Category: Leisure Products

S&OP Design and Implementation in the Fitness Industry

By Allison Taylor Oblon, supervised by Robert A. Novack📧 (Thesis Supervisor) and John C. Spychalski📧 (Honors Advisor) (2020)

The prevalence of Sales and Operations Planning (S&OP) is expanding rapidly as an increasing number of companies begin to recognize the benefits of a process centered on cross-functional collaboration and creating a balance between supply and demand. While the basic framework of S&OP is relatively consistent across many businesses – demand planning, supply planning, preliminary review, and executive review – there is no one-size-fits-all design that will optimize the performance of every business in every industry. Considering the known benefit stream of S&OP and an unmet need for a more sophisticated planning model in service industries, this thesis will compare manufacturing’s version of S&OP with the foundational beginnings of the planning process in the service industry. This thesis will analyze the technology and science-backed fitness franchise, Orangetheory Fitness, to specifically illustrate how S&OP differs between the service and manufacturing industries and utilize their varying concepts of supply, demand, and performance-tracking metrics to develop a specialized S&OP process. This thesis will begin by explaining the differences between the two sectors and include an overview of Orangetheory Fitness and its current forecasting strategies. An analysis will follow detailing the benefits of S&OP for service-based firms as well as outlines for organizational structures to follow when building a company’s specific plan. Finally, recommendations and a step-by-step S&OP process tailored to the needs of Orangetheory Fitness will be offered to ensure successful implementation of the benefits
S&OP provides.

Access the paper at Electronic Theses for Schreyer Honors College (ETDA) website here.

Flexible Products for Dynamic Preferences

By A. Alptekinoglu📧 and K. Ramachandran

In Production and Operations Management, 2019, 28 (6): 1558–1576. https://doi.org/10.1111/poms.12990

Consumers often have needs that change in a dynamic fashion over time due to physiological, mental, or environmental variations. We develop a model to address a product strategy question on how to satisfy dynamic consumer preferences: Should a firm offer multiple standard products, each designed for a specific purpose (e.g., several specialized golf clubs), or a flexible product that can be reconfigured by consumers as their preferences change (e.g., one adjustable golf club)? Often the latter approach is fuelled by new technology, like the dial‐a‐dose system that Novo Nordisk invented and perfected over the years for its insulin pens. We find that products that deliver a high utility to consumers are ideal candidates for flexible designs, as higher utility encourages reconfiguration and justifies a flexibility premium. We also discover a non‐obvious relationship between optimal product strategy and dynamic consumer preferences. Intuition suggests that product flexibility would be more valuable when consumer preferences are less predictable. Instead, we find that a flexible product does not always lead to higher profits when consumer preferences are more uncertain; flexibility is most profitable when preference uncertainty is in an intermediate range. Additionally, we derive insights regarding the role of consumer patience, unit production costs, utility and durability differences between flexible and standard products, and heterogeneity in consumers’ product valuations. We find that imperfect durability can be an advantage for flexible products, and that heterogeneity can lead to a hybrid optimal product strategy, where offering a mix of flexible and standard products enables price discrimination between high‐ and low‐valuation consumers.

Keywords: Product strategy; New product design; Product variety management; Post‐purchase product variety; Delayed product differentiation; Postponement

Consumer Markets of Closed-Loop Supply Chains

By V. Daniel Guide📧 and J. Abbey

In Environmentally Responsible Supply Chains, Volume 3: 3–17, 2016 (Invited. Peer-reviewed/refereed). https://doi.org/10.1007/978-3-319-30094-8_1

Though product reuse through closed-loop supply chains has many benefits for firms, as outlined throughout this book, consumers may not fully appreciate the benefits of buying previously used products. This conjecture led to a series of studies related to how consumers perceive reused products produced in a closed-loop supply chain. Specifically, this chapter summarizes the results from a series of studies that examined how consumers perceive remanufactured and refurbished products. The studies ranged from measuring simple reactions to remanufactured products through experimental manipulation of discount levels and brand equity as a means to determine the appeal of remanufactured products in the general U.S. consumer market. The findings breakdown into multiple levers that prompt consumer interest in remanufactured products including the usually assumed consumer greenness, quality perceptions, discounts, and brand equity. However, the studies also revealed the issue of aversion toward remanufactured products through both disgust and a segment of consumers who only desire new products.

Keywords: Supply Chain; Product Category; Brand Equity; Consumer Market; Online Channel 

Consumer Markets for Remanufactured and Refurbished products

By James D. Abbey, Margaret G. Meloy, Joseph Blackburn, and Daniel R. Guide📧

In California Management Review, 2015, 57 (4): 26–42. https://doi.org/10.1525/cmr.2015.57.4.26

Consumer product returns in the United States are approaching three-hundred billion dollars annually. In the majority of cases, the returned products are perfectly functional convenience returns. Managers have a multi-billion dollar profit opportunity to reuse the products by strategically employing remanufacturing. Yet, remanufacturing has multiple barriers that must be understood and addressed. This article addresses several key managerial issues regarding remanufactured consumer products. First, will consumers buy remanufactured products? Second, will the green consumer segment desire remanufactured products? Third, will remanufactured product sales cannibalize new product sales? Finally, this article provides guidance regarding pricing and cannibalization mitigation strategies.

Keywords: Sustainability; Supply Chain; Marketing Strategy