Sales and Operations Planning: a comparison between the demand-driven and traditional approaches

Abstract

Supply Chain Management (SCM) is an important concept to establish links among companies. With the aim to reach the SCM goals, companies must define processes that links the decisions areas. In this context, a process to be dealt is the Sales and Operations Planning (S&OP). The S&OP is a tactical planning process, executed on monthly-basis and led by senior management with the aim to balance demand, production, distribution, procurement and finance, to ensure the plans and performance are aligned to support the business strategic plan. In this sense, a literature review was presented in this paper in order to compare the traditional approach and the demand-driven approach for the S&OP. As expected, because of the more complex environment to be dealt in a demand-driven environment, the S&OP evolved to be able to be executed properly. However, further studies in this area should be developed in order to obtain a final framework for the demand-driven S&OP, to analyse applications in industries, to understand performance implications and to develop a performance framework for the demand-driven S&OP.