Customer Integrated Transport – Evaluating a New Transport Solution at Tetra Pak Korea

University essay from Lunds universitet/Företagsekonomiska institutionen

Abstract: Globalization increases competition between companies and competitive advantage is becoming more and more important. Global trends such as international trade, overseas production and increased consumption have led to that freight transport volumes have grown strongly over the past decades. As the global warming debate intensifies, increased costs and stricter regulations on CO2 emissions are introduced in the transport sector. Customer Integrated Transport (CIT) is a concept in which two companies integrate their transport used in distribution. This concept is unexplored and there is little proof for that it is of commercial and environmental interest. The definition of CIT used during the performed study explains the basics of the concept: Customer Integrated Transport is when a company offers its customer(s) the possibility to integrate its distribution process with the distribution process of the supplier by using the same truck for both (the customer's) inbound and outbound transports. The desired benefits of using CIT are multiple. The supplier aims to improve their value proposition to their customer as to achieve competitive advantage. As the total distance travelled by trucks is decreased, cost savings and reduced CO2 emission could be attained. The concept CIT has not been studied in the exact form as described above, and therefor the purpose of the study was To increase knowledge about the concept Customer Integrated Transport. The study was performed as a case study at Tetra Pak ́s Market Company in South Korea, and therefore one need to take Korean culture and transport regulations in to consideration when interpreting the results. The multinational food processing company Tetra Pak was the main provider of information and data used in the case study. Therefore, its corporate culture as well as the industry that Tetra Pak operates in should also be understood. The study showed that CIT could save money and that it has strategic benefits. It also indicated that companies often consider environmental aspects when choosing transport solution, only if these are related to financial savings. The study identified several practical obstacles that need to be overcome when integrating two transport processes in such a way as CIT suggests. It was concluded that these are manageable, however related costs should be evaluated in future studies. As the basis of transport is similar globally, CIT would in theory be interesting anywhere in the world. Several of the advantages related to CIT, such as improved value proposition and saving cost, are aspects interesting for companies independent of nation or industry. CIT is further aligned with many of the pushing trends within supply chain and transport, such as reducing CO2 emissions. However, many things that were observed as important factors for the success of CIT in this case, such as for example the importance of financial incentives related to environment, are believed to vary between countries and cultures. Information sharing was observed to be an important aspect to consider when stretching outside a company’s boundaries, as CIT does. This finding is considered to apply to many situations, even concerning cooperation and integration not related to transport.

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