MANUFACTURING STRATEGY a Case Study for AvestaPolarit

Abstract

AvestaPolarit’s Hot Rolled Plate produces stainless steel plates. The business unit does not compete by having the lowest prices. Instead, it does so by offering high reliability concerning quality and delivery lead-times. The company’s supply chain has changed vastly over the past year, ever since the company took over TKN and the production of slabs (raw material) moved to England. This in turn emphasized the importance of having the right level and structure of stock for offering the high level of service. In the light of these new challenges, AvestaPolarit entrusted the authors with a project aiming to construct a framework for gaining an understanding of the postponement/speculation strategy decision.

The purpose of this master thesis was to evaluate and determine HRP’s preferable postponement/speculation strategy. This was performed in view of HRP’s new supply chain, increased customer requirements and competitive focus. Moreover, the effect that customer demand information (forecast and orders) and internal linkage between the departments pose on the P/S strategy decision and thus in the determination of the location of the CODP, was also researched.

A case study research, at the Hot Rolled Plate, was performed to fulfil the purpose. The aim was to collect relevant information for the purpose at hand. Unstructured interviews with managers from different departments were the main source of information. These were supported by in field observations, and documentation to some extent.

Sufficient evidence was found for recommending a manufacturing to stock / manufacturing to order strategy. Furthermore, indication was found to assert that internal linkage is a prerequisite for a successful implementation of this strategy.