Cross-Functional Alignment in Supply Chain Planning: A Case Study of Gross saless and Operationss Planning Abstract In most organisations. supply concatenation planning is a cross-functional attempt. Functional countries such as gross revenues. selling. finance. and operations traditionally specialize in parts of the planning activities. which consequences in struggles over outlooks. penchants. and precedences. We report findings from a elaborate instance analysis of a successful supply concatenation planning procedure. In contrast to traditional research on this country. which focuses on inducements. duties. and constructions. we adopt a procedure position and happen that integrating was achieved despite an inducement landscape that did non back up it.

By pulling a differentiation between the inducement landscape and the planning procedure. we identify procedure as an extra go-between beyond the inducement landscape that can impact organisational results. Therefore. organisations may be capable of integrating while different maps retain different inducements to keep focal point on their stakeholders’ demands. Through iterative cryptography. we identified the needed properties of the planning procedure that drive be aftering performance—informational. procedural. and alignment quality— but speculate that accomplishing alliance in the executing of programs can be more of import than informational and procedural quality. In add-on to treat properties. we besides identify societal elements that influenced the public presentation of the planning procedure and topographic point the information processing attributes within a broader societal and organisational context. Keywords: Operationss interface. gross revenues and operations be aftering. supply concatenation planning. instance survey.

Introduction In most organisations. supply concatenation planning—the disposal of supply-facing and demand-facing activities to minimise mismatches and therefore create and gaining control value—is a cross-functional attempt. In most instances. this means that each functional country. such as gross revenues. selling. finance. and operations. tends to specialise in its ain part of the planning activities. Such specialisation is ill-famed for bring forthing struggles over differing outlooks. penchants. and precedences with regard to how the matching of demand and supply should be accomplished ( Shapiro. 1977 ) . The rapprochement of these struggles is by and large referred to as coordination.

Coordination in the operations direction literatures by and large assumes some understanding in the appraisal of the firm’s environment and on the options available for an organisational response: the challenge centres on the inside informations of the organisational response. But supply concatenation planning requires something more: cross-functional coaction to measure the province of the supply concatenation and the demands of the organisation and so to find an attack for making and prolonging value based on that collaborative appraisal. In other words. beyond coordination. organisations must specify the job. determine the options available for covering with the job. and make an agreeable solution with coaction across differentiated maps.

Such an attack normally involves elaborate ratings. planning. and executing at the strategic. operational. and tactical degrees ( Anthony. 1965 ) . Both the operations direction and organisational behaviour literatures refer to this type of coaction as integrating ( Barratt. 2004 ; Ellinger. 2000 ; Griffin and Hauser. 1996 ; Kahn. 1996 ; Kahn and Mentzer. 1998 ; Lawrence and Lorsch. 1986 ) . With increased competition and globalisation making new chances and challenges for supply concatenation planning ( Raman and Watson. 2004 ) and furthering farther distinction within the organisation. it is clear that houses will fight even more with supply concatenation integrating as they attempt to pull off and react to the increasing complexness of markets. providers. and investors.

We expect this type of integrating in supply concatenation planning in a extremely differentiated organisation to necessitate rather a wide and expressed cross-functional range. Although peculiar cross-functional interfaces have been developed—e. g. . selling and logistics ( Ellinger. 2000 ; Stank. Daugherty. and Ellinger. 1999 ) . and buying and fabrication ( Fawcett and Magnan. 2002 ) —very few organisations have achieved the broader-reaching integrating that systematically develops multi-functional programs that are executed in a co-ordinated manner ( Barratt. 2004 ; Fawcett and Magnan. 2002 ) . While research workers have partly addressed the functions and substructure required for integrating. most of their proposals result from efforts to turn to coordination ( e. g. . Celikbas. Shanthikumar. and Swaminathan. 1999 ; Chen. 2005 ; Porteus and Whang. 1991 ) or from organizational-level analysis across houses ( e. g. . Lawrence and Lorsch. 1986 ; O’Leary-Kelly and Flores. 2002 ) .

Furthermore. really small empirical research has been done on working integrating attacks ( Malhotra and Sharma. 2002 ) and a elaborate apprehension of interdepartmental integrating based on micro-level informations has yet to be established ( Griffin and Hauser. 1996 ; Kahn. 1996 ; Kahn and Mentzer. 1998 ) . Therefore. a comprehensive apprehension of cross-functional integrating is missing in the literature ( Pagell. 2004 ) . Given the deficiency of elaborate models for cross-functional integrating. we decided to utilize case-based research to research how a functionally-differentiated organisation could accomplish such integrating for supply concatenation planning. We identified a extremely differentiated organisation with a successful supply concatenation planning procedure and used grounded theory development to place the cardinal drivers of successful cross-functional integrating.

As we mapped the inducement landscape. we found a typical aggregation of different inducements and orientations actuating the different functional groups. What was interesting about our instance survey site is that such an inducement landscape would typically bring forth misalignment in planning and execution—and so it had. until the house implemented a new supply concatenation planning procedure. That procedure resulted in significantly improved public presentation despite small alteration in the organisational inducement landscape. Since the venue of the intercession to better be aftering public presentation in our research site was the creative activity of a new planning procedure. we adopted a procedure perspective—focusing on the sequence of activities that encodes an operational logic making value within the organization—to make sense of our informations.

Through iterative cryptography. we identified the properties of the planning procedure that drive be aftering public presentation. The concepts ensuing from this analysis—informational. procedural. and alignment quality— portion some features with differentiations made in determination devising and information-processing theories ( Daft and Lengel. 1986 ; Galbraith. 1973 ; MacKenzie. 1984 ; Simon and Newell. 1972 ) . In add-on to treat properties. we besides identify societal elements that influenced the public presentation of the planning procedure and topographic point the information-processing properties within a broader societal and organisational context. The remainder of the paper is structured as follows: In Section 2. we review the relevant literature and supply motive for our research.

In Section 3. we describe our research site and methodological analysis. In Section 4. we describe the supply concatenation planning procedure that was implemented at our research site. the organisational and structural alterations that accompanied its execution. and sum up the public presentation betterment ensuing from the execution. The analysis of the enforced procedure is presented in two phases. First. in Section 5. we identify the drivers of integrating by researching the procedure attributed that supported effectual integrating. Then. in Section 6. we locate the quality of the planning procedure within other behavioural kineticss that contribute to overall public presentation. We conclude ( §7 ) . by discoursing the deductions of our findings for practicians and research workers interested in supply concatenation integrating.

Literature Review Most operations direction research on coordination across supply ironss and within organisations takes its cue from the economic sciences literature. which explores coordination in footings of how inducements. information flows. and hierarchy affect the allotment of resources ( see for illustration Cachon. 2003 ; Lariviere. 1999 ) . This attack assumes mark or optimum system aims to which allotment determinations should be aligned. Lack of coordination occurs when decentralized determination shapers have uncomplete information or conflicting inducements. Much research concerns how histrions should be compensated. given the informational and hierarchal construction ( see Eliashberg and Steinberg. 1993 ; Sahin and Robinson. 2002 ; Whang. 1995. for studies ) .

Coordination mechanisms for internal alignment include accounting-based cost strategies ( Celikbas et al. . 1999 ; Porteus. 2000 ; Watson and Zheng. 2005 ) . improved contract design ( Chen. 2005 ; Gonik. 1978 ; Li and Atkins. 2002 ) . determination doing hierarchies such as first-movers ( Kraiselburd and Watson. 2007 ; Li and Atkins. 2002 ) . and internal markets ( Kouvelis and Lariviere. 2000 ) . Many research workers. nevertheless. detect that merely in theory would an incentive-compatible strategy or an information strategy induce the histrions to implement system-wide optimum behaviour ( Chen. 1999 ; Porteus. 2000 ; Watson and Zheng. 2005 ) . In pattern. operations directors are limited by their determination devising capablenesss and may perpetrate mistakes in their refilling determinations ( see Croson. Donohue. Katok. and Sterman. 2005 ; Sterman. 1989. for grounds of hapless replenishment decision-making public presentation even under conditions of decreased complexness ) .

To turn to these restrictions. the recommended coordination mechanisms are broadened to include better information-sharing among functional determination shapers ( Dougherty. 1992 ; Shapiro. 1977 ; Van Dierdonck and Miller. 1980 ) . such as the usage of endeavor information systems ( AlMashari. Al-Mudimigh. and Zairi. 2003 ) ; appraisal of the cognitive load imposed by the rating and incentive systems ( Kouvelis and Lariviere. 2000 ; Porteus. 2000 ; Watson and Zheng. 2005 ) ; support for complex determination devising. whether from quantitative theoretical accounts ( Yano and Gilbert. 2003 ) or decision-support systems ( Crittenden. Gardiner. and Stam. 1993 ) ; and outsourcing planning to competent 3rd parties ( Troyer. Smith. Marshall. Yaniv. Tayur. Barkman. Kaya. and Liu. 2005 ) . Within the operations direction literature. we find small attending paid to the procedure for coordination.

Even when the above recommendations are considered to hold some deductions for the procedure dimension. they are normally merely directionally implicative. instead than suitably normative. with regard to procedure. So. while research workers have addressed some possible demands for integrating. most of their proposals result from efforts to turn to coordination. Furthermore. with really small empirical research done on working organisational or supply concatenation be aftering integrating attacks ( Malhotra and Sharma. 2002 ) . a elaborate apprehension of interdepartmental integrating based on micro-level informations has yet to be established ( Griffin and Hauser. 1996 ; Kahn. 1996 ; Kahn and Mentzer. 1998 ) .

Within the organisational behaviour literature. the focal point on general integrating within houses has a longer and better-established tradition. which more explicitly incorporates the behavioural kineticss of the cardinal histrions. Authoritative research suggests that the attempt required to accomplish integrating additions with the degree of distinction in the organisational environment ( Galbraith. 1977 ; Lawrence and Lorsch. 1986 ; Lorsch and Allen. 1973 ; Thompson. 1967 ) . distinction being defined as “differences in the cognitive and emotional orientation of directors in different functional departments” ( Lawrence and Lorsch. 1986. p. 11 ) . Differences amongst assorted functions’ cognitive and emotional orientations—not merely their ends and inducements but besides their positions on clip and relationships—create short-run struggles and deemphasize long-run organisational ends.

The organisational behaviour research on integrating has concentrated on the duties and constructions back uping integrating. Here. “responsibilities” refers to the distribution of determination rights among participants in the collaborative attempt. Lawrence and Lorsch ( 1986 ) . for illustration. urge for highlydifferentiated scenes the function of planimeters for organizing functional attempts. These planimeters act as transcribers. go-betweens. and integrative goal-setters. assisting steer the assorted maps. which have differing cognitive and emotional positions. into corporate attempts ( Brown and Duguid. 1991 ; Hargadon and Sutton. 1997 ; Orlikowski. Yates. Okamura. and Fujimoto. 1995 ; Yanow. 2000 ) .

“Structures. ” in this literature. refers to the attach toing formal ( and societal ) systematic agreements. relationships. and substructure that regulate the interaction among the participants in the coaction attempt. Examples of structural recommendations include the formation of work groups ( Galbraith. 1977 ) and the usage of boundary objects ( Carlile. 2002 ; Star. 1989 ) . This literature. nevertheless. besides pays small attending to the procedure position. Even in the instance of work groups or groups whose individualities are conceivably based on what they do and how they interact. more attending is focused on the fact that they act and interact than on how they act and interact ( Brown and Duguid. 2001 ) . In both the operations direction and the organisational behaviour literatures. hence. procedure is one of the lesser-understood constituents of integrating.

For the organisational behaviour literature. with its wide organisational overview. the deficiency of focal point on this context- and operations-specific dimension is expected. Although procedures are a standard of the operations direction community. recommendations for coordination have favored quantitative modeling—the discipline’s dominant research approach—with really small empirical research done on working supply concatenation be aftering integrating attacks ( Holweg and Pil. 2008 ; Malhotra and Sharma. 2002 ; Pagell. 2004 ) . 2. 1. A Process Perspective on Integration By procedure. we mean a sequence and mutuality of activities designed to accomplish a end.

Procedures systematize and standardize certain organisational acquisition at the micro-level of peculiar determinations and actions—and reap the benefits of that learning—in ways that are non easy matched by attacks based on duties and construction or by undertaking or market-based intercessions ( Cyert and March. 1963 ; Nelson and Winter. 1982 ) . Therefore. a procedure position could complement the macro-level focal point of the attacks from the organisational behaviour and operations direction literatures. This complementarity could happen in scenarios where all attacks. including the procedure attack. are straight supportive of integrating. However. given process’s possible intermediate place between. on one manus. the macrolevel intercessions accounts and. on the other. organisational public presentation. it could besides move as a qualifier of the effects of these macro-level intercessions on public presentation.

Therefore. we expect that the procedure position can cast some much-needed visible radiation on the challenges of functional integrating in supply concatenation planning and. in so making. widen the focal point in supply concatenation direction from coordination to integrating. which for many practicians more closely represents the challenges they face. Our outlooks have their case in point in the operations direction literature and we are non the first to confirm a procedure position in this manner. It is arguable that a focal point on the consequence of procedure on the integrating of R & A ; D and fabrication in the new merchandise development literature has revolutionized both the academic field and pattern ( Wheelwright and Clark. 1992 ) . A focal point on procedures and their deductions for organisational design has already been recommended in the information engineering literature. Malone and Crowston ( 1994 ; 1999 ) stress the direction of mutualities among resources and activities and seek to develop a coordination theory by qualifying assorted sorts of mutualities and placing the mechanisms that can be used to pull off them. That position does non. nevertheless. capture the traditional focal point on the histrions and their natural distinction seen in the work of organisational theoreticians ( e. g. . Lawrence and Lorsch. 1986 ; Thompson. 1967 ) .

The collaborative planning processes we examine in our instance survey are referred to in the practician literature as gross revenues and operations planning ( S & A ; OP ) processes ( Bower. 2005 ; Lapide. 2004 ; 2005 ) . Among the primary functions of S & A ; OP processes is to ease maestro planning. demand planning. and the flow of information between them. Maestro planning is chiefly concerned with the coordination of the supply side of the organisation and seeks the most efficient manner to carry through demand prognosiss over the average term ( Stadtler. 2005 ) . easing finer degrees of be aftering such as buying and stuffs demands. production. and distribution planning. Demand planning is concerned with the customer-facing side of the organisation. foretelling future demand from scheduled client orders or generalizing demand from predominating market conditions or from the demand-influencing activities ( e. g. . publicities and new merchandise launches ) of the organisation or its rivals.

A basic S & A ; OP procedure facilitates the transportation of information from demand be aftering to get the hang planning. Practitioners and faculty members likewise argue that this transportation procedure can travel beyond the superficial synchronism of maestro and demand planning to sophisticated articulation planning ( Chen. Chen. and Leu. 2006 ; Lapide. 2005 ; Van Landeghem and Vanmaele. 2002 ) . The fact that small empirical micro-level informations exists for back uping the development of a procedure position on supply concatenation be aftering sets the outlook that. at least ab initio. such a position should be based on empirical surveies such as ours.

Furthermore. procedures such as the S & A ; OP procedure. which are the objects of ongoing research guess on their possible integrative capablenesss but are besides practitionerinspired. do good campaigners for empirical observation and analysis. Finally. given that the organisational behaviour literature possesses a richer and longer tradition of focal point on integrating than does the operations direction literature. there is besides an outlook that the procedure position may necessitate to pull on theory from both subjects.