Supply Chain Analysis at Swedish Match, South Africa - Complemented with an ISO 9000 evaluation

Abstract: Swedish Match is a global Group of companies with a broad assortment of market-leading brands in smokeless tobacco products, cigars, pipe tobacco and lights products. The South African organization comprises of three individual companies that were acquired between 1999 and 2001. This thesis was focused on two of these three companies, Leonard Dingler and Best Blend with pipe tobacco as the most important product. Leonard Dingler is contributing with more than half of the total annual sales in South Africa. Leonard Dingler contains the main manufacturing unit and head offices at the premises. The purpose of this thesis was to create an overall measurement of Leonard Dingler’s and Best Blend’s Supply chain performance. Purchasing, production, distribution, and integration between each department were evaluated to create an overview of the organizational performance. It became evident during the progress of the study that some functions were intangible and an overall performance wasn’t measurable. The study was therefore complemented with an ISO-9000 approach and how such an approach would impact involved processes, functions, and departments. This thesis also contained two sub-objectives that needed to be accomplished: Problematic areas were to be found and future organizational recommendations were to be suggested. The study was performed and results were based on interviews with involved personnel and various affiliates, observations of day-to-day activities, and data collection. These empirical findings were analyzed through usage and comparison with the theoretical framework that was obtained from literature, articles, electronic sources, etc. Focus of the study was put on four areas of the supply chain: Purchasing, production, distribution, and integration between these departments. It became evident that several of the processes within these departments totally lacked a structured approach. Documentation, work procedures, and policies were non-existing within purchasing which impacted outcomes accordingly. Production was managed through a structured methodology and the results and improvements within this department were more than satisfying. Distribution was outsourced to a third-party logistical company which provided the core company with monthly reports. Integration was a process that wasn’t emphasized and focus should be put on this area to enhance interaction between involved personnel. The outcomes of the study were almost in line with the set objectives. An overall picture was created, problematic areas were found, and recommendations were proposed. But an overall performance analysis wasn’t accomplishable since several processes within the supply chain didn’t provide measurable or accurate data. Future recommendations were discussed with top management in order to design achievable suggestions that can be used for future improvements. These proposals can and should be used as guidelines to continuously improve the organizations activities and processes. These recommendations can hopefully enhance the overall performance of the organization.