Study about Sales and Operations Planning: Cross-Functional Alignment in Supply Chain Planning
Abstract: In most organizations, supply chain planning is a cross-functional effort. Functional areas such as sales, marketing, finance, and operations traditionally specialize in portions of the planning activities, which results in conflicts over expectations, preferences, and priorities. We report findings from a detailed case analysis of a successful supply chain planning process. In contrast to traditional research on this area, which focuses on incentives, responsibilities, and structures, we adopt a process perspective and find that integration was achieved despite an incentive landscape that did not support it. By drawing a distinction between the incentive landscape and the planning process, we identify process as an additional mediator beyond the incentive landscape that can affect organizational outcomes.
Introduction: In most organizations, supply chain planning the administration of supply-facing and demand-facing activities to minimize mismatches and thus create and capture value is a cross-functional effort. In most cases, this means that each functional area, such as sales, marketing, finance, and operations, tends to specialize in its own portion of the planning activities. Such specialization is notorious for generating conflicts over differing expectations, preferences, and priorities with respect to how the matching of demand and supply should be accomplished (Shapiro, 1977). The reconciliation of these conflicts is generally referred to as coordination. Coordination in the operations management literatures generally assumes some agreement in the assessment of the firm’s environment and on the options available for an organizational response: the challenge centers on the details of the organizational response. Keep reading…
