BILTEMA : Case study to locate the future Customer DistributionCentre and create a material management to handle ecommerce

Abstract: Background: Before BILTEMA’s decision-making in investing in e-commerce, many questions have to be answered such as market demand, expansion and other decisions, appropriate for the company’s existing operations and strategies. The importance of selecting warehouse location has the theoretical goal of profit and to support the overall business strategy of the firm.   Some of the most suitable warehouse locations in Sweden are Halmstad, Linköping, Jönköping and Örebro. Besides warehouse localisation, material management is an important part to consider regarding the establishment of e-commerce and a new Customer Distribution Centre (CDC). The material management can be planned and outlined in different ways depending on the nature of the company.   Purpose: The purpose is to find a suitable location in Sweden to establish a Customer Distribution Centre, for BILTEMA. The second purpose is to create the material management for the future Customer Distribution Centre for BILTEMA.   Method: The thesis is based on a qualitative and quantitative case study through semi-structured interviews, direct observations and benchmarking. Interviews with BILTEMA’s different management levels were made in the company’s headquarter. The authors also visited different department stores in order to gain an overall view of the company’s major sales channel and knowledge of the product range. Empirical data has been gathered from the chosen regions’ municipalities and government statistics to find a suitable warehouse location. Benchmarking at IKEA CDC in Torsvik was executed and gathered create a suitable material management for the company’s future CDC.   Conclusion: The authors deemed the expansion and the secured supply strategy equally important for BILTEMA’s future e-commerce orientation. A point system was developed in order to create a basis for decision-making. The conducted points indicated Örebro as the most suitable CDC location for BILTEMA, regarding opportunity for expansion, accessibility, as well as being located closest to the centre of gravity of all Nordic countries’ inhabitants. Furthermore our suggestion for BILTEMA’s material management plan consists of receiving, storage, order-picking and packaging. BILTEMA should not invest in an automated system and should mainly perform manual material handling, due to current insufficient demand for e-commerce orders in general.