Information sharing for sales and operations planning: Contextualized solutions and mechanisms

• Author: Risto Rajala,Jan Holmström,Riikka Kaipia,Johanna Småros
• Published date: 01 May 2017
• Date: 01 May 2017
• DOI: http://doi.org/10.1016/j.jom.2017.04.001

Information sharing for sales and operations planning: Contextualized

solutions and mechanisms

Riikka Kaipia

a

, Jan Holmstr€

om

b

,

*

, Johanna Småros

c

, Risto Rajala

b

a

Chalmers University of Technology, Sweden

b

Aalto University, Finland

c

Relex Solutions, Finland

article info

Article history:

Received 8 January 2016

Received in revised form

14 March 2017

Accepted 10 April 2017

Available online 29 April 2017

Accepted by: Mikko Ketokivi.

Keywords:

Supply chain collaboration

Sales and operations planning

Product introductions

Point-of-sales data

Packaged consumer goods

Design science

abstract

We develop actionable design propositions for collaborative sales and operations planning (S&OP) based

on the observation of contexts in which bene fits are generated dor are absent dfrom retail information

sharing. An information sharing pilot project in a real-life setting of two product manufacturers and one

retailer was designed. The project resulted in one manufacturer, serving a retailer from its local factory,

developing a process for collaborative S&OP, while the other manufacturer serving a retailer from more

distant regional factories abandoned the process. The evaluation of the outcomes experienced by the two

manufacturers allows us to examine contexts in fine-grained detail and explain why introducing infor-

mation sharing in the S&OP processes produce dor fail to produce dbenefits. The paper contributes to

the supply chain information sharing literature by presenting a field tested and evolved S&OP design for

non-standard demand situations, and by a contextual analysis of the mechanisms that produce the

benefits of retailer collaboration and information sharing in the S&OP process.

©2017 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND

license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

1. Introduction

Even though successful case examples show that information

sharing can be very valuable in sales and operations planning

(Ghemawat and Nueno, 20 03; Fisher and Raman, 1996), the oper-

ations and supply chain management literature recognizes that

achieving the benefits may be challenging (Simchi-Levi and Zhao,

2003; Thom

e et al., 2012; Tuomikangas and Kaipia, 2014). In this

paper we design and evaluate an information sharing intervention

in the field to identify the fine-grained contextual differences that

affect achievable benefits, and assess the attractiveness of intro-

ducing collaborative S&OP.

A hallmark of S&OP is its ability for formalized planning and

data management to enhance both intra- and inter-organizational

integration (Oliva and Watson, 2011; Singhal and Singhal, 2007).

In the S&OP literature, demand planning in general and accurate

forecasting in particular are essential elements (Ivert and Jonsson,

2010; Nakano, 2009; Oliva and Watson, 2011) of enabling inte-

grated planning. We know from previous research that

collaborative S&OP using downstream sales data is potentially

beneficial in situations of unknown or uncertain demand, such as

product introductions or promotions (Alftan et al., 2015; Cachon

and Fisher, 2000; Lehtonen et al., 2005; Ramanathan and

Muyldermans, 2010; Ramanathan, 2012). Nevertheless, modelling

research has concentrated on situations in which demand is either

stationary or follows a well-defined pattern (Aviv, 2001; Cachon

and Fisher, 2000; Gavirneni et al., 1999; Simchi-Levi and Zhao,

2003). In addition to the well-known descriptive cases such as Zara

or Sport Obermeyer (Ghemawat and Nueno, 2003; Fisher and

Raman, 1996), the numerous model-based analyses, and the rare

controlled experiments (Tokaret al., 2011), this domain of academic

research needs fine-grained design-oriented contributions on the

design and effects of information sharing in real-life product in-

troductions and promotions.

Design science research in the social domain and management

aims to bridge the practice-academia divide through the develop-

ment of actionable knowledge grounded in the empirical evalua-

tion of how designs work in the field (cf., Holloway et al., 2016). This

paper presents a solution design for information sharing in a

collaborative S&OP process and evaluates how it can be effectively

introduced in the real-life settings of two manufacturers for special

demand situations. Point-of-sales (PoS) information sharing is too

*Corresponding author.

E-mail address: jan.holmstrom@aalto.fi(J. Holmstr€

om).

Contents lists available at ScienceDirect

Journal of Operations Management

journal homepage: www.elsevier.com/locate/jom

http://dx.doi.org/10.1016/j.jom.2017.04.001

0272-6963/©2017The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-NDlicense (http://creativecommons.org/licenses/by-nc-nd/4.0/).

Journal of Operations Management 52 (2017) 15e29