Proactively and reactively managing risks through sales & operations planning

Hendryk Dittfeld*, Kirstin Scholten, Dirk Pieter Donk, van

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

Purpose Risks can easily disrupt the demand-supply match targeted by sales and operations planning (S&OP). As surprisingly little is known of how organizations identify, assess, treat and monitor risks through tactical planning processes, this paper zooms in on the S&OP set-up and process parameters to explore how risks are managed through S&OP. Design/methodology/approach A multiple case study analyzes the S&OP processes of seven organizations in the process industry, drawing on 17 in-depth interviews with high-ranking representatives, internal and external documents, and a group meeting with participating organizations. Findings The study finds that organizations proactively design their S&OP based on their main risk focus stemming from the planning environment. In turn, such designs proactively support organizations' risk identification, assessment, treatment and monitoring through their S&OP execution. Reactively, a crisis S&OP meeting - making use of the structure of S&OP - can be used as a risk-treatment tool, and S&OP design can be temporarily adapted to deal with emerging risks. Originality/value This study is among the first to empirically elucidate risk management through S&OP. S&OP design, execution and adaption are identified as three interconnected strategies that allow organizations to manage risks. The design enables risk management activities in the monthly execution of S&OP. The reactive role of S&OP in risk management is particularly novel.

Original languageEnglish
Number of pages19
JournalInternational Journal of Physical Distribution & Logistics Management
DOIs
Publication statusE-pub ahead of print - 2021

Keywords

  • Sales and operations planning
  • Risk management
  • Process industry
  • Case study
  • SUPPLY CHAIN RESILIENCE
  • TERM CAPACITY MANAGEMENT
  • LINKING
  • PERFORMANCE
  • CONTINGENCY
  • STRATEGIES
  • FRAMEWORK

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