Production Management Inside ETO Project Business
Kinnunen, Pia (2024)
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2024100125883
https://urn.fi/URN:NBN:fi:amk-2024100125883
Tiivistelmä
Global material availability has been negatively affected by the COVID-19 pandemic and increased political instability, leading to unstable component delivery, longer lead times, and higher prices and logistics costs. For Metso, improving sourcing and supply chain security, and enhancing delivery times are crucial for economic performance and customer satisfaction. This requires a focus on efficient sourcing and strategic supply chain management.
The current practice in Engineer-to-Order (ETO) project business of separately ordering parts and assemblies for each project, generates multiple costs, extends lead times, and can lead to material waste. This study aimed to investigate whether stocking certain used parts or assemblies could optimize delivery processes, reduce unnecessary work, and achieve cost savings. The research focused on how to develop stock management for the flotation TankCell® product in the ETO business by resolving whether stocking provides benefits and determining which items and quantities to stock. Stocking practices and warehouse decission were evaluated.
In this research, both quantitative and qualitative methods were used, combining literature review, data analysis, and meetings conducted primarily remotely. The work was executed independently by the author for the company Metso Finland Oy. Forecasting for an ETO business was challenging due to the variability in project requirements, making accurate predictions difficult. The selection of stockable items was guided by different criteria to optimize procurement and stocking.
Despite investigating potential benefits, the study found that stocking most components was not advantageous due to limited cost savings and inadequate volume, although some less valuable components might benefit from larger batch purchases. The study highlighted the need for improved forecasting and the level of productization. Moreover, further exploration into manufacturer collaboration and outsourcing strategies was suggested to upgrade supply chain efficiency.
The current practice in Engineer-to-Order (ETO) project business of separately ordering parts and assemblies for each project, generates multiple costs, extends lead times, and can lead to material waste. This study aimed to investigate whether stocking certain used parts or assemblies could optimize delivery processes, reduce unnecessary work, and achieve cost savings. The research focused on how to develop stock management for the flotation TankCell® product in the ETO business by resolving whether stocking provides benefits and determining which items and quantities to stock. Stocking practices and warehouse decission were evaluated.
In this research, both quantitative and qualitative methods were used, combining literature review, data analysis, and meetings conducted primarily remotely. The work was executed independently by the author for the company Metso Finland Oy. Forecasting for an ETO business was challenging due to the variability in project requirements, making accurate predictions difficult. The selection of stockable items was guided by different criteria to optimize procurement and stocking.
Despite investigating potential benefits, the study found that stocking most components was not advantageous due to limited cost savings and inadequate volume, although some less valuable components might benefit from larger batch purchases. The study highlighted the need for improved forecasting and the level of productization. Moreover, further exploration into manufacturer collaboration and outsourcing strategies was suggested to upgrade supply chain efficiency.