Developing Sales and Operations Execution Process within the Sales and Operations Planning Framework : case Neste Oyj

Abstract

This thesis focused on evaluation of the current state and maturity level of Sales and Operations Execution (S&OE) process within the broader Sales and Operations Planning (SOP) context and on the identification of the key areas of the S&OE process that required development at the commissioning company Neste Oyj. S&OP and S&OE are both business planning processes helping organizations to align and clarify their strategic goals, customer demand, and operational capabilities altogether to make company level decisions based on and justified by data. The main purpose of S&OE is to balance supply and demand in short-term and to align the plans from S&OP – a process focused to mid-term planning – to executable actions in the daily operations of a company. The objective of this thesis was to re-design Neste’s current S&OE process by enhancing its maturity by creating a standardized, transparent, and efficient approach to daily operational planning. The case company has implemented processes for both S&OP and S&OE, but the current process analysis of the existing S&OE process revealed difficulties in distinguishing between mid-term and short-term planning, as well as challenges in aligning S&OP plans to executable actions in S&OE. Additionally, case company doesn’t currently have any implemented key performance indicators (KPI) to actually track and follow the performance of their S&OE process. In the theoretical part of this thesis, the business planning framework and key characteristics of business planning processes are discussed. Integrated Business Planning (IBP) and Sales and Operations Planning (S&OP) are explored, with differing definitions found in literature. While some sources consider IBP synonymous with S&OP, other sources view it as a distinct process, where the distinguishing factor is the level of maturity. Consequently, both IBP and S&OP are covered in this study's theoretical framework. Due to the scarcity of literature explicitly on S&OE, it was essential to primarily utilize S&OP literature and publicly accessible sources such as blogs and internet articles concerning S&OE to support the creation of a new S&OE process. This thesis focuses specifically on the managerial aspects of the S&OE process within the broader context of the business planning framework, highlighting the importance of understanding the interconnectedness between S&OP, S&OE, and other planning concepts. This thesis employed a constructive research methodology with a both qualitative and quantitative research approaches to develop concrete solutions to the existing problem at Neste Oyj. It involved quantitatively analyzing responses from company stakeholders associated with the current S&OE process through surveys, as well as qualitative document and content analysis and examination of the company's current key performance indicators. These methods were instrumental in identifying the current state of the S&OE process and to find the areas for improvement. The resulting research findings, derived from these thorough methodologies and subsequent analyses, were considered reliable. Based on the research results, deliverable of this thesis was a development proposal created by combining relevant theory and literature with an analysis of the current state and identified areas for improvement, in a form of a robust, effective, coherent and transparent new S&OE process description and KPI parameters for the tracking of the performance of the process. For the purpose of continuous improvement of the S&OE process in the future, further development ideas were also shared to the company.