Consignment stock in group trade : sales and delivery processes of Bayer Schering Pharma Oy
Rauvola, Eero (2010)
Turun ammattikorkeakoulu
2010
All rights reserved
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-201005057996
https://urn.fi/URN:NBN:fi:amk-201005057996
Tiivistelmä
This final thesis was commissioned by Bayer Schering Pharma Oy (BSP Oy). The target was to describe the current sales and delivery processes and to assess advantages and disadvantages of a CS based process compared with the current export processes. Process descriptions should clarify employees’ responsibilities and effects of their actions on the process.
Consignment stock (CS) is a logistics practice, where the supplier owns the inventory at the customer’s warehouse. Goods are not sold until the customer sells them further or uses them in a manufacturing process. Generally, a customer’s benefits are related to cost savings. A supplier’s benefits are related to strengthened customer relations. CS improves performance of a supply chain and reduces the amount of capital tied to inventory.
Two readings of the CS concept can be found in literature. Some researchers see that CS is always built on vendor managed inventory (VMI) practice, while others discuss CS without VMI.
The final thesis has a qualitative approach. Empirical material was collected by interviewing employees, by taking part in meetings and by reading company documents.
The implementation of a new sales and delivery process is a big and expensive project. Clear, profitable benefits have to be seen, if such a project is started. Implementing the CS practice in BSP Oy’s group trade would not provide such benefits. There are many reasons for this. A group has a common financial interest and strategic actions for strengthening customer relationship between subsidiaries are not needed. BSP Oy already has VMI practice in place with all of its group customers. VMI alone improves supply chain performance, CS is not needed.
The situation might be different in trade with external customers. Customers might be interested in cutting down their costs and consignment stock practice would also strengthen Bayer’s position as their supplier.
Consignment stock (CS) is a logistics practice, where the supplier owns the inventory at the customer’s warehouse. Goods are not sold until the customer sells them further or uses them in a manufacturing process. Generally, a customer’s benefits are related to cost savings. A supplier’s benefits are related to strengthened customer relations. CS improves performance of a supply chain and reduces the amount of capital tied to inventory.
Two readings of the CS concept can be found in literature. Some researchers see that CS is always built on vendor managed inventory (VMI) practice, while others discuss CS without VMI.
The final thesis has a qualitative approach. Empirical material was collected by interviewing employees, by taking part in meetings and by reading company documents.
The implementation of a new sales and delivery process is a big and expensive project. Clear, profitable benefits have to be seen, if such a project is started. Implementing the CS practice in BSP Oy’s group trade would not provide such benefits. There are many reasons for this. A group has a common financial interest and strategic actions for strengthening customer relationship between subsidiaries are not needed. BSP Oy already has VMI practice in place with all of its group customers. VMI alone improves supply chain performance, CS is not needed.
The situation might be different in trade with external customers. Customers might be interested in cutting down their costs and consignment stock practice would also strengthen Bayer’s position as their supplier.