Supply Chain Integration as an Enabler of Inventory Positioning

Abstract

This thesis addresses the challenge of strategic inventory positioning faced by a focal firm that lacks visibility and control over its supply chain and therefore depends on integration with external suppliers to enable inventory positioning. Furthermore, due to the resources required for integration, the thesis rests on the premise that a focal firm has to prioritize which suppliers to integrate with. Conducted as a single-case study in collaboration with Company X, a global manufacturer and distributor of food and beverage packaging and processing equipment, the objective of this study was to develop a decision-support framework to evaluate and prioritize supplier integration based on feasibility, suitability, and potential utility of inventory positioning. The study follows a deductive methodology, drawing on established literature in supply chain integration and inventory positioning, and is informed by interviews, internal documents, and a survey conducted with employees at the case company. The result of the thesis is a framework that allows firms to assess suppliers across three stages: (1) feasibility of integration based on, for example, organizational, technological, and relational factors; (2) suitability of integration based on, for example, proximity and performance; and (3) utility of inventory positioning based on product-level characteristics. A small case example is presented with the framework to illustrate its implementation and practical use. In general, the framework seeks to support decision makers in identifying and ranking suppliers that are best suited for collaborative inventory positioning strategies, with the ultimate goal of contributing to greater resilience and efficiency in the supply chain.

Popular Abstract

Prioritizing the Right Suppliers for an Efficient & Resilient Supply Chain

What if your supply chain could tell you which suppliers are worth building closer relationships with? In a world where spare parts need to be delivered faster and more reliably than ever, choosing the right suppliers to collaborate with can make or break a company’s operations. This thesis presents a practical method to help companies make that choice.

How do you ensure reliable deliveries when your products come from a myriad of different suppliers and you don’t have visibility or control of their operations? This was the challenge faced by a global company in the food and beverage packaging and processing industry. Together with this company, we developed a framework to identify with which suppliers it is more important to integrate. For companies such as the case company that lack the visibility and control of their supply chain, integration is a necessary first step before it is possible to better position inventory. This can lead to reduced holding costs and grant more control over lead times and risk within the supply chain.

The problem is more complex than it might seem. Not all suppliers are ready or willing to collaborate closely and integration costs time and money. Companies therefore need a way to focus their efforts on the suppliers where collaboration will actually make a difference. That’s what this framework enables: it evaluates each supplier based on how feasible integration is, how beneficial it would be, and how much value could be gained by strategically placing the inventory from that supplier.

The framework is based on both academic literature and real-world insights from interviews, internal documents, and a survey at the case company. It turns a wide range of factors, such as supplier reliability, product demand, lead times, and technical compatibility, into a clear numerical score. This score helps companies prioritize which suppliers to work with more closely to enable inventory positioning, resulting in a more resilient and efficient supply chain.

Although developed for one company, the framework is designed to be general enough to be used by other firms facing similar challenges, particularly those that act as distributors and depend heavily on external suppliers. Tools such as the framework developed in this thesis are increasingly critical for companies wanting to stay competitive as supply chains continue facing disruptions.

• author: Thyselius, Nils and Berggren, Marcus
• supervisor: Danja Sonntag
• organization: Department of Mechanical Engineering Sciences; Production Management
• course: MIOM05 20251
• year: 2025
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: Inventory Positioning Supply Chain Integration Supplier Evaluation
• other publication id: 25/5313
• language: English
• id: 9198088
• date added to LUP: 2025-06-17 16:42:09
• date last changed: 2025-06-17 16:42:09