Alternative outbound transportation moder for sony Ericsson

Abstract: Purpose:
Identify alternative to the current air transportation routes from supply units in Asia to European customers. The authors strive to provide the department of Supply Flow & Logistics with proposals of how they can reduce their costs and environmental effects connected to transportation. The authors also strive to display and evaluate the risk connected to a change in transportation mode.

Method:
A supply chain is built on many parts that interact, hence, a system approach was chosen by the authors. Since the authors did not have any knowledge of how the operational work related to the topic was conducted at Sony Ericsson, an inductive research methodology have been used. In order to maintain a high degree of credibility to the study triangulation methods were used. All literature used in the thesis has its sources in well known universities or international organizations. To be published through these universities or organizations the content is assumed to have a high level of credibility. Therefore it is believed by the authors that these sources are accurate.

Conclusions:
The authors have found alternative transportation route that can be used to send goods for Sony Ericsson. Two alternative routes were analyzed. One intermodal route from Hong Kong via Dubai to Europe and the other from Beijing along the Trans-Siberian railroad to Europe. The result from the route via Dubai showed to be more expensive and therefore was not recommended for further analysis.

The Trans-Siberian railroad route is a new upcoming route. It was implemented as a co-operation between Schenker DB and Russian Railway. An implementation of this route would expose new risks and challenges. The authors have identified and discussed risks such as delays, material shortage, order cancellations and changes, theft and business adoptions. The increased lead-time is the factor that has the larges affect on the supply chain performance.

The cost and environmental calculation for this route showed that reductions can be done on both aspects. The freight cost can be reduced by approximately 50 percent and the environmental by 70 percent. An analysis on historical order data showed that 60 full containers could have been sent during a 9 month period under 2008. In order to send customer orders along the alternative route certain criteria had to be fulfilled. The authors have identified long order lead time and orders size as the most crucial factors for shipping along the route.