Table Of ContentWho’s in charge?: sales and operations planning
governance and alignment in the supply chain
management of multinational industrial companies
Richard Markoff
To cite this version:
Richard Markoff. Who’s in charge?: sales and operations planning governance and alignment in the
supply chain management of multinational industrial companies. Business administration. Université
Panthéon-Sorbonne - Paris I, 2017. English. NNT: 2017PA01E015. tel-01827322
HAL Id: tel-01827322
https://theses.hal.science/tel-01827322
Submitted on 2 Jul 2018
HAL is a multi-disciplinary open access L’archive ouverte pluridisciplinaire HAL, est
archive for the deposit and dissemination of sci- destinée au dépôt et à la diffusion de documents
entific research documents, whether they are pub- scientifiques de niveau recherche, publiés ou non,
lished or not. The documents may come from émanant des établissements d’enseignement et de
teaching and research institutions in France or recherche français ou étrangers, des laboratoires
abroad, or from public or private research centers. publics ou privés.
Who’s In Charge? Sales & Operations Planning Governance and Alignment in the Supply Chain Management of Multinational Industrial Companies
ESCP Europe
Ecole Doctorale de Management Panthéon-Sorbonne
ED 559
WHO’S IN CHARGE?
Sales & Operations Planning Governance and Alignment in the Supply Chain Management
of Multinational Industrial Companies
THESE
En vue de l’obtention du
DOCTORAT ÈS SCIENCES DE GESTION
Par
Richard MARKOFF
Soutenance publique le 13 Novembre 2017
JURY
Directeurs de Recherche : Mme. Valentina CARBONE
Professeur, ESCP Europe
M. Philippe ZARLOWSKI
Professeur, ESCP Europe
Rapporteurs : Mme. Nathalie FABBE-COSTES
Professeur agrégé des universités en sciences de gestion
Université Aix-Marseille
M. Nicolas MOTTIS
Professeur, Ecole polytechnique
Suffragant : M. Jean-Marc LEHU
Richard Markoff PhD Thesis 1
Who’s In Charge? Sales & Operations Planning Governance and Alignment in the Supply Chain Management of Multinational Industrial Companies
Maître de Conférences, Université Paris 1 Panthéon Sorbonne
L’Université n’entend donner aucune approbation ou improbation aux opinions émises dans les
thèses. Ces opinions doivent être considérées comme propres à leurs auteurs.
Richard Markoff PhD Thesis 2
Who’s In Charge? Sales & Operations Planning Governance and Alignment in the Supply Chain Management of Multinational Industrial Companies
QUI EST RESPONSABLE ?
Gouvernance du Processus S&OP et Alignement de la Gestion de la Supply Chain des Compagnies
Industriels Multinationales
Le processus S&OP est souvent considéré comme un processus d'alignement de l'offre et de la
demande dans les chaînes d'approvisionnementsimples et linéaires, avec un seul marché et une
seule usine. Les entreprises multinationales présentent aujourd'hui des configurations de chaînes
d'approvisionnement plus complexes possédant des usines spécialisées qui desservent plusieurs
marchés. Ce papier analyse comment les entreprises multinationales configurent leurs processus de
gouvernance S&OP pour relier les usines et les marchés, ainsi que l'influence de cette gouvernance
sur leur capacité à obtenir un alignement entre l'offre, la demande, et les plans financiers. Au
travers d'entretiens menés avec des entreprises, une typologie est définie pour les modèles de
gouvernance S&OP observés. Cette typologie suggère qu'un type de gouvernance S&OP exerçant
une autorité, à la fois dans les usines et dans les marchés, conduit à des résultats S&OP plus
probants. Un lien est également établi entre l'efficacité des S&OP et les mesures formelles
d'alignement pour la planification financière. A partir de ceci, les éléments de Contrôle de Gestion
sont précisés pour permettre la conceptualisation des S&OP en reconnaissant l'influence de la
comptabilité sur la gouvernance du processus S&OP pour assurer la transparence et l'engagement
multifonctionnel dans les contextes de la chaîne d'approvisionnement multinationale. Il en découle
quatre règles normatives pour la réussite de la gouvernance et de l'alignement du processus S&OP
dans un contexte de configuration de la chaîne d'approvisionnement multinationale.
WHO’S IN CHARGE?
Sales & Operations Planning Governance and Alignment in the Supply Chain Management of
Multinational Industrial Companies
S&OP is often seen as a process for alignment between supply and demand in simple, linear supply
chains with one market and one factory. Multinational firms today have more complex supply
chain configurations that have specialized factories serving multiple markets. This research
explores how multinational companies configure their S&OP governance linking factories and
markets and the influence this governance has on their ability to obtain alignment between supply,
demand and financial plans. Through company interviews, a typology for observed S&OP
governance models is developed, and suggests that an S&OP governance type exerting authority
simultaneously into both factories and markets leads to more successful S&OP outcomes. A link is
also drawn between S&OP effectiveness and formal policies for alignment with financial planning.
From this, elements of Management Control are deployed as a framework to furthering S&OP
conceptualization by recognizing the influence of accounting on S&OP governance in achieving
transparency and multi-functional engagement in multinational supply chain contexts. The result is
four normative rules for successful S&OP governance and alignment within a multinational supply
chain configuration context.
Richard Markoff PhD Thesis 3
Who’s In Charge? Sales & Operations Planning Governance and Alignment in the Supply Chain Management of Multinational Industrial Companies
WHO’S IN CHARGE?
Sales & Operations Planning Governance and Alignment in the Supply Chain Management of
Multinational Industrial Companies
PhD Thesis – Richard Markoff
Research Directors: Valentina Carbone and Philippe Zarlowski
ABSTRACT
S&OP is often seen as a process for alignment between supply and demand in simple, linear supply chains with
one market and one factory. Multinational firms today have more complex supply chain configurations that
have specialized factories serving multiple markets. This research explores how multinational companies
configure their S&OP governance linking factories and markets and the influence this governance has on their
ability to obtain alignment between supply, demand and financial plans. Through company interviews, a
typology for observed S&OP governance models is developed, and suggests that an S&OP governance type
exerting authority simultaneously into both factories and markets leads to more successful S&OP outcomes. A
link is also drawn between S&OP effectiveness and formal policies for alignment with financial planning. From
this, elements of Management Control are deployed as a framework to furthering S&OP conceptualization by
recognizing the influence of accounting on S&OP governance in achieving transparency and multifunctional
engagement in multinational supply chain contexts. The result is four normative rules for successful S&OP
governance and alignment within a multinational supply chain configuration context.
Richard Markoff PhD Thesis 4
Who’s In Charge? Sales & Operations Planning Governance and Alignment in the Supply Chain Management of Multinational Industrial Companies
TABLE OF CONTENTS
PROLOGUE .................................................................................................................................... 8
1. INTRODUCTION ................................................................................................................... 16
1.1 Introduction to the Thesis ......................................................................................... 17
1.2 Thesis Construction ................................................................................................... 23
1.3 Literature Review ...................................................................................................... 26
1.3.1 The State of S&OP Literature .................................................................................... 26
1.3.2 S&OP as a component of Supply Chain Integration ................................................. 32
1.3.3 Tracing S&OP in the Supply Chain Management Literature .................................... 36
1.3.4 The Bullwhip Effect, a precursor to S&OP................................................................. 42
1.3.5 Supply Chain Networks and S&OP ............................................................................ 48
1.3.6 S&OP Governance and Matrix Organizations .......................................................... 53
1.3.7 Placing S&OP in the Context of the Firm .................................................................. 58
1.4 The Research Question ............................................................................................. 61
2. RESEARCH DESIGN AND METHODOLOGY .......................................................................... 66
2.1 PhD Approach: Roadmap To Address The Research Question ................................ 67
2.2 Operationalization of Supply Chain Governance ...................................................... 70
2.3 Operationalization of S&OP Alignment .................................................................... 76
2.4 Research Methodology ............................................................................................. 83
2.5 A Word on Epistemology .......................................................................................... 89
3. RESULTS & ANALYSIS .......................................................................................................... 97
3.1 Presentation of Data ................................................................................................. 99
3.2 S&OP Governance Typology ................................................................................... 105
3.2.1 S&OP Governance Typology Matrix ....................................................................... 105
3.2.2 Examples of Each S&OP Governance Type ............................................................. 114
3.3 Discussion: Obtaining S&OP Alignment with S&OP Governance .......................... 134
4. FURTHERINGS&OP CONCEPTUALIZATION ...................................................................... 145
4.2 The Miller/Power Framework and S&OP: A Way Forward .................................... 163
4.3 Territorialization ..................................................................................................... 165
4.4 Mediation ............................................................................................................... 174
4.5 Adjudication ............................................................................................................ 181
Richard Markoff PhD Thesis 5
Who’s In Charge? Sales & Operations Planning Governance and Alignment in the Supply Chain Management of Multinational Industrial Companies
4.6 Subjectivization ....................................................................................................... 185
4.7 Finance Influence: Too Much of A Good Thing ...................................................... 190
4.8 The Challenges of Horizontal Alignment: Transfer Pricing and Total Cost of
Ownership ............................................................................................................................. 196
4.9 Context Matters ...................................................................................................... 205
5. CONCLUSIONS ................................................................................................................... 209
5.1 Addressing the Research Question ......................................................................... 211
5.2 The Four Rules for Linking S&OP Governance to Alignment .................................. 215
5.3 Furthering S&OP Conceptualization: S&OP Maturity ............................................ 225
5.4 Another Way To Look at S&OP KPI ......................................................................... 229
5.5 Contributions Beyond S&OP ................................................................................... 232
5.6 Limitations of the Research .................................................................................... 235
5.7 Practitioner Reception ............................................................................................ 240
5.8 In Summary: The Key Takeaways .......................................................................... 242
6. FURTHER RESEARCH.......................................................................................................... 245
7. ACKNOWLEDGEMENTS ..................................................................................................... 251
8. APPENDIX A ....................................................................................................................... 255
9. REFERENCES ...................................................................................................................... 259
10. INDEX OF FIGURES ......................................................................................................... 275
11. INDEX OF TABLES ........................................................................................................... 277
Richard Markoff PhD Thesis 6
Who’s In Charge? Sales & Operations Planning Governance and Alignment in the Supply Chain Management of Multinational Industrial Companies
Richard Markoff PhD Thesis 7
Who’s In Charge? Sales & Operations Planning Governance and Alignment in the Supply Chain Management of Multinational Industrial Companies
PROLOGUE
Richard Markoff PhD Thesis 8
Who’s In Charge? Sales & Operations Planning Governance and Alignment in the Supply Chain Management of Multinational Industrial Companies
I have over 20 years’ experience in supply chains for a major multinational consumer goods
firm: L’Oréal. At the start of my career the term ‘supply chain’ didn’t really exist. The most
common term was ‘logistics’. But logistics didn’t really capture what my responsibilities were
at the time.
My title was ‘Director of Logistics’, but the scope of my responsibilities went far beyond the
factory warehouse and docks. My team was responsible for all of the coordination and
planning that kept the factory running and the customer orders filled. We managed the
production planning that determined what we made in response to sales forecasts, identified
capacity constraints and helped the production teams size their staffs and working hours. We
were also responsible for the supply of packaging materials, a key element as this was the
biggest bottleneck in our factory.
Every month I would meet with the executive committee of L’Oréal Canada, joining them for
sessions where launches and service issues were reviewed. Ultimately, the senior
management at L’Oréal Canada looked to me as the guarantor of their inventory health and
service level. And this made sense, because almost everything they sold came from my
factory, and almost everything we made at our factory was for them. Our factory was
complex, rigid and expensive. L’Oréal would soon decide – as did many consumer goods
companies – to rationalize their production and specialize factories by technology for a region
or even for the whole world in some cases. There were countless benefits, with returns so
Richard Markoff PhD Thesis 9
Description:Who's In Charge? Sales & Operations Planning Governance and Alignment in the Supply Chain Management of Multinational Industrial Companies.
