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Evaluating distribution centers in a global supply chain: a case study at Cargotec Sweden, MacGREGOR Cranes
2010 (English)Independent thesis Advanced level (professional degree), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

This thesis has been carried out at Cargotec Sweden, MacGregor Cranes who manufactures marine cargo cranes at production partners in China and South Korea. MacGregor Cranes source components to their production partners from both European and Asian suppliers. MacGregor Cranes has implemented a distribution center in Germany. Today when the production has increased five folded, the amount of Asian suppliers has increased and many European suppliers have chosen to shift some production to China or South Korea. This has led MacGregor Cranes to reconsider if a distribution center in Asia could decrease the costs and increase the Supply Chain efficiency. Therefore the purpose of this thesis is to evaluate MacGregor Cranes current Supply Chain by mapping it and measuring performance metrics. A Supply Chain with focus on a distribution center in Asia will be evaluated and then compared against the existing Supply Chain. Literature was collected about Supply Chain Management, Supply Chain strategies, ways to evaluate a Supply Chain and a distribution centers role in a Supply Chain. This literature search resulted in a theoretical frame of references which thereafter were used as guidance when collecting the empirical data and when performing the analysis. MacGregor Cranes Supply Chain was mapped and quantitative data about the Supply Chain was collected from the enterprise resource planning system SAP R/3. Interviews were conducted in order to gather information about MacGregor Cranes Supply Chain strategy and how they graded the importance of different attributes. Primary and secondary information were collected about how other Nordic companies had managed their distribution center in China. The analysis of the empirical data revealed that the main advantages with the current distribution center is that sea freight can be utilized for a large share of the components sourced in Europe and that MacGregor Cranes has a good Supply Chain flexibility since they are able to hold and stock components from Europe that not is needed in the production. The disadvantage is that MacGregor Cranes is relying on their Asian suppliers to store components and some suppliers have limited storage capacities in terms of space and a lack of systematic methods to monitor the stock levels. The evaluation of the current Supply Chain let the authors to recommend alternatives for how a Supply Chain with a distribution center in China could be set up. This resulted in the recommendations that MacGregor Cranes in the short term, 1-2 year, should continue to work towards increasing the amount of suppliers in Asia before implementing a distribution center in China. The authors recommend MacGregor Cranes to develop the relationship between the suppliers located in Asia with the main objective to use suppliers as stock keeping units. A long term recommendation, 2 years or more, is to set up a distribution center in China to supply components for all production partners. A Vendor Managed Inventory, VMI, concept for selected components should be implemented at the distribution center, which would give MacGregor Cranes an opportunity to handle the duality of cost minimization and maintaining a high service level.

Place, publisher, year, edition, pages
Keyword [en]
Technology, Supply Chain Management, Performance Measurement, Distribution centers, Evaluating Supply Chains, Outsourcing, Asia
Keyword [sv]
URN: urn:nbn:se:ltu:diva-59190ISRN: LTU-EX--10/013--SELocal ID: fb792e11-13a8-4bf9-8605-d6b49c5812c2OAI: diva2:1032578
Subject / course
Student thesis, at least 30 credits
Educational program
Industrial and Management Engineering, master's level
Validerat; 20101217 (root)Available from: 2016-10-04 Created: 2016-10-04Bibliographically approved

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