The following thesis counteracts the relationship of Supply Chain Design (SCD) and web-sales[1], and concentrates on the overall aim of “How to re-design Supply Chains more effective when a web sales portal is applied?”. In order to clarify this aim, following four research objectives are set: How does e-commerce connect to Supply Chain Design in general? What is required for a successful implementation of e-commerce? What are the costs and benefits by implementing e-commerce? Which potential risk factors in correspondence of the implementation of             e-commerce may influence the whole SCD and e-commerce interaction process?  Previous studies have not discussed the interaction of e-commerce and supply chain design on operational level at all, which accounts for a large portion of interests these days. When looking at the research objectives they have been solved in three process steps. First of all the general connection of e-commerce and Supply Chain Design had been analysed through an extensive literature review in form of i.e. suitable books and research papers. Results demonstrated that e-commerce helps to support and manage supply chain activities by offering relevant information. The connection between e-commerce and SCD insists of a close gearing. E-commerce helps to support and manage supply chain activities by offering relevant information about what kind of product is demanded, what is available in warehouses, which products are in the manufacturing processes, and which products will enter the physical facilities and customer sites. Following, research objectives two to four had been identified for which a literature review has created a firm basis on the status quo of current research studies. Combined with findings of developing a web-sales implementation plan for a leading group in power and automation technologies this work-out has been used as empirical research on how a real life company is carrying out these objectives. This plan had been worked out on-side the company, data has been obtained through interviews, observations, and internal system data. Requirements for a successful implementation of e-commerce are seen in strategic and organisational planning activities, as well as specific platform conditions. Concerning costs and benefits, monitoring and evaluating improvements, increasing customer satisfaction, and reducing order-cycle times stay in contrast to incidental fixed and variable costs which had been demonstrated through a detailed break-even analysis. Potential risk factors which had been identified can be countervailed through an appropriate risk management. Thirdly, the overall research question of “How to re-design Supply Chains more effective when a web sales portal is applied?” had been solved based on intermediate results of step one and two, combined with the project work-out, providing informative and sufficient data. The result is that in a first step a clear picture of which products and spare parts will be sold has to be defined. Secondly a precisely inventory management - discussing which parts to hold in stock, where to stock them, and how much to hold in stock - needs to be worked out. And thirdly, after analysing the possible and most plausible inventory strategy, possible distribution varieties need to be analysed. The most appropriate solution for the case company is represented in an Inventory-Distribution-Matrix. This research study has created a basis for the business unit of Power Electronics to improve possible efficiency. The knowledge and implementation steps operated for this implementation plan can be used for other business units in Switzerland and can be seen as a decision maker. Therefore this work-out has generated an enormous benefit for the case company. Instead of acting instinctively, decisions are based on qualitative and quantitative methodologies, data collection methods and data analysis techniques, and therefore follow a process strategy. [1]“Web-sales” in this context is associated with selling and buying information, products, or services via computer networks (Strader & Shaw, 1997), in this research study it is identical to “E-commerce”.

Inventory management policies of two independent dealers in a service parts system with transshipment is studied in this thesis. Dealers can collaborate by pooling inventory or service. Revenue is shared in transshipment, can sometimes be contrary to profit maximization of one of the parties albeit sum of profits is increased. To assess the benefits of inventory pooling under equilibrium strategies, and the effect of competition on profits, a Markov Decision Process is formulated. A simpler variant of the optimal four-index threshold policy is used to characterize the production, service and transshipment related inventory decisions. A game theoretical approach as well as notions from policy iteration is taken to find the best response policy and equilibrium policies of the dealers. Numerical study is conducted to investigate the effect of cost, revenue and demand parameters, as well as dealer asymmetricities on benefit of pooling, service levels and transshipment flows. Analysis shows that commission schemes fairly allocating transshipment value to the players, high customer traffic intensities, and low transshipment costs are most suited environments for pooling. System centralization is beneficial when the inventory holding costs are high, transshipment costs are low, customer traffic intensities are high or the commission structure is distracting a party. Competition, within the experimental settings, dampens about 45% of the benefits of pooling.

Abstract Purpose: The purpose of the study is to develop a model that will facilitate the choice of maintenance strategy within the Swedish pulp and paper industry. Without compromising system availability, the model aims to reduce inventory holding costs. Methodology: At first, a literary research was conducted to create a holistic view over the chosen topic, in time it developed into a literature framework. Secondly, a case study was conducted in order to obtain empirical data. The data were obtained through interviews and archival records. The literature framework and the empirical data were then cross-analyzed with each other. Findings: In this thesis, a model has been developed based on previously applied and accepted methods. The methods have been identified and described in order to provide a strategy in which the inventory levels- and value could be lowered. The findings indicate that the organization must seek to assign ABC-classified and VED-analyzed components different maintenance actions in order to reduce the total cost. Theoretical contribution: This thesis contributes to a methodology development regarding spare parts management. It aims to add knowledge to the existing gap regarding spare parts order point and batch size. The thesis provides a procedure in which systems including critical and expensive components are evaluated in order to assign them the appropriate maintenance. Practical relevance: The model has only been exemplified by using a system position from Stora Enso Skutskär, the numerical values are examples. The model must be tested with real values and the risk analysis must be carried out with a group of employees with great insight regarding the selected component and system position. Limitations: This thesis is delimited to spare parts management and inventory management. The study only involves one Swedish organization, whereas the organization and its spare parts management illustrates the complexity concerning spares. The model will not be verified as the focus is to highlight the research gap and to develop the model.

Purpose: The purpose of this study was to analyze possible strategies that can be used to improve the efficiency of the spare parts safety stock management in a multinational company which operates in the electronic industry. Research question: “Which safety stock dimensioning strategies are most suitable in an after-sales business environment, characterized by high level customer service and unpredictable demand?” Method: The theoretical framework illuminated the study’s phenomenon which was mainly based on peer-reviewed scientific articles but also academic books. Furthermore, the empirical data collection in this study was conducted through a mixed research approach, where the qualitative data was collected through three semi-structured interviews and several unstructured interviews, while the quantitative data consisted of calculations using numerical variables provided by the case company. Conclusion: The study concluded that the so called estimated safety stock method as well as the probabilistic demand based on history method are the most suitable safety stock dimensioning strategies to utilize in business environments where firms that offer products with unpredictable demand are facing challenges related to finding a balance between providing a high service level and keeping their costs as low as possible. / Syfte: Syftet med denna studie var att analysera möjliga strategier som kan användas för att förbättra säkerhetslagerhanteringen av reservdelar hos ett globalt företag inom elektronikindustrin. Frågeställning: “Vilka dimensioneringsstrategier för säkerhetslager är mest lämpliga i en eftermarknadsverksamhet, kännetecknad av hög servicenivå och oförutsägbar efterfrågan?” Metod: Det teoretiska ramverket belyste studiens fenomen som var baserad på främst expertgranskade vetenskapliga artiklar men även böcker. Vidare genomfördes den empiriska datainsamlingen i denna studie genom en mixad forskningsmetod, där den kvalitativa datan var i form av fyra semistrukturerade intervjuer samt flera ostrukturerade intervjuer, medan den kvantitativa datan bestod av beräkningar med hjälp av numeriska variabler tillhandahållna av fallföretaget. Slutsats: Studiens slutsatser visade att den så kallade manuellt bedömt säkerhetslager metoden samt probabilistisk efterfrågan baserad på historisk data metoden är de mest lämpliga dimensioneringsstrategier för säkerhetslager att använda i affärsmiljöer där företag som erbjuder produkter med oförutsägbar efterfrågan står inför utmaningar relaterade till att hitta en balans mellan att tillhandahålla en hög servicenivå och att ha så låga kostnader som möjligt.

As a result of global competition, companies within the automotive industry are required to improve their production systems to achieve sustainable and competitive production. To attain operational excellence, companies have adopted concepts like lean and World Class Manufacturing (WCM). In order to deliver, companies need to increase the availability and reliability of production equipment. This demands focus on both operational and strategic maintenance, and efficient equipment acquisition and management. The main objective of this thesis is to identify processes and success factors that are necessary for improved maintenance performance. By conducting a case study and by performing a literature review, the following has been studied: 1) how companies within the automotive industry work with maintenance and maintenance strategies, 2) implementation of maintenance strategies, and 3) new acquisition and spare parts management for maintenance.  The results show that basic maintenance concepts and related terms are well defined in the literature. However, maintenance strategy is not unanimously defined. Results from the case study reveal that Professional Maintenance (PM) within WCM has been considered as a maintenance strategy. Furthermore, driving forces and obstacles for implementing maintenance strategies have been identified. The study also reveals that there is a strong link between maintenance performance, new acquisition and spare parts management. / Den globala konkurrensen inom fordonsindustrin, har medfört krav på företag att effektivisera sina produktionssystem för att åstadkomma en hållbar och konkurrenskraftig produktion. Detta har resulterat i arbete enligt koncept som lean och World Class Manufacturing (WCM).  För att kunna leverera behöver företag öka den tekniska tillgängligheten på utrustning. Detta i sin tur ställer ett ökat krav på både operativt och strategiskt arbete med underhåll, anskaffning och reservdelsstyrning. Målet med examensarbetet är att identifiera processer och faktorer som bidrar till ett förbättrat underhåll. Med hjälp av litteraturstudie och en fallstudie har följande studerats: 1) hur företag inom fordonsindustrin arbetar med underhåll och underhållsstrategier, 2) implementering av underhållsstrategier, och 3) nyanskaffning och reservdelsstyrning för underhåll. Resultat från litteraturstudier visar att det finns en enighet om att underhåll delas in i förebyggande och avhjälpande underhåll. Däremot, visar resultatet att det inte finns en enig definition av underhållsstrategi. Fallstudien visar att Professional Maintenance (PM) inom WCM betraktas som en underhållsstrategi. Som ett resultat har även ett antal drivkrafter och svårigheter som påverkar implementering av underhållsstrategier identifierats. Vidare visar resultatet att det finns ett starkt samband mellan underhåll, nyanskaffning och reservdelsstyrning.

We consider a single-part, two-echelon supply chain problem for spare parts. The network consists of a single manufacturing plant, a set of service centers (SCs) and a set of customers. Both echelons keep spare parts using the base-stock replenishment policy. The plant behaves as an M/M/1 queueing system and has limited production and storage capacity. Demand faced by each SC follows an independent Poisson process. The problem is to determine optimal location-allocation and optimal base-stock levels at both echelons while satisfying the target service levels and customer preferences of SCs. We develop a mixed integer non-linear programming model and use cutting-plane method to optimize the inventory-location decisions. We present an exact solution procedure for the inventory stocking problem and demonstrate the limitations of using traditional inventory models like METRIC-like and Approximate in case of high utilization rates. We show the effectiveness of our proposed cutting-plane algorithm and provide important managerial insights for spare parts management.

In this thesis, two systems are analyzed in order to gain insight to the following issues: (i) Effect of incentive, subsidy and penalty designs on decentralized system, (ii) effect of using production facility as pooled capacity (pooled system) and dedicated capacity (unpooled system) on capacity utilization and system profit. Regarding the first issue, three models are defined / decentralized model, centralized model and decentralized model with incentive, subsidy, penalty designs. In all models, there are two dealers and one item is under consideration and lateral transshipments are allowed. Dealers operate with four inventory level decision (strategies) that consists of base stock level, rationing level, transshipment request level and customer rejection level. Under the decentralized system, a dealer sets its operating strategy according to the strategy of the other dealer and maximizes its own infinite horizon discounted expected profit. In the centralized system, a central authority (say manufacturer) exists, which considers the system-wide infinite horizon discounted expected profit, and makes all decisions. Under decentralized system with incentive, subsidy, penalty designs, manufacturer tries different designs on decentralized system namely revenue sharing, holding cost subsidy, request rejection penalty, transportation cost subsidy and commission subsidy in order to v align decentralized system with centralized system. According to the results obtained, this alignment works best with nearly 40% revenue sharing percentage, low rejection penalty, high transportation cost subsidy under low transportation cost and commission subsidy under very low or very high commissions. Holding cost subsidy, on the other hand, is not a good strategy since it declines decentralized system profit. Considering the second issue, two systems are examined / pooled system and unpooled system. Both systems are centrally managed. In the pooled system, all capacity is dynamically allocated to either dealer considering maximization of system profit. In the unpooled system, capacity is shared among dealers and dealers are always allocated same percentage of the capacity. Infinite horizon average expected profit is maximized in both systems. The dealer having lower holding cost is allocated higher capacity in both pooled and unpooled system / however, exceptions exist in the unpooled system under low arrival rate. Highrevenue dealer is always allocated higher capacity in both pooled and unpooled system. Arrival rate affects both systems such that total capacity utilization increases with increasing arrival rate. From the profit point of view, pooled system has great advantage under low demand rate in general.

We consider a single-part, two-echelon supply chain problem for spare parts. The network consists of a single manufacturing plant, a set of service centers (SCs) and a set of customers. Both echelons keep spare parts using the base-stock replenishment policy. The plant behaves as an M/M/1 queueing system and has limited production and storage capacity. Demand faced by each SC follows an independent Poisson process. The problem is to determine optimal location-allocation and optimal base-stock levels at both echelons while satisfying the target service levels and customer preferences of SCs. We develop a mixed integer non-linear programming model and use cutting-plane method to optimize the inventory-location decisions. We present an exact solution procedure for the inventory stocking problem and demonstrate the limitations of using traditional inventory models like METRIC-like and Approximate in case of high utilization rates. We show the effectiveness of our proposed cutting-plane algorithm and provide important managerial insights for spare parts management.

Thesis (MEng)--Stellenbosch University, 2014. / ENGLISH ABSTRACT: Effective management of spare parts inventory is essential to companies because it influences inventory costs and asset utilization. The vast and diverse portfolio of spare parts, intermittent demand patterns and contradicting objectives between departments are examples of some of the factors that complicate Spare Parts Management (SPM). Managers of spare parts are faced with trade-off decisions between risk and cost on a daily basis. These decisions include, amongst many, determining appropriate stock levels and order frequencies. Despite the importance of SPM, decisions are however often made intuitively in practice with little factual support, and the decision-making process is commonly constrained within departmental silos. Even though there is a large body of academic knowledge on this topic, practical applications of spare parts inventory solutions lag behind theoretical studies. The majority of studies in literature focus on single components of SPM, such as demand forecasting and parts classification, whereas fewer studies consider the decision-making process itself. This study proposes a decision-making framework for spare parts inventory management. The framework is based on a wide-ranging literature review that focuses on capturing the essence of Spare Parts Management (SPM), but also acknowledges the interconnectedness of the problem. Therefore, core inventory management principles, as well as closely related topics such as Supply Chain Management (SCM) and Physical Asset Management (PAM), are studied in the context of spare parts. The broad scope of the literature study leads to a holistic approach to the problem and prevents sub-optimization. The proposed framework condenses principles from various fields of study (SCM, PAM, Classification and Inventory Management) into a stepwise methodology presented as a decision-making framework. The objective of the framework is to provide managers with a structured process, based on factual information, to enable better decision-making in the field. Furthermore, the framework aims to capture the fundamentals of SPM in a simplistic manner to ease the adoption of the framework in practice. A case study is conducted in the South African mining industry to validate the framework. The case study demonstrates that the framework is practical, provides structured guidance, and assists managers to make trade-off decisions in managing spare parts inventory. / AFRIKAANSE OPSOMMING: Effektiewe voorraadbestuur van onderdele is belangrik vir maatskappye omdat dit voorraadkoste en die benutting van bates beïnvloed. Die bestuur van onderdele is ’n komplekse probleem. Ondermeer is die portefeulje van onderdele items breed en divers, die vraagpatrone sporadies en word die voorraadvlakke geaffekteer deur kontrasterende doelwitte tussen verskillende departemente. Bestuurders van onderdele word daagliks gekonfronteer met besluite rakende risiko’s en kostes, soos om toepaslike voorraadvlakke te bepaal en om te besluit wanneer om bestellings te plaas. Hierdie besluite word dikwels intuïtief geneem met min feitelike ondersteuning en insette in die besluitnemingsproses word gereeld beperk tot sekere departemente. Ten spyte van die geweldige akademiese belang in die onderwerp, is daar min suksesvolle praktiese toepassings. Die meerderheid van studies in die literatuur fokus op spesifieke elemente van onderdele bestuur, soos vooruitskatting en klassifisering van parte, terwyl minder op die besluitnemingsproses konsentreer. Hierdie studie stel ’n besluitnemingsraamwerk vir die bestuur van onderdele voorraad voor. Die raamwerk is gegrond op ’n deeglike literatuurstudie wat die essensie van onderdele bestuur ondersoek, maar ook die interverbondenheid van die probleem in ag neem. Voorraadbestuurbeginsels en verwante onderwerpe soos Voorsieningskettingbestuur en Fisiese Batebestuur word dus bespreek. Die breë omvang van die literatuurstudie lei tot ’n holistiese benadering wat sub-optimering van die probleem voorkom. Die voorgestelde raamwerk som beginsels uit verskillende relevante studievelde op in ’n stapsgewyse metode wat voorgestel word as ’n besluitnemingsraamwerk. Die doel van die raamwerk is om bestuurders te voorsien met ’n gestruktureerde proses, gebaseer op feitelike inligting, om besluitneming in die veld te verbeter. Verder poog die raamwerk om die fundamentele konsepte in voorraadbestuur vas te vang in ’n eenvoudige manier sodat die raamwerk maklik geïmplementeer kan word in die praktyk. Die voorgestelde raamwerk is gevalideer deur middel van ’n gevallestudie in die Suid-Afrikaanse mynbedryf. Die gevallestudie toon dat die voorgestelde raamwerk prakties is, die besluitnemingsproses op ’n gestruktureerde wyse lei, en bestuurders help om beter, ingeligte besluite te neem.

Con base en el estudio del sector armamentístico, podemos definir la gestión de mantenimiento como uno de los problemas más relevantes dentro de su cadena de producción. La deficiente planificación y los errores en las entregas de pedidos a tiempo afectan en gran medida la eficacia de la empresa y su retorno de inversión. Por tal motivo, surge la necesidad de encontrar soluciones que permitan el crecimiento del sector armamentístico peruano y metalmecánico. La presente investigación propone una solución basada en las herramientas TPM y Spare Parts Management que permitirán una buena gestión del flujo de actividades de mantenimiento preventivo o correctivo, gestionar eficientemente el movimiento de los repuestos y su respectiva ubicación e inventarios en el proceso de ingreso de nuevos repuestos, eliminar los desperdicios innecesarios y controlar de manera óptima los repuestos de las máquinas. La empresa en estudio es una empresa con régimen estatal, pero con dirección privada, la cual presenta problemas en su gestión de mantenimiento, debido al exceso de paradas inesperadas y atascos, alta producción de productos no conformes y baja eficacia de producción de municiones a tiempo. Esta propuesta logró incrementar la eficacia de la producción de casquillos y balas en un 6.99% pasando de un 66.52% a 73.51%. / Based on the study of the arms sector, we can define maintenance management as one of the most relevant problems within its production chain. Poor planning and errors in order delivery on time greatly affect the efficiency of the company and its return on investment. For this reason, the need arises to find solutions that allow the growth of the Peruvian arms and metalworking sector. The present investigation proposes a solution based on the TPM and Spare Parts Management tools that will allow a good management of the flow of preventive or corrective maintenance activities, efficiently manage the movement of spare parts and their respective location and inventories in the process of entering new spare parts, eliminate unnecessary waste and optimally control machine spare parts. The company under study is a company with a state regime, but with private management, which presents problems in its maintenance management, due to the excess of unexpected stops and jams, high production of non-conforming products and low efficiency of ammunition production on time. . This proposal managed to increase the efficiency of the production of casings and bullets by 6.99%, going from 66.52% to 73.51%. / Trabajo de Suficiencia Profesional