Long Term Strategies for Logistics Operations in the Coffee Business: a Focus on Finished Goods Inventory
No Thumbnail Available
URL
Journal Title
Journal ISSN
Volume Title
Helsinki University of Technology |
Diplomityö
Checking the digitized thesis and permission for publishing
Instructions for the author
Instructions for the author
Authors
Date
2005
Department
Major/Subject
Konepajatekniikka
Mcode
Kon-15
Degree programme
Language
en
Pages
125 s. + liitt. 3
Series
Abstract
To focus on core competence and to outsource functions, which are non-core, have become trends in today's business. If every company can focus on what they do best gains ought to be achieved. Along with core competence and outsourcing, also, supply chain management and logistics operations are receiving much attention. Logistics departments have considerable pressure to cut costs in the whole supply chain, but at the same time customers are becoming more demanding about delivery performance. The minimum level of customer service is increasing continuously, and to stay in business, flexible and rapid delivery performance is becoming vital. Although decreasing excess inventories in the supply chain increases visibility and forecasting accuracy, keeping inventory is still important for the manufacturer to manage high variations in demand. It reduces cost and increases delivery performance. The objective of this study is to research and reduce the warehousing alternatives for a coffee-roasting company. The objective was approached through two secondary aims: conditions affecting and affected by inventory and warehousing, as well as the impact of an outsourcing decision. Four warehousing alternatives were researched; private, public and two types of contract warehousing, a maximum sized contract warehouse for the need of a 3PL provider and an optimal sized contract warehouse for the sole need of the target company. Subsequently, a cost model was made to evaluate the financial impacts of the warehousing alternatives, which were weighed against the benefits and disadvantages of the warehousing models. According to the results of the study, considerable benefits can be gained by outsourcing the target company's warehouse function. These include flexibility in operation models and workforce, access to the knowledge and expertise of a 3PL provider, and low future investment costs in new technology and IT solutions. The study also showed that a better control of the warehouse function can be maintained if the warehouse is built adjacent to the production facility. Of the investigated warehouse alternatives, the study found the optimal sized warehouse to be the most favourable alternative for the target company. Good control combined with the benefits of outsourcing gives an excellent opportunity to develop the warehousing process at the same time as costs are reduced.Description
Supervisor
Aaltonen, KaleviThesis advisor
Forsström, MinnaReijonen, Ronny
Keywords
warehousing, varasto, warehouse, toimitusketju, supply chain, logistiikka, logistics, ulkoistaminen, outsourcing, logistiikkapalvelutoimittaja, third party logistics