eThesis - School of Business electronic theses

Objectives of the Study:

Today's globally competitive environment drives companies to seek competitive advantage from their supply chains. Pure cost reduction does not serve the goals of competitiveness. Varying demands and rapidly changing business environment make it increasingly essential for companies to consider the responsiveness and flexibility of their supply chains. The purpose of this thesis is to examine what kind of distribution network structure is the most flexible, responsive and cost efficient when distributing Finnish based sport instrument manufacturer's, Suunto Oy's, products to customers in Asia-Pacific area.

The theoretical objective of this study is to discuss the general distribution structures and present a framework for defining the most suitable distribution structure for a company. Empirical objective is to make a suggestion for Suunto Oy about their distribution network.

Academic background and methodology:

The focus of this study is the redesign of physical distribution network. Theoretical part consists of three topics; internal- and external business environment affecting on distribution structure strategy, distribution structures and performance measurement in distribution channel. The main research question is "What is the ideal physical distribution network structure for Suunto's products in Asia-Pacific area?"

Empirical part applies the knowledge build during the theoretical part to business case of Suunto Oy. The case study follows a supply chain case analysis framework, which comprehends following steps; current situation analysis, main issue and problem identification, evaluation of alternatives and justification of the recommendation. Furthermore, performance measurements used are selected and evaluated against company's strategic supply chain goals in order to reach the solution supporting the broader strategy.

Findings and conclusions:

The findings of empirical part show that companies whose products' demand vary across time and areas, benefit from inventory centralization within those areas. Depending on the current state of physical distribution, there is possibility to shorten total order-to-delivery lead-time, cut inventory levels and transportation costs and decrease pollution. Research shows that Suunto Oy can serve customers better in time and more efficiently with centralized distribution structure