Managing Demand Fluctuations: Distribution Strategies as Risk Mitigation Tools An analysis of a case company’s current risk mitigation strategies and two logistics postponement strategies
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Typ
Examensarbete för masterexamen
Master's Thesis
Master's Thesis
Program
Supply chain management (MPSCM), MSc
Publicerad
2023
Författare
Byberg, Cecilia
Nylander, Maximilian
Modellbyggare
Tidskriftstitel
ISSN
Volymtitel
Utgivare
Sammanfattning
Currently, the retail sector is experiencing fluctuating markets with high demand volatility and
demand uncertainty. Therefore, companies within this sector need to implement distribution
strategies which are tailored to dealing with mitigating the risks of demand volatility and
uncertainty without incurring too much costs, which may negatively affect operations or
compromise customer service levels.
In order to conduct this thesis and answer our research questions, we utilized a qualitative
research method which included interviews and a literature review. The thesis entails an
analysis of a case company’s current risk mitigation strategies and two logistics
postponement strategies tailored to the case company. Their current risk mitigation strategies
include an omni channel and balancing inventory through lateral shipments. The analysis was
based on benefits and limitations related to dealing with demand volatility and uncertainty.
Furthermore, complementary operational, based on a scenario planning analysis, and
strategic considerations of the two logistics postponement strategies are discussed.
In conclusion, the masterhouse strategy shows great robustness in dealing with demand
volatility and uncertainty with centralizing safety stock closely lagging behind. However,
further investigation of the centralizing safety stock strategy is recommended due to the
associated lower implementation costs and scale. Additionally, expanding omni channel
integration in conjunction with the centralizing safety stock will allow for enhanced operational
efficiency and increased customer service.
However, if the case company decides to remain their decentralized set up, further integration
and optimization of the omni channel and balancing inventories need to take place. Both their
current strategies respectively deal with demand uncertainty and volatility in various ways,
however, there are relevant limitations such as navigating compliances and regulations and
lacking technical capabilities.
Beskrivning
Ämne/nyckelord
Distribution Strategy , Omni channel , Balancing inventory , Logistics postponement , Centralization