Browsing by Author "Appelqvist, Patrik; Tohtori"

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Reengineering a physical distribution network in the sport instruments industry
(2008) Kauppinen, Petteri
Faculty of Information and Natural Sciences | Master's thesis
Today's fierce competitive environment drives companies to seek competitive advantage from their supply chains. Earlier companies focused on cost reduction, but now the ever changing environment forces companies to increase the responsiveness of their supply chains. Agility and flexibility are today's paradigms towards to more responsive supply chain. This research studies the design of physical distribution network. This research contains two parts. First part, theoretical is based on supply chain management, physical distribution and performance management. Empirical part applies the knowledge build during the theoretical part in Finnish based sport instrument company. The main research question is "What is the optimal physical distribution network for Case Company?". Literature part presents a general framework for companies how to analyze their supply chains and products to devise optimal physical distribution networks. To devise the optimal distribution network company has to go through four steps. First is to define the nature of product, second is to decide priorities in the supply chain, third to define a proposal for the optimal distribution network and fourth to use performance measures to define optimal distribution network. Empirical part analyzed Case Company using the framework that literature review presented. Author conducted the four step analysis presented above in the empirical part. The research approach of thesis was constructive and also principles of the case study approach were applied. The findings of empirical part show that companies whose products' demand patterns are unpredictable and the supply chain requires agile and flexible performance, deliveries directly to retailers can be lucrative choice when considering physical distribution structure. Depending on the As-Is state of physical distribution there is possibility to shorten total order cycle time and cut inventory levels. Distance to customer is not measured anymore in kilometers, but in time. This research shows that Case Company can be nearer to customer in time when the location of distribution centre is further. Direct delivery is possible to implement without increasing logistics cost. Direct retail deliveries will increase the costs of pollution, because companies need use more airfreight to meet the customer requirements. Direct retail deliveries are more attracting choice when delivering goods from east to west. This is due to time difference between consignor and consignee.