Minimizing the risk of material shortage and waiting times via an improved order to delivery process : A study conducted within IV Produkt in Växjö

Abstract: ~ 3 ~ Abstract Master Program in Business process and Supply Chain Management Degree Project in Logistics 15 hp, Course 4FE06E Authors: Alexandra Dagberg, Alexander Thorén, Giovanni Tozzi, Kalin Velichkov Tutor: Roger Stokkedal Examiner: Helena Forslund Title: “Minimizing the risk of material shortage and waiting times via an improved order to delivery process – A study conducted within IV Produkt in Växjö” Background: Inventory Management activities have gained a relevant importance over the time in reducing uncertainties at both upstream as well as downstream levels of the supply chain, allowing a smooth material flow between chain members while responsively meeting customer demand. Control activities over the inventory represent a challenged and controversial aspect for most of today’s companies, including IV Produkt. Problem discussion: IV Produkt has, due to the rapid growth during the last ten years, fallen behind the area of inventory management as well as internal material handling process. The reason is that the company has not been able to develop these functions with the same pace as the economic growth. Consequently, the firm is facing difficulties to efficiently supply assembly lines, causing material shortage and waiting times. Research questions: RQ1: - How is the order to delivery process, from material supply functions to the Assembly line 2, at IV Produkt built up today? RQ2: - How can the order to delivery process of raw material and semi-finished products, between material supply functions and the Assembly line 2, be improved in order to minimize the risk of material shortage and waiting times? RQ3: - How can the physical storage of raw material and semi-finished products be structured within the studied area in order to support RQ2? Method: This thesis represents a descriptive case study conducted via a positivistic perspective and a deductive approach. Data was collected by interviews, observations and questionnaires, as well as via academic literature procured via a research in Linnaeus University’s library and via the use of approved web databases. Results are based on quantitative data collected from the studied company, guaranteeing the scientific credibility of the thesis. The respect of ethical principles were ensured by a discussion with company to mutually agree on the confidentiality of the presented information. Conclusion: The conclusion shows how the studied order to delivery process is built up today, highlighting several kind of waste in the current material and information flows. As a result, several actions, such as an extended use of the data system, the application of Kanban and the implementation of the ABC logic, in combination with a new proposed storage layout, were identified and proposed in order to minimize the risk of material shortage and waiting times.