Measuring Performance of an Order-to-Delivery Process : A study at Scania CV AB

Abstract: The Order-to-Delivery (OTD) process covers the entire flow from an initiated order until the productor service is delivered to the customer. OTD is considered a core flow in order to successfully deliverproducts according to the customer’s needs. Therefore, is it of importance to track the performanceof this flow and all intermediary processes through performance measurements. The key to successfulperformance measurement is to identify critical factors that can be measured towards previous states,future goals and industry best-practices. However, there are no standardized solutions that can beadopted. Instead performance measurements need to be adapted to each organization’s capabilities,limitations and needs. Effective performance measures and indicators can help steer a company in theright direction.In this thesis, Scania’s industrial OTD process and the connecting indicators has been studied. Thecompany would like to know possible indicators to measure the performance of this process so that itwill contribute to find deviations, continuous improvement and challenge the current state. There isalso a need to increase the knowledge of how to interpret and manage indicators.The project has been conducted through both empirical and theoretical studies. An extensive literaturereview has been performed. The study concluded in methods and best practices for performancemeasurements, as suggested by literature. It has also resulted in an identification of relevant OTDmeasures. Empirical studies have been conducted through a current state analysis of Scania and acompany comparison. Five companies were interviewed on the topic of performance measurements.The aim was to identify the measurements used in each of the companies OTD flow and to investigateif any best practices could be identified. The empirical findings have been analyzed towards thetheoretical findings in order to find gaps and improvement suggestions. It was found that lead timeand delivery performance are two strategic elements to evaluate a company’s OTD flow.Lastly, a concept has been developed as an additional approach to measure the part of a lead timethat has the largest variance - transport time. The concept can, with further work, be extended toinclude the entire lead time. The aim with the concept was to fairly compare different transport timesagainst each. It is believed that the approach can be used as a tool to visualize the efficiency of thetransport flow to different delivery countries and therefore determine if the country behavesaccording to a normal situation.The thesis has resulted in recommendations to implement new measures that could be of value toScania. Process wise it is suggested to better differentiate between indicators and to improve the waythey are presented and reported. It is also suggested that that quality of the input data and thereporting process for this should be reviewed.