Producing on Real Demand - In a High Efficient Industry

Title: Producing on Real Demand – In a High Efficient Industry Authors: Johanna Eckerwall and Andreas Johnsson Tutors: Jens Hultman -Assistant Professor, Department of Business Administration,Lund School of Economics and Management Aki Matsuzaki-Business Control Manager, Supply Chain Division, Tetra Pak Japan Bertil Nilsson-Adjunct Assistant Professor, Department of Industrial Management and Logistics, Lund Institute of Technology Background: The production philosophy at Tetra Pak Japan is make-to-order. Although, inreality it is more make-to-stock due to the current pricing structure based on discounts for large volume orders. As a result, the inventory levels are high and the responsiveness towards customer demand is limited. Alongside, the marketplace is changing and the competition is increasing. This calls for a change in the supply chain structure. The question is whether it is possible to find a balance between bringing value to the customers and to Tetra Pak Japan. Purpose: The purpose of this master’s thesis is to explore the possibilities of combining cost efficiency with responsiveness towards customer demands. This balance will be investigated through co-printing on real demand. Method: The process has involved continuous movement between the empirical world and the theoretical world. The systematic combining enabled the search for additional information when it was required for further development of hypothesises. The thesis is based on quantitative and qualitative data. The data has been collected using a triangular search of interviews, observations and secondary sources. Conclusions: The thesis concludes that co-printing on real demand in combination with multicolour printing will lead to 34 % reduction in the minimum order size for customers and 61 % reduction of the finished goods inventories. The Total Value Metrics is used as a framework to identify the value that this solution will bring to the customer. The customers will benefit in terms of smaller order sizes, more colourful designs and a supply chain that responds quicker to changes on the marketplace. The proposal of changing the supply chain structure opens up for the desired balance between cost efficiency and responsiveness towards customer demands