Developing the delivery chain in engineer-to-order context

Abstract

Supply chain management is a systematic approach to manage supply chains as efficiently as possible. Especially engineer-to-order companies, where lead times are usually long, have realized the need for optimization of processes. The goal of this study is to identify means how the efficiency of a delivery chain can be developed in an engineer-to-order context. The research accomplishes its goal by conducting a single case study in an engineer-to-order company.

The delivery process was analyzed using LOGI-analysis introduced by Luhtala et al. (1994), concentrating on the following phases: order processing, engineering, purchasing, manufacturing, and distribution. As a result, the major challenges in the delivery process were determined: management of the entire delivery process, customer specification, and organizational communication.

Each challenge was influenced by number of factors that have effect on the efficiency of the delivery process. Customer specification problems were caused by the factors such as lack of technical expertise in the beginning of delivery chain, insufficient ordering tools, and incomplete quality checks. Management challenges of the delivery process consisted of factors such as variation in working practices, infinite capacity planning system, slack times, rush orders, order changes, and lack of common metrics. Organizational communication challenges were affected by poor information sharing, cultural differences, trust issues, and low forecasting accuracy.

The outcome of this study is a set of recommendations how the case company can improve the efficiency of the delivery chain. The results can be applied also in other companies operating in the similar environment.