Measuring the Delivery Precision at Holmen Paper
Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
This thesis aims to evaluate measurement techniques for delivery precision at Holmen Paper (HP). Delivery precision is an important KPI for a business, because it gives an indication of how well the company’s supply chain is performing. At HP, the Operation and Logistics division, wants to use the result to assess that if they are doing a good job planning HP’s production and transportation.
The purpose of the thesis:
“The purpose of the thesis is to determine how the KPI delivery precision ought to be measured for various order types in Holmen Paper’s supply chain.”
A great deal of literature was initially reviewed on the subject of delivery precision, and different sources suggested alternative ways in which it may be determined. To understand the logistics and information flow, two flow-charts where constructed. This was done in order to obtain a holistic overview of HP’s order-delivery process, and furthermore, to see where the required data could be retrieved from the system.
After evaluating the supply chain, it was concluded that the SCOR models’ pre-defined Key Performance Indicator Perfect Order Fulfillment (POF) and Perfect Order Index (POI), were the best way to measure the delivery precision. Both theories are well known in the logistics sector and both are built upon lower level metrics. The metrics measure if an order is delivered satisfactorily to a customer, according the parameters of time, quantity, quality and documentation. The thesis, however, rejected the parameter of documentation in dialogue with HP (and because the parameter has little to do with the operators work at Operation and Logistics).
Data was collected from HP’s database in an attempt to measure the delivery precision according to both the theories. However, it was concluded that the calculated value was unreliable. This was mainly due to fact that the data required did not exist, and the data that did exist was not reliable. The data was seen as unreliable because there was no information of when the data was collected along the supply chain. Therefore, the thesis presents a model that will help HP implement the KPI delivery precision in the future.
At the completion of the study, it was concluded that HP, initially, needs to implement a system to save data regarding the reason and source of order modifications. Additionally, it is suggested that HP should try to measure the delivery precision as close to the customer as possible. Currently, the data required to do this does not exist. To obtain this data, HP needs to implement some sort of receipt when the customer receives the goods.
Place, publisher, year, edition, pages
2012. , 87 p.
Logistics, Supply Chain, SCOR, KPI, POI
Engineering and Technology
IdentifiersURN: urn:nbn:se:liu:diva-81354ISRN: LiU-ITN-TEK-A--12/048--SEOAI: oai:DiVA.org:liu-81354DiVA: diva2:551919
Subject / course
Master of Science in Communication and Transport Engineering
Engevall, Stefan, Tekn.Dr, Univ. Lektor
Persson, Fredrik, Univ. Lektor