How to Integrate Purchasing with the Sales and Operations Planning Process

Sammanfattning: Sales and Operations Planning, S&OP, is a cross-functional, collaborative business manage- ment process where the goal is to balance demand and supply through an operational plan, aligned with the strategy of the company. Alfa Laval, a Swedish manufacturer founded 1883, has during the last year implemented Sales and Operations Planning at their business unit Gasketed Plate Heat Exchangers. In order to balance demand and supply and to link strategic plans with day-to-day op- erations, the operations department at Alfa Laval has to work cross-functionally with the sales department. Currently, the demand plans are derived from the sales department and the supply capacity originates from the manufacturing only. To understand the complete supply capacity, and to fully balance supply and demand, the procurement capacity has to be reviewed in addition to the production capacity. Hence, the goal with this master thesis is to develop a process to include procurement in the S&OP collaboration. A literature review was conducted to gain a deeper understanding of the theory behind S&OP, procurement and the relationship between the two areas. This was followed by a benchmarking study, conducted as a complement to the literature review. In addition, an empirical analysis at Alfa Laval was performed to fully understand the current prcoesses which the new processes has to be aligned with. With knowledge gained from the literature review, benchmarking study and empirical anal- ysis, it was possible to analyze how to connect the new sourcing processes with the S&OP process according to literature and how to adapt this to fulfill the needs at Alfa Laval. With the recent implementation of S&OP at Alfa Laval, the current maturity level of the process was analyzed and taken into consideration when creating the recommendation. The recommended solution is built on two processes, where the primary process identifies supply risks by analyzing the current sourcing setup. With the collected data, it is possible to identify a number of keys which can be used in order to break down the demand plan to the same level of detail as the capacity. The second process is designed as a step by step process to be followed at the existing meetings in the S&OP process, to identify gaps between the supply capacity and the demand plan.