The purpose of this thesis is to provide a development proposal for the target company’s sales and operations planning process. The objective of this research is to recognize the current state and key improvement areas of the process. This information will then be used as a basis in creating the development plan and proposal for the process. This research is conducted to find out the answers for the two key research questions: How is the sales and operations planning handled now and how can the sales and operations planning process be improved.
5.1 Research plan
Literature analysis from the business nature of EMS industry and the sales and operations planning process are a starting point of this research. Understanding the principals of S&OP and what kind of environment in general is EMS industry are vital for providing the best possible development proposals for the target company. The research methods that were chosen to be used for data collection were: questionnaire, interviews, observation and performance monitoring. It was determined that these methods together provide the best possible insight to the company’s sales and operations planning process. As an outcome of analyzing the data collected with these methods, the current state of the process and key improvement areas were identified. The process of the research plan is shown in figure 9.
Figure 9. The process of the research plan.
5.2 Questionnaire
The most common data collection method is the questionnaire. Questionnaires can be used for both obtaining subjective information about participants and to document objective, measurable impact results. Questionnaires usually consists of any of all of these types of questions; Open ended questions – allow unlimited answers, checklists – participant is asked to check from a list of items, two-way questions – limit answer to a pair of alternative responses, multiple-choice questions – limit answer to several possible answers and ranking scales – participant has to rank a list of items. (Phillips & Stawarski 2008: 1-2)
In the questionnaire conducted for this research, the questions were split to two different categories: multiple-choice questions and ranking scales. For the questionnaire answers to be comparable, these two question categories provided to best possible outcome for analysis. Open ended questions would have given the answerer too much room for variance, and most likely caused the answer to be very different from each other. Limiting the answers with a two-way questions on the other hand would have given a very narrow view on sales and operations planning process itself. The questionnaire purpose was to obtain subjective information, which could then be used for both individual analysis, but also for a collective analysis when all the answers are put together.
The questionnaire was sent to persons who operate in different roles and parts of the organization and either in management or top management role, and whom are a part of the current sales and operations planning process. The total number of persons the questionnaire was sent to was eight, and all of them answered the questionnaire. The questionnaire was conducted with web-based Microsoft Forms -software.
Before sending the questionnaire, the background and purpose of the research was clearly explained to attending individuals. The purpose of the questionnaire was two- parted: to get picture of the current state of S&OP process, and find out the things that are considered to need improvement. Each individuals answers created to theme for which the individuals interview will focus on.
The questionnaire included evaluation of the current quality of the S&OP process, evaluation of how well key functions within the sales and operations planning process are currently executed, and how important these functions are seen regarding the S&OP process. All these were evaluated with grades from 1 to 7, 7 being the most positive
grade that can be given. Then the questionnaire involved questions for which of the functions presented would need the most improvement, and what is the current S&OP cycle in use. For the improvement question, the answerer also had an option the freely write anything that he or she felt needed improvement the most. Finally the last three questions were regarding if the sales and operations planning can be improved with internal actions, if S&OP plays a key role in company’s customer service performance in the future and whether the S&OP plays a key role in company’s business performance and success in the future. The last three questions were graded from 1 to 7 again, 7 being the most positive grade that can be given. The content of the questionnaire can be seen from appendix 1.
5.3 Interviews
Interviews can often secure data that is not available in performance records or data that is difficult to obtain through written responses. Interviews may uncover more data through participants reactions than surveys and questionnaires. Interviews fall into two categories: structured and unstructured. A structured interview is almost like a questionnaire – specific questions are asked with a little room for variance in the responses. An unstructured interview allows participants to answer with more variance, but also allows the interviewer to probe for additional information. Usually unstructured interviews uses a few general types of questions that can lead to more detailed information. (Phillips & Stawarski 2008: 23-24)
Interviews were scheduled so that the questionnaire results had been collected and preliminary analysis created. Interviews were unstructured, conducted partly based on the results of the questionnaire. All the interviews started with and included a couple of before-thought questions based on the individuals questionnaire answers. These questions were conducted to lead the way to the deeper, more detailed information. The purpose of the interviews was to get a better picture of the details behind the questions in the questionnaire, and to get more information from the sales and operations planning process than what the questionnaire allowed to. Each individual was interviewed separately, so everyone could bring out their own view of the process and the responses would not be influenced by other people. All of the eight persons that had answered the questionnaire were also interviewed, and each interview lasted 30 to 60 minutes. The questions of each interview were at some level tailored based on the interviewees
answers in the questionnaire, and the role and responsibilities the interviewee has in the company. This was done to give as wide picture of the current process and responsibilities as possible, and to make deeper knowledge of certain aspects of the process available. In example, it could be expected that a sales manager has better knowledge of the parts of the process where sales managers role is needed and a part of. In addition, the interviewees were also asked to bring up more wider view of different parts of the S&OP process, not just the part they were directly involved in. The structured questions of the interview were planned to take the discussion in to deeper level, allowing the interviewer to access information through unstructured questions and discussion.
The structured questions presented in the interviews were more of a general type, which gave the interviewees more room for variance in their responses. Examples of structured questions that were asked:
• Based on your answers, function 1, 2 and 3 need the most improvement. Why is that and what do you see could be done to improve these functions? How can the poor functioning of these be seen in the S&OP process?
• Based on your answers, functions 4, 5 and 6 are working well. Could you elaborate? How can this been seen in the S&OP process?
• Any other aspects of the process that would need improvement in your opinion?
• What are the roles involved in the S&OP process?
• What acvities are involved in the S&OP process?
• What are the biggest individual challenges in the S&OP process, and how can these be tackled?
• How can the S&OP process be improved internally and what are the greatest challenges / bottlenecks for the improvement?
Part of the interview process was observing the interviewee – following if there was any changes in the behavior when being asked or answering to the questions. The interviews
were originally planned to be kept face-to-face, but the COVID-19 pandemic stopped that from happening – the target company’s policy throughout the pandemic has been to favor remote work and avoid unnecessary face-to-face engagement. Because of this, interviews were conducted through Microsoft Teams -software.
5.4 Performance monitoring
Different data for performance monitoring is available in every company. Performance monitoring is purely based on performance data – such as output, quality, costs and time. In most companies, there are some record-keeping systems and that is where it is the easiest to find the data for monitoring. (Phillips & Stawarski 2008: 35-36)
One way to find possible improvement targets in the company’s S&OP process was to take a look at the company’s performance measures. The company has many measures built in their ERP, such as turnover, order book, inventory value by raw materials, semi- finished and ready products, and customer order backlogs. Some reports and measures are built outside of the ERP but using data available in the ERP, such as on-time delivery.
Monitoring performance measures enables to see if there has been any changes regarding any measure within some months, a year, or a couple of years. If these changes are pointing to a negative direction, it can be viewed as an indication of something that can be improved in the sales and operations planning process.
5.5 Current state analysis
Current state analysis describes the state of the current sales and operations planning process. The questionnaire, interviews, and performance monitoring provide the basis for the analysis. By comparing the answers and feedback received in the questionnaire and interviews to the development of company’s performance indicators, a realistic view for the current state of S&OP process can be reached.