Sales and operations planning and the firm performance

Purpose - This paper aims to improve upon the highly dispersed sales and operations planning (S&OP) research by integrating the findings of existing studies to identify and measure the size of the effect of S&OP on firm performance. Design/methodology/approach - The methodology adopted was a systematic literature review of 271 abstracts and 55 papers. Three databases were selected for the search – Emerald, EBSCO, and ScienceDirect. Findings - Although empirical evidence of the effects of S&OP in the supply chain is described, relatively few of the 55 papers reviewed estimate the effect of S&OP on firm performance. The research findings indicate a lack of unifying frameworks for the measurement of S&OP and constructs related to firm performance. The review offers partial evidence of the effect of S&OP on firm performance, suggesting the need for additional scientifically sound survey or case study research on S&OP. Practical implications - Practitioners will benefit from insights related to the intermediate role of S&OP in mediating the effects of structural changes on firm performance. There is at least partial evidence that cross‐functional planning processes can mitigate the negative effect of misaligned organisational structures and contradictory incentives schemes on firm performance. Formal and informal communications between functions, networking and internal integrating roles can boost performance. Furthermore, internal alignment seems to facilitate supply chain integration with both suppliers and customers, particularly when inter‐organisational information systems favour supply chain integration. Originality/value - This paper contributes to providing a better understanding of the role of S&OP as a determinant of firm performance in the supply chain.