Digitalisation of sourcing processes – A case study at Axis Communications AB

Abstract: Title: Digitalisation of sourcing processes – A case study at Axis Communications Authors: Elaine Nilsson & Josefine Westberg Supervisor: Karin Forsberg, Commodity Manager, Axis Communications AB Daisy Wang, Project Purchaser, Axis Communications AB Louise Bildsten, Department of Industrial Management & Logistics, Faculty of Engineering, Lund University Examiner: Jan Olhager, Department of Industrial Management & Logistics, Faculty of Engineering, Lund University Background: Axis Communications AB is a global network surveillance company based in Lund, Sweden. Axis assemble and store some components and products in their own facilities, however manufacturing is handled by contract manufacturers. It is Axis sourcing department that are responsible for establishing and maintaining relationships with these contract manufacturers, as well as suppliers. The sourcing department is currently working towards world class commodity management, which is a strategic approach to maximise the supplier's contribution and drive development of the company. One step towards reaching world class commodity management is to increase efficiency. This can be accomplished by integrating digital technologies such as Big Data analytics and cloud storage within processes. Digitalisation can improve procurement results through reduced costs and increased efficiency and transparency. Problem formulation: In order to maintain supplier relationships and optimize the supplier database many processes and tasks are performed. Some of these activities include non-value adding and time-consuming work. These activities will be identified, and possible digitalisation technologies investigated, with the aim of increasing efficiency and effectiveness. The thesis is finalised with an investigation of implementation possibilities, including how easy the technologies will be to implement and their impact. Purpose: The purpose of this study is to investigate the current sourcing processes at Axis Communications AB in order to identify digitalisation opportunities, digitalisation technologies and their impact and implementation effort. Methodology: Initially a combination of descriptive and exploratory research purpose was used to identify problems, thereafter the study became problem solving in order to find a solution for these problems. The approach throughout the thesis was primarily qualitative, however quantitative data was used to strengthen some findings. Firstly, a literature review on sourcing, digitalisation and process change was conducted. A single case study was then performed. Interviews were held with employees at Axis in order to get an understanding of the current sourcing processes. A small-scale survey was performed to ensure the validity of the interviews and to analyse the identified processes. Data on systems and technologies were gathered through system providers and documents. The empirical data was then analysed with models and frameworks from the literature review. Conclusion: The result of the thesis lay a foundation for future digitalisation within the company. Digitalisation technologies and systems were found for several sourcing processes, with the aim to increase efficiency. Each process and the suitable technology were divided into projects, which were analysed based on impact and ease of implementation. Based on this a course of action for further investigation was recommended. Digitalising the identified processes will eliminate the non-value adding work currently spent on them and facilitate strategic decision making.