Sales and Operations Planning. Scientific and Consultancy Maturity Models Indicating the Degree of Implementation

Seminar Paper, 2016

34 Pages, Grade: 1,7






1 Introduction

2 Methodology

3 Maturity models for sales and operations planning
3.1 S&OP as alignment mechanism
3.2 S&OP as a process
3.3 Maturity in S&OP

4 Maturity model synthesis and presentation
4.1 Consultancy maturity models
4.2 Scientific maturity models
4.3 Excluded maturity models

5 Comparison of scientific and consultancy maturity models
5.1 General
5.2 Dimensional analysis

6 Discussion

7 Conclusion and Outlook

8 References

9 Appendix
A Taxonomy of literature review
B S&OP coordination framework
C Gartner research stream maturity model
D Aberdeen Group research stream maturity model
E Sub-dimensions of Wagner’s, Ullrich’s and Transchel’s maturity model
F Maturity model comparison with dimension match


Fig. 1 Generic S&OP process (author’s creation, according to Wallace 2004)

Fig. 2 Taxonomy of literature reviews (author’s creation, according to Cooper 1988)

Fig. 3 Framework of S&OP coordination mechanisms (author’s creations, according to Tuomikangas, Kaipia 2014, p. 254)


Tab. 1 Maturity model overview resulting from the SLR

Tab. 2 Exemplary multi-dimensional maturity model (author’s creation)

Tab. 3 Dimensional analysis of the considered maturity models

Tab. 4 Gartner S&OP maturity model (Barrett, Uskert 2010)

Tab. 5 Aberdeen Group S&OP maturity model (Elbaum 2004)

Tab. 6 Description of sub-dimensions of Wagner’s, Ullrich’s and Transchel’s (2014) S&OP

Tab. 7 Maturity model comparison with dimension matching


Abbildung in dieser Leseprobe nicht enthalten

1 Introduction

Economic developments such as growing globalization, market uncertainty, increasing customer demands, shorter product life-cycles and rising supply chain interconnectedness as well as product complexity require companies to be even more responsive to market conditions in order to improve their competitiveness. Higher competitiveness as a whole company can only be achieved by an increased cross-functional alignment and collaboration within the company and with external suppliers and customers. Evolving from aggregated production planning and manufacturing resource planning, sales and operations planning (S&OP) is a business process supported by information technology (IT) that aims at aligning sales and production both intra-organizational and inter-organizational across the supply chain. S&OP is only seldom introduced at once in a big bang approach. Thus, companies should strive to continuously improve their intra- and inter-organizational alignment and S&OP process. A maturity model (S&OP) can help to assess the current state of the S&OP implementation and can direct the continuous improvement along predefined coordination mechanisms and dimensions (Wagner, Ullrich, Transchel 2014). Further benefits of applying S&OPs in the context of S&OP should be identified during this thesis. Furthermore, a general characterization of S&OPs should be presented and adopted to S&OP maturity assessment. As S&OPs are published by researchers and practitioners (mainly consultancies and analysts), this thesis further aims at determining from which publishing stream a S&OP should be taken in order to assess the S&OP maturity of a company and to direct further improvements in maturity. This may also result in a proposition for a concrete S&OP to use. The comparison of scientific and consultancy S&OPs in this thesis builds upon the S&OPs already summarized by Grimson and Pyke (2007) as well as Thomé et al. (2012) and updates their S&OP summaries by adding S&OPs from more recent papers.

Following the general introduction, the methodology applied for the systematic literature review (SLR) is introduced and the results of the current SLR on the topic of S&OP maturity are briefly presented. Then, the coordination mechanism that should ideally be applied within S&OP are introduced followed by a description of the general S&OP process. Afterwards, general characteristics of a S&OP are presented and shown in the field of S&OP. After that, the consultancy S&OPs that are identified during the SLR are synthesized into two S&OP research streams and three scientific S&OPs are presented. The comparison of scientific and consultancy S&OPs is subdivided into a general comparison presenting aspects regarding the level of detail and publication, the dimensional analysis covering the distinct assessment dimensions of the S&OPs and a short comparison of the final maturity stage. Afterwards the findings of this thesis are briefly discussed. The thesis ends with a final conclusion of the findings and open issues as well as an outlook to future research directions.

2 Methodology

To identify and evaluate appropriate literature for this thesis the SLR approach presented by Vom Brocke et al. (2009) is applied not explicitly on information systems literature but on supply chain and S&OP literature. A conceptualization of the topic in order to define the scope of the review and to identify the keywords for the literature search is conducted. This SLR aims at identifying available S&OPs that are developed and can be used in the context of S&OP in order to assess the benefits that S&OPs can provide in the context of S&OP and to highlight potential differences and commonalities. Concerning the searched journals, no restrictions were made during the SLR. To identify appropriate literature four online databases were selected. ScienceDirect and EBSCOhost reference to papers from the majority of renowned peer-reviewed, scientific journals including supply chain, production and organization related articles. Disco[1] further allowed to search the inventory of the Universitäts- und Landesbibliothek Münster and content of the University of Münster simultaneously to the journal papers. In addition, Google Scholar was chosen to include grey literature or more specifically non-peer-reviewed papers that are not published in scientific journals such as whitepapers for practitioners and consultancy reports and studies. As keywords the terms “Sales and Operations Planning” or its abbreviation “S&OP” were used in combination with the terms “Maturity”, “Maturity Model” and “Integration Framework”. Non-English and not accessible papers were directly excluded from the review. Applying the search terms to the selected online databases results in 94 potentially relevant papers. With additional backward and forward search, the conducted literature evaluation in title, abstract and full text revealed 22 S&OP maturity related papers. Twelve of them present entirely new or at least adapted S&OPs to assess the S&OP process implemented in a given organization. These S&OPs cover a period from 2001 up to 2014. Five of these S&OPs stem from scientific papers whereas the other seven are presented in whitepapers and consultancy research papers (Tab. 1). The S&OPs are synthesized into five streams by combining similar ones as well as excluding S&OPs that do not provide a detailed maturity assessment for reasons of comparison. This SLR focuses on S&OPs as research outcomes and their application according to Cooper‘s (1988) taxonomy of literature reviews. Moreover, this SLR aims at integrating the current body of S&OPs in the context of S&OP into a S&OP comparison. Except for the discussion at the end, this SLR follows a neutral representation perspective addressing scholars in the field of S&OP as well as practitioners interested in assessing the maturity of their S&OP process. The coverage of this SLR is exhaustive regarding the key words mentioned above but only a selection of them is presented in this thesis (Appendix A).

Abbildung in dieser Leseprobe nicht enthalten

Tab. 1 Maturity model overview resulting from the SLR

3 Maturity models for sales and operations planning

3.1 S&OP as alignment mechanism

S&OP reconciles the various departmental plans of a company into one set of company-wide, integrated plans in order to balance supply and demand as well as to tactically bridge the gap that exists between the business plan and the operational level. Therefore, S&OP is a tool of horizontal and vertical alignment (Blackstone, Cox 2005, p. 103; Olhager, Rudberg, Wikner 2001; Thomé et al. 2012). Horizontal alignment aims at breaking down functional silos and enabling intra-functional communication and collaboration. Vertical alignment ensures the compatibility and harmonization of plans and objectives throughout the strategical, tactical and operational level of a company (Kathuria, Joshi, Porth 2007). S&OP achieves a bidirectional vertical alignment using feedback loops in order to align the strategical level with the requirements and restrictions from the operations (Wagner, Ullrich, Transchel 2014). Moreover, S&OP aims at maximizing profit and positively impacting the performance of a company (Grimson, Pyke 2007). To enable the continuous improvement of the whole S&OP tool and process key performance indicators (KPI) are established and continuously monitored so that process adjustments can be implemented (Blackstone, Cox 2005). The horizontal and vertical alignment within S&OP is achieved by using a number of coordination mechanisms (Martinez, Jarillo 1989). Tuomikangas and Kaipia (2014) identified six coordination mechanisms that depend on each other during their SLR and synthesized them into a coordination framework (Appendix B). Performance management forms the foundation for the other S&OP mechanisms providing them with necessary data and introduces KPIs as well as related activities to measure the performance of the company. S&OP tools and data deliver adequate master data (MD) to support the decision making and provide tools to enable the S&OP process such as advanced planning systems (APS). This process formally describes the iterative creation of the integrated set of plans with activities, decision procedures and collaboration between functions. S&OP culture and leadership enables a corporate-wide culture supporting the successful implementation of S&OP. Thus, it supports the S&OP organization that identifies all relevant actors and functions concerned with S&OP in the company and strives for a dedicated S&OP function. Further, it includes the S&OP governance describing decision structures and authorities and the central or decentral configuration. Strategic alignment builds the roof of the framework emphasizing the vertical alignment approach. It establishes a vertical link between the strategic targets and operational planning by setting the S&OP meeting agenda. The horizontal alignment is highlighted by situating the inter-functional coordination at the centre of the framework. Additionally, the interdependencies between the mechanisms need to be coordinated centrally (Tuomikangas, Kaipia 2014).

3.2 S&OP as a process

S&OP iteratively creates a weekly or monthly set of integrated plans for a planning horizon varying between six and 18 month depending on the individual company as well as the industry and market it is competing in (Lapide 2014b). An annual planning horizon can be established in order to match the S&OP plan with the financial planning of a company’s fiscal year (Grimson, Pyke 2007). The output of the S&OP process is a “game plan” (Wagner, Ulrich, Transchel 2014, p. 191) that tactically directs the actions of each business function. The generic S&OP process as illustrated in figure 1 typically consists of five single steps (Gregory 1999; Wallace 2004; Grimson, Pyke 2007). Firstly, data is prepared, consolidated and disseminated in the data gathering step to be used in the following steps. Secondly, employees from the sales and marketing function analyze the data and create a first unconstrained forecast for the next twelve months. This forecast is then adjusted using potential promotion information, new product introductions and other demand related factors. Thirdly, employees from the operations function develop a rough-cut capacity plan taking into account planned production performance, stocks and backlogs, lead times etc. Fourthly, the preliminary demand and supply plans are compared and discussed in the fourth step by a cross-function team from the sales and operations side. This team collaboratively generates a consensus demand and supply plan with recommendations for the executive meeting. During the executive meeting the decisions and recommendations from the pre-meeting are reviewed and approved on an executive level together with the S&OP process owner. Additionally, the effectiveness of the S&OP decisions and processes is measured within the last step (Lapide 2004b; Wallace 2004; Grimson, Pyke 2007; Wagner, Ulrich, Transchel 2014).

Abbildung in dieser Leseprobe nicht enthalten

Fig. 1 Generic S&OP process (author’s creation, according to Wallace 2004)

However, Cecere, Barret and Mooraj (2009) propose to implement a more granular approach for a demand-driven S&OP process consisting of nine steps. They especially highlight the integration of what-if analyses into the S&OP process as well as the publishing and communication phase. Furthermore, it is important to remark here that the steps of the S&OP process are adapted by different industries and need to be evolved coincidently with the company’s S&OP maturity stage (Cecere, Barret, Mooraj 2009).

3.3 Maturity in S&OP

Since its development in the 1970s the concept of S&OPs became increasingly popular as a means of continuous improvement as well as external assessment and spreads into many domains. One famous example is the capability S&OP in the context of software development processes (Mettler 2011). Maturity describes „the quality or state of being mature” or “full development” (Merriam-Webster 2016). This state is characterized by completeness, perfection and readiness. Thus, maturity describes an evolutionary development of a specific capability from an initial stage to a desired or natural final stage. Consequently, S&OPs “describe and determine the state of perfection or completeness (maturity) of certain capabilities” (Wendler 2012, p. 1319). These capabilities are often “organizations or processes” (Becker, Knackstedt, Pöppelbuß 2009, p. 213). The structure of a S&OP consists of the two components stages and measurement criteria. The collection of stages describes a sequential development in the maturity of the object under investigation. Each stage represents a certain point in the maturity development in an abstract, simplified manner. The completeness of each maturity stage is measured by measurement criteria. These criteria have different characteristic values according to a specific stage (Wendler 2012). The measurement criteria are called dimensions throughout this thesis. S&OPs that refer to only one criterion are referred to as “one-dimensional” whereas S&OPs with more than one analysis criterion are called “multi-dimensional” (Lyytlnen 1991, p. 89; Tab. 2).

Abbildung in dieser Leseprobe nicht enthalten

Tab. 2 Exemplary multi-dimensional maturity model (author’s creation)

S&OPs can take a life cycle or a potential performance perspective. From the former point of view, the maturity is seen as a natural evolution path from the initial stage to the final one in which all stages have to be passed and the development ends in a fixed, final stage of maturity. The latter describes the desired improvements to be made in order to achieve the next stage. In contrast to the life cycle approach with natural development through all the stages, a user or group of users is able to decide if the improvements of a higher stage presented in the S&OP are worthwhile to achieve taking into account the given effort to achieve this stage and the actual requirements of the given situation. This maturity development may end in the highest maturity stage but does not necessarily have to if the users decide that a less mature stage is already sufficient. Recent S&OPs follow the potential performance approach (Wendler 2012). The purpose of S&OP is to objectively assess the current state of a process in order to identify potential gaps towards the performance of the next maturity stage (Lapide 2005). Creating awareness for the process and related capabilities, S&OPs help to analyze their requirements and complexity. Moreover, they can be used as an implementation framework that directs systematic improvements to ensure a consistent maturity throughout all related capabilities for the introduction of a new process or development of an existing one (Wendler 2012). In addition, externally developed S&OPs can be used to reduce conflicts of different internal interest groups (Fraser, Vaishanvi 1997). Besides these benefits most of the S&OPs do not give any details for how the identified gaps should be filled. Furthermore, the application of a S&OP does not guarantee success in achieving more mature stages for an organization as S&OPs are rarely tested and often not generalizable. Thus, they can lead to ambiguous results in maturity assessment (Mettler 2011). S&OPs were introduced to the domain of S&OP to describe the perfection and completeness of the S&OP process (Ch. 3.2). Often the coordination mechanisms (Ch. 3.1) are used as dimensions to assess the horizontal and vertical alignment achieved by implementing S&OP. A more mature S&OP process allows an organization to exploit more benefits of S&OP. This results in more accurate forecasts, less articles on stock, better employee and machinery utilization, better overall alignment and leads to higher organizational profit and net margin. While Wing and Perry (2001) described the S&OP maturity using the supporting IT as the only dimension in a one-dimensional approach, Lapide (2005) introduced a first concrete multi-dimensional S&OP to assess the S&OP process of an organization. Most of the S&OP S&OPs follow the potential performance approach. Many organizations are far away from reaching the final maturity stage with their S&OP process (Lapide 2005). In 2010 a Gartner study revealed that two-thirds of the 182 investigated organizations are still in the initial or second maturity stage of four stages in total (Barett, Uskert 2010). In order to develop the maturity of their S&OP process towards higher stages organizations should apply S&OPs. Firstly, S&OPs are used to assess the current state of the S&OP process in place considering people, processes and enabling technologies. Secondly, the current state of the process is compared to an ideal S&OP process (Ch. 3.2) and the next higher stage of the applied S&OP. The comparison reveals a number of gaps that need to be bridged in order to achieve a higher maturity level and thus better S&OP performance. Lastly, a roadmap consisting of the actions that need to be undertaken in order to bridge the identified gaps and a certain schedule indicating the sequence of actions as well as the underlying technology (Lapide 2005; Thomé et al. 2012).

4 Maturity model synthesis and presentation

4.1 Consultancy maturity models

The S&OPs that were identified during the SLR are synthesised into five research streams in order to enable the comparison of the S&OPs. Especially the S&OPs taken from consultancy reports and whitepapers are summarized into two distinct research streams. The scientific S&OPs are presented in chapter 4.2 while the S&OP that are excluded from the further comparison in chapter five are shortly presented in chapter 4.3 together with an evidence for their exclusion.

The first consultancy research stream is published by Gartner[2] as well as AMR Research[3] and consists of three individual papers that build on one another. The first paper that is written by Cecere, Barrett and Mooraj (2009) is based on five years of research including interviews with more than 80 companies and S&OP consultancy assignments. However, the data that is derived from the company interviews is not provided for further validation. The paper describes the development of S&OP towards a totally demand-driven process that ensures the balance between demand and supply. The presented four-dimensional S&OP describes the S&OP maturity with the four stages “Reacting”, “Anticipating”, “Collaborating” and “Orchestrating” (p. 2). Complete alignment between sales and operations is only achieved in the final maturity stage orchestrating. The four related dimensions are called “Balance S&OP”, “Goal”, “Ownership” and “Metrics” (ibid.). Balance S&OP illustrates the focus of the planning process between sales and operations with scales. The second dimension goals underlines the aim of the S&OP process. The responsibilities and tasks within the S&OP process that are only divided among sales and operations function in this S&OP, are defined in the third dimension. The last dimension metrics lists KPIs that are introduced and reviewed at each stage of maturity (Cecere, Barrett and Mooraj 2009). Besides the S&OP, the authors also introduce a nine-step S&OP process. After the first paper was published by AMR Research, it was acquired by Gartner in 2009 (Gartner 2009). Consequently, this consultancy research stream is labelled Gartner in the following. In 2010 Barrett and Uskert published a four-dimensional S&OP using the same stages of maturity as the aforementioned S&OP. Furthermore, the first two dimensions are reused and only the last two are replaced by “Cross-Functional Alignment” and “Process and Technology” (p. 2). Similar to the ownership in the previous S&OP, cross-functional alignment illustrates the responsibilities and tasks within the S&OP process but includes further functions such as finance and emphasizes the need for executive participation. The last dimension describes the formalization and trigger for the S&OP process and IT used within the process. The authors applied this S&OP to over 180 manufacturing and retail companies and discovered that two-thirds are in the lower two maturity stages. Conducting interviews with 18 organizations from the third and fourth stage, the authors strived to reveal measures to develop the S&OP implementation towards these stages (Barrett, Uskert 2010). The most recent paper of this stream presents a four-dimensional S&OP with five stages (Tohamy et al. 2013). The dimensions are identical to the ones presented by Barrett and Uskert (2010). Moreover, the additional stage “Integrate” (Tohamy et al. 2013, p. 2) is added between anticipating and collaborating as the authors discovered that the majority of companies under investigation are ranked two in the S&OP maturity. However, a more detailed analysis of the companies at the same maturity stage revealed that these companies have different sets of coordination mechanisms and formalized S&OP processes in place. Therefore, the authors integrated the additional maturity stage in order to achieve a more granular distinction (Tohamy et al. 2013). This research stream is represented by the S&OP presented by Barrett and Uskert because only a short summary of the most recent S&OP by Gartner is freely available on the internet and the additional stage has no influence on the dimensional analysis in chapter 5.2 (Appendix C).

The second consultancy research stream is published by the Aberdeen Group[4] and also comprises three interrelated research papers. In the first paper of this stream Elbaum (2004) presents a six-dimensional S&OP with the three stages “Laggards”, “Industry Average” and “Best in Class” (p. 18). The paper is based upon a self-assessment with over 200 respondents within the field of S&OP. Within the dimension “S&OP Process” (ibid.) the author expresses the frequency of the execution of the S&OP process and the related meetings that are held multiples times on an event-driven basis in the most mature stage. The second stage “S&OP Organization Structure” (ibid.) assesses the structural organization of and the responsibilities for the S&OP process in the company. Following “S&OP Resource Effectiveness” (ibid.) is related to the scope of resources under investigation “from scale of business to type of fixed and operating assets” (Elbaum 2004, p. 17). While “S&OP Business Information Architecture” (Elbaum 2004, p. 18) deals with the IT systems involved and their integration, the stage “S&OP Organizational Decisions Making” (ibid.) is related to the decision making authority which is kept in the functional silos at the less mature stage but becomes increasingly integrated with higher maturity stages. The final dimension “S&OP Internal and External Collaboration” (ibid.) addresses cross-functional and inter-company collaboration which is executed in real-time along the whole supply chain at best in class companies. Using the S&OP, Elbaum (2004) revealed that companies having a mature S&OP process in place outperform those that only apply S&OP mechanisms from the initial maturity stages. However, even in less mature stages S&OP positively influences the company. Moreover, lower performance companies are more affected by the implementation of S&OP initiatives and they do not have to invest less in technology and process improvements compared to the implementation of APS in more mature stages. The second paper in this stream written by Viswanathan (2009) is based on a self-assessment survey with more than 220 companies participating. The results of this survey contain a five-dimensional S&OP with Elbaum’s (2005) stages “Laggards”, “Industry Average” and “Best in Class” (Viswanathan, p. 10). Indeed, the five dimensions “Process”, “Organization”, “Knowledge”, “Technology” and “Performance” (ibid.) do not provide a textual description for the characteristic value at each stage. Rather, they are represented by questions for the self-assessment of the companies to assign each respondent company to the three maturity stages. The characteristic values at each stage are represented by the percental results of the company self-assessment. These percentages do not give any further insights on the actual situation at each stage. The coverage of the dimensions equals to a large degree the dimensions of Elbaum’s (2005) S&OP. Thus, they are not mentioned in more detail. Furthermore, the author provided a high level, KPI-based assessment to categorize a company based on the three KPIs customer service level, average cash conversion cycle and average forecast accuracy at the product family level. Based on these KPIs the author reveals that 18 percent of the respondents have maturity best in class, 54 percent are on the industry average stage and 28 percent are laggards with their S&OP process assessment (Viswanathan 2009). However, the connection between the KPIs used for determining the maturity level and S&OP remains unclear. These KPIs can be affected by other company-internal and -external effects such as the overall economic situation. The third paper of the Aberdeen Group stream does not provide a detailed, textual S&OP. It also presents a high level, KPI-based S&OP (Ball 2013). Compared to Viswanathan’s (2009) S&OP it keeps the three aforementioned KPIs and adds the gross margin change over the last 2 years as an additional measurement for the company assessment (Ball 2013). For the most recent S&OP of this stream the same limitations hold true as for the high level S&OP presented by Viswanathan (2009). So the Aberdeen S&OP research stream is represented by Elbaum’s (2005) S&OP which is the first out of this stream that has been published. It is the only S&OP of this stream that provides a textual description of the characteristic values for each dimension at each stage for the comparison in chapter 5.2 (Appendix D). Ball’s (2013) high level, KPI-based S&OP and the percentages in Viswanathan’s (2009) S&OP are not detailed enough for the further assessment.


[1] Online literature search engine of the Universitäts- und Landesbibliothek and University of Münster.

[2] Gartner, Inc. is a research and advisory company providing its clients with IT related analysis.

[3] AMR Research was an independent research and industry analysis firm focused on supply chain practices.

[4] Aberdeen Group is a technology and services company providing market research within the areas supply chain management and IT.

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Sales and Operations Planning. Scientific and Consultancy Maturity Models Indicating the Degree of Implementation
University of Münster  (Lehrstuhl für Wirtschaftsinformatik und Logistik)
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sales, operations, planning, scientific, consultancy, maturity, models, indicating, degree, implementation
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Tobias Wulfert (Author), 2016, Sales and Operations Planning. Scientific and Consultancy Maturity Models Indicating the Degree of Implementation, Munich, GRIN Verlag,


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