to
The results achieved by the organizations are Slack et al. (2001). The authors assert that, for the
consistent with the initial objectives set and companies reconcile, on one side the needs
with the motivators for the implementation of the process of the market (represented by demand) and, on the other
of S&OP. The Maquip organization aimed to side, the capabilities of the operation/supplies, the
improvement of communication between functional areas and of the organization must be able to integrate resources from
capacity planning. After the implementation production so that it can offer its products to
672 Pedroso, C. B. et al. Gest. Prod., São Carlos, v.22, n. 3, p. 662-677, 2015

consumer. In this way, this responsibility falls also research that promotes the understanding of
in the planning and control of production (activity the way in which S&OP contributes to integration
typical of Operations) that have the responsibility of interfunctional and others expand the study of the process
reconcile these two activities. S&OP and its impact on supplier relationships
and clients. Finally, studies that would be welcome
5 Conclusions they explored the implementation process of S&OP
The contribution brought by the research lies in through a survey, analyzing the implementation
the fact that the work details the dynamics of the process of of the process from a quantitative perspective and
S&OP, contrasting with what motivated companies studies that explore the S&OP process in the sector
researched to implement the process, challenges and of services.
results obtained. Another contribution of the research
it partially filled an empirical gap, since Acknowledgments
the topic is little explored in the Brazilian context,
The authors thank CAPES for the financial support.
considering studies that address the subject of (Master's scholarship of the 1st author) and to the Foundation of
empirical form. Furthermore, the maturity of some Research Support Foundation of the State of São Paulo - FAPESP
managerial processes studied are different from the studies
(Process No. 2011/06008-8).
done in countries either in North America or
from Europe or Asia.
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Dynamics of implementing Sales and Operations Planning... 675

APPENDIX 1. Research Protocol

Case Study Protocol

Objective of the research

The aim of this research is to identify the factors for a successful implementation of the sales process.
and Operations Planning (S&OP).

2) Research question
What are the factors that characterize a successful implementation of S&OP?

Selection of the units of analysis

The selection criteria for the companies studied in this research are:
Companies that are at different stages of implementing the S&OP process, so that,
if it were possible to develop an understanding of the success factors for effective implementation
successful S&OP, by detecting common elements among the cases;
• Large-scale manufacturing companies can thus achieve greater variety of
constructs collected in the field, with large companies presenting greater complexity
(Massey & Dawes, 2001; Paiva, 2010);
Companies located in the State of São Paulo, for ease of access;
• Companies with the Make to Stock (MTS) demand-oriented strategy, as such organizations
They manufacture standardized products, primarily based on demand forecasting and present
greater degree of uncertainty regarding the demand of the period (Pires, 1995). Thus, companies with strategy
MTS were selected because the demand forecast is characterized as one of the main
input resources of S&OP.

Data collection
a) Companies eligible for research:
Company A
Company B
Company C
b) Data sources
Interviews:
Initial contact with the company via email/phone call;
✓Selection of people from different functional areas who have been involved with S&OP for at least
2 cycles of the process;
✓Investigation of the phenomenon in a deeper way with the process coordinator.
Field observation:
c) Identify all interviewees;
d) Schedule the interviews;
e) Collect the data and analyze it.
Data collection:
✓Present the research objectives;
✓Give the interviewee a copy of the questionnaire that will be applied (Appendix 2);
✓Record the interviews (on average 1 hour per interview);
✓Take notes during the interview.
5) Analysis of the data
a) Coding based on codes derived from the literature;
b) Analysis of the codes;
c) Inter-case analysis;
d) Link the theory found in the literature review with the results of the case studies.
676 Pedroso, C. B. et al. Gest. Prod., São Carlos, v.22, n. 3, p. 662-677, 2015

APPENDIX 2. Questionnaire

Questionnaire applied in data collection

Company:___________________________________________________________________________
Note: The name of the company will be omitted from the work. Thank you for your cooperation in advance!
The questions presented form the basis for discussion. However, these questions are not limited to the scope.
from the discussion, if other important information is identified. With your permission, I would like to
record the interview in order to help validate the information. The recording will be confidential and only the team
the research will have access to it.
Case Study - Characterization of the Factors for the Implementation of the Sales and Operations Process
Planning (S&OP)
DADOS GERAIS:
Interviewee's name: ________________________________________________________________
Current position in the company / time in position: _________________________________________________
Previous position in the company/ time in position: _______________________________________________
QUESTIONS ABOUT S&OP
1 - History of the S&OP process in the company:
a) Please describe the S&OP process in the company.
b) How long has the S&OP process been used this way?
c) What were the primary motivations for implementing the process in the company?
d) Explain how S&OP is aligned with the company's strategic goals?
e) Describe the implementation process of S&OP. Who were the participants, both internal and external?
externally?
New skills/training/knowledge/technology were needed during the implementation phase.
the S&OP and to manage it currently?
2 - What are the areas involved in the process? What is the hierarchical level of those involved? Who leads?
the S&OP process?
a) What is the role of upper management in S&OP?
b) Describe the role of Logistics in S&OP. How could this area contribute more effectively to
the process?
3 - Impact Processes
a) How was the Demand Management process done in the company before the implementation of S&OP?
b) How was the Capacity Management process carried out in the company before the implementation of S&OP?
4 - Could you please discuss your role in the S&OP process, as well as the role of your
functional area?
5 - How does S&OP work in the company? Please describe the steps of the process.
6 - What were the benefits obtained through S&OP?
a) What were the main barriers faced in the implementation of S&OP?
b) Discuss the degree of difficulty in implementing S&OP in the company.
c) How do you consider the cost of implementing S&OP (high, medium, low)? The company estimated
the costs of implementation?
d) How were these difficulties overcome?
7 - Does the process involve the use of software or information technology tools? Describe.
and talk about their role/importance.
8 - Are there performance evaluation metrics developed by the process? Describe.
9 - Do these metrics evaluate areas individually or results produced together?
10 - What are the company's current objectives regarding S&OP?
11 - What are the expectations for the future regarding S&OP?
12 - How does S&OP contribute to the integration of the functional areas of the company?
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13 - What factors do you consider critical for the successful implementation of S&OP?
14 - Was there greater cross-functional integration between the areas after the implementation of S&OP?

a) How do you describe the S&OP process in terms of maturity? Are there opportunities for improvements?
or do you consider it relatively static?
15 - Any other comments you would like to make about the S&OP process in the company?