A global S&OP perspective: managing cannibalization effect at the early phase of product transition

In today’s highly competitive market, introduction of new products is a critical strategic capa-
bility, this results in frequent product transitions. Managing product transition is a complex task.
In the product transition period companies face a set of problems: accurate demand forecasts, con-
trolling production and inventory costs and providing high quality delivery performance. Literature
considers that managing the interplay between product generations can increase the chances for
success. S&OP has been recognized as a tactical supply chain planning tool fostering integration
and coordination within and across organizations to reconcile the demand and supply and to bridge
strategy and operations. Scholars have delved into the impact of S&OP mechanisms on improving
the success of new product introduction and integration of decisions related to new products, such
as determining optimal launch times.
Drawing on data from an interaction study, we propose an approach that leverages sales data to
estimate the peak time for customer switching between product generations. This enables S&OP to
function as an early warning and decision support system, facilitating smooth coordination during
the transition period between two product generations. Our contribution extends beyond the devel-
opment of this approach; it also sheds light on our interactions with stakeholders across different
divisions. These interactions highlight the evolving role of S&OP in managing product transitions,
indicating a directional shift towards a more integrated and data-driven approach in handling the
complexities of product lifecycle management