Improving Delivery Performance Through Distribution Process Redesign - A Case Study at ASSA ABLOY Entrance Systems

Abstract

The order-to-delivery (OTD) process for a specific product group at ASSA ABLOY Entrance Systems (AAES) has been underperforming lately and failing to meet changing customer expectations, especially regarding reliability and speed. The current process configuration has been assessed as outdated and inadequate for efficient distribution of the product. Since the OTD process was configured, supply chain management and distribution have evolved. The development can be explained by technological advances, general macroenvironmental trends, and the COVID-19 pandemic, for instance.

This thesis aims to address the performance-related issues of the OTD process by identifying the main causes of the low delivery performance and present proposals to solve them, ultimately resulting in improved delivery performance. It is done through a case study with a four-stage approach at AAES, combining empirical data gathered at the company with a theoretical background containing relevant fields within supply chain management. The analysis is enabled by a thorough mapping of the current state of the OTD process, providing the necessary knowledge.

In the analysis, nine main causes of low delivery performance are identified. These are related to strategy, supply chain integration, information sharing, and reliability to name a few. With a focus group containing practitioners at the company, together with the empirical data and theoretical background, six improvement proposals are presented related to strategy improvements, enhanced reliability, a new governance structure, improved IT infrastructure, enhanced performance measurement, and a new planning concept. The improvement proposals together form a road map for moving from the current state to a future state with improved delivery performance in terms of reliability and speed.

The thesis can provide insights into how delivery performance at a global, industrial company can be improved. The improvement proposals could be relevant for other similar companies and serve as inspiration. Future research could focus on the implementation of proposed improvements to provide a more thorough understanding of the factors influencing the success of such supply chain transformations.

Contribution: This thesis has been a complete elaboration between the two authors. Each author has been involved in every part of the process and contributed equally.

Popular Abstract

Distribution has undergone major changes in recent years and the pressure from customers on efficient services has increased. From having been seen as a costly necessity, it is now seen a means of achieving a competitive advantage. This article summarizes how ASSA ABLOY Entrance Systems, a global leader in entrance solutions, can redesign its order-to-delivery (OTD) process and improve delivery performance.

ASSA ABLOY Entrance Systems has experienced good economic growth much due to acquisitions. That has broadened the product portfolio and increased turnover, but also lead to challenges mainly related to alignment and finding synergies between acquired businesses. The production is widely spread across Europe, leading to challenges to coordinate material flows. The company identified low delivery performance and therefore, a thorough analysis of the OTD process was conducted. It identified several issues assessed to negatively affect the performance in terms of reliability and speed. They were related to the physical setup, strategy, reliability, silo-thinking, IT-setup, planning, communication, and performance measurement. To address these challenges, strategic improvement proposals have been identified in the following areas:

● Strategy
● Governance
● IT-setup improvements
● Performance measurement
● Enhanced planning

Firstly, a broadened strategic scope which is aligned with corporate strategy and focuses more on customer experience is supposed to guide all decisions at the different levels of the OTD process. That will lead to alignment and unity across the chain.

Secondly, a new governance structure is required to enable management and improvement of the process. It will be a cross-functional team with stakeholders from different parts of the OTD process. It will follow-up and act on deviations.

The third improvement is related to the IT-setup at the company, which is currently fragmented and contains many different, incompatible systems. A compatible setup would enable information sharing, integration and visibility required to support the OTD process and enable good delivery performance.

Further, improved performance measurement will increase the knowledge of the process. What is not measured cannot be managed. It is therefore important to measure relevant activities to identify deviations and strive towards continuous improvement.

Lastly, all priorly presented improvements will enable the planning concept to be redesigned, containing smaller buffers, and utilizing data to plan last-mile deliveries. By implementing the presented improvements, the company has the potential to significantly increase delivery performance, instantly and for the future.

This popular article is derived from the master’s thesis:
Improving Delivery Performance Through Distribution Process Redesign - A Case Study at ASSA ABLOY Entrance Systems, written by Isak Idoff & Johannes Petersson (2024).

• author: Petersson, Johannes and Idoff, Isak
• supervisor: Victoria Ahlqvist
• organization: Production Management; Engineering Logistics
• course: MTTM05 20241
• year: 2024
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: Delivery Performance, Order-to-Delivery Process, Supply Chain Redesign, Supply Chain Integration, Performance Measurement
• other publication id: 6017
• language: English
• id: 9162420
• date added to LUP: 2024-09-04 13:54:33
• date last changed: 2024-09-04 13:54:33