Based on the evidence of the results on the previous chapter, the results were able to answer to the research questions and problem of the study, and the usefulness and usability of the results can be considered to be significant for the case company.
As the study used both qualitative and quantitative data collection and analysis methods which allowed the cross validation of the results, and which did not re-stricted the data collection and analysis in any way to achieve truthful and accurate descriptions, the validity and reliability of the results can be considered to be on a good level. In addition, as the team method was used to collect the data for the process analysis and improvement, the semi-structured interviews which were con-ducted during the process workshop and walk sessions involved always more than one person from the different roles of the process which in turn helped to increase the reliability of the results. However, ultimately, the true test of validity is con-ducted for the results of the study once the solutions have been implemented to the replenishment process and the change in the performance of the process has been monitored by using the developed process performance metrics. Hence, there might be gap between the actual results and results of the study, as now, the validity of the solutions has solely based on the calculations and estimates in order to achieve results that are reliable enough as the implementation of the solutions was not pos-sible due the limitations of the study. However, the transparency of the results was kept as high as possible throughout the study in order to increase the reliability.
In general, the constructive case study approach and the used data collection and analysis methods were suitable for this kind of study as they helped to employ a systematic framework to solve the research problem, and to understand the causal relationships between the factors which in turn helped to focus the process improve-ment actions. Hence, the used methods also helped to increase the validity of the results. In addition, the results of the study gave the case company a valuable infor-mation about the current state of the process, and the solutions and recommenda-tions which were provided in the study offers the necessary tools and acrecommenda-tions which can be used to start the journey towards the continuous process improvement.
As the solutions and recommendations of the study were used to solve very case specific problems and the purpose of the study was not to produce results that would be generalizable, the developed solutions and recommendations are not generaliza-ble to other organizations in their current form. However, due the high applicability of the dimensions of the replenishment policy matrix, the item classification frame-work itself can be applied to other organizations and business environments as the framework can be tailored to the individual needs of the organizations by adjusting the number and cutoff values between the different item classes. Hence, in addition to the implementation of the developed solutions and recommendations, the further research should study the possibility to use the developed replenishment policy ma-trix also with the case company’s items which belongs to the procure to pay process as they have similar kind of problems as with the stock transport items. In addition, once the case company becomes familiar with the use of the replenishment policy matrix, the further research should focus on expanding the demand pattern analysis of the replenishment policy matrix also to the B and C class items. Hence, it would be possible to maximize the efficiency of the inventory management and replenish-ment in the case company and get the most out of the replenishreplenish-ment policy matrix.
In addition to the previous research topics, it would also be interesting to further study the possibility to use direct deliveries from the supplying facilities to reduce the replenishment lead-time even more. In fact, if the direct deliveries could be used in the case company the replenishment lead-time would be zero as the stock transport items could be dispatched straight to the customers without transporting the items within the case company’s internal logistic processes. This in turn would allow the case company to further reduce the net working capital and waste as the inventories could be centralized to one location and the duplicate operations could be eliminated. However, in the current state of the case company, the direct deliv-eries have not been possible due the different distribution chain requirements and the organization structure which have caused the need to transfer the items between the locations. For this reason, the direct deliveries were not exploited in this study.
8 SUMMARY
This study was conducted to one of the leading power and automation technology companies operating in the after-sales service business environment. The purpose of the study was to support the long-term strategic goals of the case company by improving the current lead-time and inventory management efficiency of the re-plenishment process so that the new process lead-time and inventory level targets that were established on the divisional level of the case company could be met.
Hence, the main objective of the study was to provide a current state analysis of the replenishment process with development solutions and recommendations that could be used to improve the lead-time and inventory management efficiency of the pro-cess. In order to meet the objectives of the study, the study was divided into theo-retical and empirical research part which helped to complement each other as the theoretical part of the study provided the necessary information, tools and methods which were required to conduct the empirical part of the study successfully. Hence, the theoretical framework of the study focused on subjects such as business process modelling and documentation, business process improvement, and inventory man-agement and replenishment. As a result of the theoretical findings, understanding was gained how process documentation, analysis and improvement should be con-ducted, and what techniques and methods there are available in theory that could be used to improve the lead-time and inventory management efficiency of the process.
In the empirical research part of the study, the current state of the case company’s replenishment process was first described, measured and analyzed in order to get the in-depth understanding about the as-is state of the process and identify the root causes of the current process wastes, bottlenecks and excess inventory. As a result of the analysis, five different root causes were found which were restricting the lead-time and inventory management efficiency of the process, and three of these root causes were related to inventory management of the process and the remaining two were related to the timing and sequence of the current process operations.
In order to improve the inventory management efficiency of the replenishment pro-cess, the inventory management related root causes were addressed by developing replenishment policy matrix and new inventory management process for the stock transport items. As a result of the new guidelines of the replenishment policy ma-trix, the case company could ensure the better balance between the supply and de-mand of the items, reduce the amount of reworking and manual order processing in the STO processing operations, and align the inventory management actions more efficiently. In addition, as a result of the new inventory management process, the case company could also move towards more proactive inventory management in order to ensure the inventory management efficiency of the process also in the fu-ture, so that accumulation of the excess inventory to the process could be prevented.
In order to improve the lead-time of the replenishment process and eliminate the operations related root causes, four different recommendations were given how the STO processing could be synchronized with the MRP run in the purchasing depart-ment, and how the arrival and processing of inbound material flows could be smoothed in the goods receipt. By synchronizing the STO processing with the MRP run and smoothing the arrival and processing of the inbound material flows, the case company could process the STOs and stock transport items shipments in the purchasing department and goods receipt during the same day. This in turn would help the case company to eliminate the current variability in these operations so that the lead-time of the replenishment process could be reduced which in turn would allow the case company to increase the responsiveness of the item’s supply chain.
As a result of these improvements, the lead-time of the process could be reduced by two days and 17 days of the buyers working time could be saved by reducing the time that is currently wasted on the manual order processing. In addition, total net working capital release potential of 925 626 € could be achieved by reducing the inventory values of the stock transport items which in turn would generate total yearly savings of 166 613 € on the inventory holding costs. Thus giving the case company an opportunity to meet the new lead-time and inventory level targets, and opportunity to improve the financial profitability and efficiency of the operations.
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