Supply chain planning: the application of information in market decisions
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Whitefish companies conducting traditional fishing at sea operate in a complex and demanding environment. They depend on harvesting natural resources that fluctuate by day and season. This brings along high uncertainty related to the sourced raw material for whitefish producers. Additionally, whitefish companies also face uncertainty related to the demand of their products. End-consumers are becoming more demanding, requiring a wider product selection and more customized products, and large retail chains have gained increased bargaining power. This enables them to easily change suppliers, which creates uncertainty for the whitefish processors predicted market demand. Furthermore, limited information sharing between Norwegian fishing vessels and whitefish processors hampers the coordination between a processors production department and sales department. This again makes it difficult for the production department to communicate what products the sales department can offer customers. These factors altogether pose a challenge to the planning and decision making in a whitefish company, making it difficult for them to plan towards meeting customer needs. Increased availability of information about the different supply chain processes is identified as a possible solution to this problem. This thesis therefore wishes to explore how the availability of information may be increased for market-related decision making. Tactical planning is identified as advantageous to account for seasonality and uncertainty, both of which are relevant to actors in the whitefish industry. The focus of this thesis will therefore lie within this planning horizon. The problem statement is as follows: With regards to the challenging environment that whitefish processors face, what role can information play in improving the tactical market planning? To answer the problem statement, a theoretical and empirical study is conducted. The theoretical study is twofold. First the theme of tactical supply chain planning is examined. Tactical supply chain planning is defined, and typical tactical planning activities and planning decisions are identified. Then, literature related to information availability is studied, wherein a theoretical classification for information is presented. Information can be sorted into two main groups: product information and market information. Each of these groups contains several information categories. The product information group consists of the categories product, process, resource and inventory information, while the market group consists of forecast and schedule and order information. The literature study finishes off by presenting a conceptual framework, linking the two main themes studied, namely tactical planning and information, together. The empirical study is conducted with the literature study as basis. In the empirical study, the market-related decision making at the case company is presented. A total of eight market-related decisions are identified, whereof five are chosen to be analyzed in depth. With the available market and production information identified as a basis, it is analyzed and presented which information that is used in of five the market-related decisions. The information categories found to be used most frequently in the case company s market-related decisions were forecast and schedule information and product information. The former category includes information regarding historical data on demand, as well as export and import statistics on whitefish products. The latter category includes predicted raw material volume and product type. This shows that the market-related decision making at the case company depends on demand-related information, in addition to product related information. The information category used the least was process information. This was not anticipated, as production and distribution lead times information seem crucial for fresh fish producers. Several aspects of the information use are identified. First, the basis for forecast and schedule information is found to be suboptimal, causing ripple effects for the other planning processes in the firm, which depend upon the demand forecasts. Second, a short tactical planning horizon for the case company s planning of campaigns is identified. It is believed that the company can benefit from obtaining a longer planning horizon. Third, the gathering of the information used in the company s tactical market planning shows signs of being unstructured. The information exists in various formats, and some of it is intrinsic at a few decision makers. This is also discussed as a reason for why process information is used to such a small degree. It is suggested to solve the identified challenges by introducing a system for decision support, preferably in the form of an IT system. A performance dashboard is given as an example of a solution. This is a system that gathers and visualizes the necessary information for market-related decisions, and that increases the availability of information to decision makers. The expected result is improved tactical decision making towards the market.