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Improving spare parts supply chain management at Kverneland Group

Seitz, Björn Ingo
Master thesis
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http://hdl.handle.net/11250/195541
Utgivelsesdato
2013
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Samlinger
  • Master Thesis [4657]
Sammendrag
The top management of the Kverneland Group, a Norwegian MNC which develops,

produces and distributes agricultural machinery, wants to improve the performance of its

spare parts supply chain and considers making some adjustments of its current purchasing

strategy. In the present setting, all spare parts which are needed at the central warehouse are

ordered from the Kverneland factories which developed the machines to which the

respective parts belong. However, since most of the spare parts are not manufactured inhouse

by Kverneland factories but produced externally, the factories usually have to order

the required parts from external suppliers on behalf of the warehouse. According to the

proposed future purchasing strategy, the warehouse would order the parts directly from the

external suppliers and they would also be delivered directly to the warehouse. Against this

background, this thesis analyzes possible consequences of a change from the current to the

future setting for the Kverneland Group, the Business Area After Sales and the Kverneland

factories. The proposed purchasing strategy would especially affect the administrative

ordering and physical order handling activities which are currently executed by the factories

on behalf of the warehouse. Furthermore, the future setting would affect the total lead times

of spare parts which have a high influence on the stock levels and the capital tied up in

inventory at the central warehouse. The main purpose of this study is to find out if

Kverneland should stay with its current setting of sourcing spare parts or if the group should

implement the proposed purchasing strategy. At the end of this thesis, main conclusions and

recommendations are drawn which can be used as guidelines for the implementation of the

proposed purchasing strategy. Furthermore, this study discusses which compensation fees

the warehouse should pay towards the factories if the future setting would be realized.

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