Sales and Operations planning (S&OP) is an approach meant to help firms achieve demand and supply balance, yet experts agree that it has fallen short on delivering anticipated benefits. Carried out by cross-functional teams, S&OP entails getting people from different thought worlds, especially sales, aligned around common goals. Despite ample practitioner guidance, there is a dearth of scholarly research indicating pathways to success. Using a group effectiveness theoretical framework, this study identifies both internal team factors and contextual influencers that are predictors of S&OP effectiveness. Perspectives were captured from S&OP team members across a wide cross-section of industries representing sales and operations functions using a survey-based approach. Results indicate that internal team factors of social cohesion and decision making autonomy are key drivers of collaboration. Similarly, information quality, procedural quality, and team-based rewards/incentives serve as contextual influencers of collaboration. In turn, collaboration serves as a central mediator, partially linking antecedents to S&OP effectiveness and also serving as a direct influencer of success. Moreover, having joint rewards and incentives, which is often not the case among S&OP teams, is the greatest overall driver of S&OP effectiveness. Overall, these findings provide empirically-based guidance for managers seeking to determine which factors are most important for S&OP team success. Additionally, grounding S&OP in principles of group effectiveness theory will also aid future academic study in efforts to help firms achieve greater demand and supply balance.
Available at: http://works.bepress.com/scott_c_ambrose/21/