Achieving Strategic Improvements by Tackling Supply Chain Uncertainty. A lead time management analysis of an automotive manufacturer
Examensarbete för masterexamen
Quality and operations management (MPQOM), MSc
Olvenmark Holmström, Ossian
The automotive value chain is changing, and with that, the role of dealerships. Traditionally, car manufacturers have sold their cars to dealerships who, in turn, have been responsible for selling the cars to, and interacting with, the end customers. However, with new direct-to-consumer business models relying on online sales, the role of the dealership has transitioned from being a sales actor to becoming an intermediary preparing the cars and performing the final handover. Consequently, the car manufacturer’s supply chain has extended to include accountability of the dealerships’ operations and the lead time resulting from these operations. Based on internal investigations, the case company has identified what it perceives as unnecessarily long lead times in the dealership part of the supply chain. Therefore, the aim of this study was to provide insights and give recommendations regarding how to cope with the lead times and operations at the dealership stage of the case company’s supply chain. Accordingly, the study intended to support the work of improving supply chain management at the case company. The methodology of the study consisted of a preliminary analysis of the lead time issue, coupled with interviewing select market representatives. Subsequently, a survey was sent out to the same markets’ dealerships to make a complete and comprehensive assessment of the situation before a final analysis, together with relevant literature, of the results, was conducted. The approach was inspired by grounded theory in that it relied on empirical data without taking a starting point in a possible explanation. The analysis of the results points to uncertainties in lead times and quality, information flow, and customer adaptation, together with a lack of standardisation and directives. In particular, supply chain uncertainty prompts a trade-off between lead time and customer satisfaction since premature handover agreements with customers may result in rescheduling and, thus, risk customer dissatisfaction. The study shows that currently, customer satisfaction is prioritised in the trade-off. To conclude, the study results in five recommendations: Reduce uncertainties by improving reliability in lead times and quality, Develop guidelines on how to handle the trade-off between lead times and customer satisfaction, Investigate the lead time consequences of customer adaptation, Introduce coherent directives across markets, and Standardise market processes.
Customer Satisfaction, Dealership, Information Flow, Lead Time, Supply Chain, Supply Chain Management, Supply Chain Uncertainty.