In order to be competitive, one way is to focus on the internal logistics in a cost effective manner. The concept of material control covers how to control the flow of material resources from the customer to the supplier. This study intends to look at how internal material control can be done efficiently in a manufacturing company. In order to achieve an efficient internal material control, methods and approaches should be evaluated based on a situational approach. Therefore, the purpose of the study is to develop a model for analysis and improvement of internal material control in manufacturing companies. The study is a case study and has been conducted on site at Atlas Copco Tierp Works. Atlas Copco in Tierp, produces components and assembles hand-held power tools. The empirical data has been conducted with employees at Atlas Copco Tierp Works and with direct observations of the processes that the study has been limited to. Literature reviews have been made in parallel with the empirical data collection with an emphasis on internal logistics, material control and lean production. The study shows which factors that are important for an effective internal material control. Furthermore, the report presents an analysis model, which has been applied to Atlas Copco Tierp Works. The analysis model presents a recommendation on appropriate material planning method, as well as the conditions that should be complied in order to achieve an efficient internal material control. The analysis model strengths are considered as mainly to be that it covers many areas, by including the planning environment, material planning methods, efficiency and decision-making. Accordingly, the model is considered to have potential for development by including a cost analysis as a part of the decision-making part. / Att styra sin interna logistik, på ett kostnadseffektivt sätt, är en nödvändighet för att kunna konkurrera på en redan hårt utsatt marknad. Materialstyrning kan ses som en delmängd av logistik och innefattar aktiviteter för att styra och planera materialflödet från leverantör till kund. Denna studie visar på hur den interna materialstyrningen kan ske effektivt, i ett tillverkande företag. För att uppnå en effektiv intern materialstyrning så bör metoder och tillvägagångssätt utvärderas utifrån ett situationsanpassat synsätt. Studiens syfte är därför att utveckla en modell för analys och förbättring av intern materialstyrning i tillverkande företag. Fallstudien har bedrivits vid Atlas Copco Tierpverken. Vid fabriken i Tierp sker tillverkning av komponenter samt montering av handhållna industriverktyg. Den empiriska datainsamlingen har skett genom intervjuer med medarbetare på Tierpverken och observationer över det interna materialflödets processer som studien avgränsat sig till. En litteraturundersökning har gjorts, med betoning på intern logistik, materialstyrning och Lean Production. Studien visar vilka faktorer som är av betydelse för en effektiv intern materialstyrning. Rapporten presenterar en analysmodell, vilken har tillämpats på Atlas Copco Tierpverken. Analysmodellen ger en rekommendation på lämplig materialstyrningsmetod, samt vilka förutsättningar som bör uppfyllas för att uppnå en effektiv intern materialstyrning.  Analysmodellens styrkor anses främst vara att den täcker in många områden, där planeringsmiljö, materialstyrningsmetoder, effektivitet inkluderas för att beslut och rekommendationer kan utföras. Modellen bedöms ha utvecklingspotential genom att inkludera en kostnadsanalys som en del vid beslut.

Background - A company’s distribution system is a critical component and businesses need to consider the aspects of customer service and total cost when designing the distribution system. A distribution system can be defined as the process of making products or services available for customers. The rise of e-commerce has increased the challenge of having a cost efficient distribution system together with a high standard of customer service.  The distribution system is put under heavy pressure to deliver goods as quickly as possible and at the lowest possible cost due to globalization and outsourcing. E-commerce involves a new approach of the distribution system with its small order sizes, daily order volumes and small parcel shipments that are often shipped the same day. Inventory management is being regarded as an important part of the distribution system. Inventory management is the ability to balance the demand of products with the supply of products in a cost-effectively way. Companies therefore need to use material planning methods to coordinate the flow of material effectively throughout the distribution system. Purpose - The purpose of this paper is to study Mionix’s current distribution system with focus on customer service and total cost. Based on the findings, this thesis will identify which costs that are possible to influence and reduce.  Secondly, the aim is to study how material planning methods can help Mionix to improve the inventory management function and propose measures for improvement. Method - This thesis has used a positivistic view with a deductive approach. It is a case study that contains elements of both qualitative and quantitative research strategy. In order to fulfil the purpose of the study the authors have conducted a flow and situational analysis in order to identify services and costs in the distribution system that Mionix can influence. Further, the authors conducted a situation analysis of Mionix’s current inventory management function. The authors then calculated and analysed how material planning methods such as EOQ, Total cost, Sensitivity analysis, Ordering points and optimal safety stock and service levels could improve Mionix’s inventory management function. Next, alternative solutions are presented together with the authors’ evaluations and recommendations for the company. The data that was needed to accomplish this was collected by performing interviews, observations and extracting data from computer system e.g. Excel. Conclusion - The authors have identified two distribution channels within the distribution system: the wholesaler channel and the retailers/e-commerce channel. Mionix has the opportunity to influence two particular costs: capital costs and cost of loss of sales, which are included in inventory- and customer service costs according to the total cost model. Material planning methods can improve Mionix’s inventory management function by deciding safety stock levels, ordering points and EOQ for all products in accordance with the theoretical framework. Further, if Mionix use the authors’ recommendation the company can reduce estimated total annual cost by 23% or 26% depending on what mode of transportation that is used