Supply Chain Management: Increasing Performance and Coordination in a Sales & Operations Planning Context

Abstract: Alfa Laval’s business unit Gasketed Plate Heat Exchanger uses Sales and Operations Planning to balance supply with demand to ensure profitable growth. Currently, the business unit is experiencing inefficiencies as they fail to execute the plans from Sales and Operations Planning. Large inventories, high obsolescence, material availability, and “firefighting” are some problems mentioned. To support their strategy, the Sales and Operations Planning team wants to understand how they can address these inefficiencies and improve performance. The findings of this thesis were that a lack of knowledge and awareness impacts the business unit to not adhere to plans from the Sales and Operations Planning and that supply chain discontents have led to a large assortment and low inventory turnover. To raise the plan adherence ability in the business unit it is recommended that a knowledge development initiative is driven. Such an initiative should include increasing managerial and process knowledge and spreading general awareness of the process. The inventory turnover rate can be improved by driving modularization and incentivizing an alignment between functions to enable a phase-out of old products and indirectly obsolete inventory.