| dc.description.abstract | Purpose Engineer-to-Order supply chains are known to consist complex networks with numerous suppliers in different roles that may have high impact on the operational excellence of an ETO company and their competitive advantages. Therefore, supplier delivery performance is widely recognized as a critical challenge among ETO companies. This thesis contributes in delivery performance management research by studying how an ETO company may manage their procurement processes in order to improve their suppliers delivery performance. The underlying problem of the thesis emerges from high uncertainty and variability inside the supply chain which is evident for ETO companies.
Research design This thesis approaches supplier delivery performance by trying to identify the costs associated with supplier untimeliness due to the delivery variance, the causes of untimeliness and process variability and to eliminate the sources of variability and causes of untimeliness in supplier s order fulfillment process. The thesis is conducted by using a case company in a single case study. The case study consists of a data analysis on supplier delivery data, interviews and a supplier development project on delivery variance reduction that provide the required information for the improvement suggestions and discussion in the end of this thesis.
Findings ETO companies should emphasize the importance of supplier development and control on supplier process times in order to improve suppliers delivery performance. This is particularly important with strategically important suppliers that are considered as partners instead of replaceable suppliers. Furthermore, increased and more effective communication between buyer, supplier and third parties is also found as a central improvement area when trying to reduce the delivery variance. Finally, since the delivery performance should be measured financially, this thesis suggests a new performance indicator that considers supplier s statistical delivery variability and provides an expected cost for untimeliness.
Research limitations Most significant limitations were found in discussion on delivery variance reduction that is purely based on single supplier performance and the results may be somewhat exceptional and cannot be used directly with other suppliers. Also, the suggested KPI can be considered to be limited due to its complexity when calculating the estimated cost of supplier untimeliness.
Keywords Engineer-to-Order, supplier delivery performance, supplier development, cost of delivery untimeliness | |
