Managing the bi-directional flow of materials to increase customer satisfaction and reduce cost : A case study at Sandvik Mining and Rock Technology

Abstract: Purpose: This thesis explores the bi-directional flows of material perceived by manufacturing firms in the supply chain and accordingly derive suggestions to properly manage these flows to increase customer satisfaction and reduce cost. Methods: A literature review was summarized in a conceptual framework. This framework was then illustrated in a case. In this case, 11 semi-structured interviews, 3 participant observations and 3 types of archival records were collected. Analysis and discussion of the preliminary conceptual framework compared to the case was the basis for the modified conceptual framework that was designed. Main findings: In general material flows downstream the supply chain, but because of quality issues, recycling or returns material need to flow upstream the supply chain. This thesis provides a holistic view of how to manage these flows with a modified conceptual framework. Academic contributions: Previously, almost no academic research has been conducted on decision variables when it comes to managing material flows upstream the supply chain. This thesis contributes to closing this gap by suggesting different actions to properly manage the bi-directional flow of material. Furthermore, previous research addressing how to manage material flows has been re-accessed and expanded. Managerial implications: By using the framework, practitioners can determine helpful activities to increase customer satisfaction and reduce cost. This means management gets directions of where to allocate their resources. Limitations: The perspective and evidence in this research are only collected from the manufacturer’s point of view, valuable insight from suppliers and customers may have been overlooked. The suggestions of how to manage the bi-directional flow of materials have not been tested and the outcome of these recommendations has not been compared to KPIs or other measurements.