Leitax Essay

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07-001 Cross Functional Alignment in Supply Chain Planning: A Case Study of Sales & Operations Planning Revised October 11, 2006 Professor Rogelio Oliva* Professor Noel Watson** *Mays Business School, Texas A&M University, College Station, TX 77843-4217 roliva@tamu.edu **Harvard Business School, Boston, MA 02163-1010 nwatson@hbs.edu Copyright © 2006 Rogelio Oliva and Noel Watson Working papers are in draft form. This working paper is distributed for purposes of comment and discussion only. It may not be cited or reproduced without permission of the copyright holders. Copies of working papers are available from the authors. Cross Functional Alignment in Supply Chain Planning: A Case Study of Sales & Operations Planning Abstract In 2002, Leitax, a niche consumer electronics company, suffered serious supply chain planning mishaps due to poor cross-functional integration in the supply/demand planning activities. The poor integration resulted from organizational differentiation among the functions and an unsophisticated approach to integration. In response to the planning mishaps, the organization introduced significant changes, which we examine in this case study. After highlighting the constituent responsibilities, structures, and processes, we recognize a system, as opposed to a list of mechanisms, as responsible for cross-functional integration. Operationalizing integration as functional alignment with generated plans, we find collaborative engagement of the functions to be a consistent process feature and operational norm encouraged and maintained by integrators. In particular, the information processing nature of the sales and operations planning (S&OP) process introduced at Leitax is argued effective as a result of this collaborative engagement. We argue that this collaborative engagement positively influences alignment even in the absence of an
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