Supply base reduction – development and application of a possible reduction process
Schönau, Jennifer (2018)
Pro gradu -tutkielma
2018
School of Business and Management, Kauppatieteet
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Julkaisun pysyvä osoite on
http://urn.fi/URN:NBN:fi-fe2018080633409
http://urn.fi/URN:NBN:fi-fe2018080633409
Tiivistelmä
With the increased importance of the purchasing department, supply management has evolved into a strategic function that has an important stake at the company’s success. For an efficient purchasing department, the supply base needs to be managed carefully and wisely and thus, many companies have concluded to keep the supply base small but qualitative. Thus, the term supply base reduction has increased its awareness in the past years. This study aims to create a supply base reduction process for the case company Schuler Pressen GmbH.
Schuler Pressen GmbH is a high-quality press manufacturer and the industry leader. Currently, the company is facing a too large supply base with the associated disadvantages, like high administrative cost and an unclear structure. Consequently, Schuler Pressen GmbH tries to reduce its supply base in an efficient way but struggles in finding a solution. The purpose of this master thesis is hence to create a process guideline that explores the possibility of a supply base reduction based on the example of one sub commodity group. As only few suppliers control 80 percent of the total purchasing volume and value, many listed suppliers only deliver low values and volumes and thus, there is a chance of improving the situation. The chance of reducing the supply base offers advantages, among others a restructuring of the supply base, so that the purchasing department can work in a more efficient way. Moreover, cost and quality advantages can be realised.
This case study consists of a critical literature review, a group discussion and interviews as well as data gathering via the ERP system of the case company. The process guideline was developed with the help of the above-mentioned parts and then applied to a sub commodity group to visualise a possible reduction process. Finally, a possible supply base reduction of approximately 14 percent has been detected, offering the case company the opportunity to cut its supply base down. Moreover, top-performing suppliers have been identified and categorised.
Schuler Pressen GmbH is a high-quality press manufacturer and the industry leader. Currently, the company is facing a too large supply base with the associated disadvantages, like high administrative cost and an unclear structure. Consequently, Schuler Pressen GmbH tries to reduce its supply base in an efficient way but struggles in finding a solution. The purpose of this master thesis is hence to create a process guideline that explores the possibility of a supply base reduction based on the example of one sub commodity group. As only few suppliers control 80 percent of the total purchasing volume and value, many listed suppliers only deliver low values and volumes and thus, there is a chance of improving the situation. The chance of reducing the supply base offers advantages, among others a restructuring of the supply base, so that the purchasing department can work in a more efficient way. Moreover, cost and quality advantages can be realised.
This case study consists of a critical literature review, a group discussion and interviews as well as data gathering via the ERP system of the case company. The process guideline was developed with the help of the above-mentioned parts and then applied to a sub commodity group to visualise a possible reduction process. Finally, a possible supply base reduction of approximately 14 percent has been detected, offering the case company the opportunity to cut its supply base down. Moreover, top-performing suppliers have been identified and categorised.