Toissijaisena ideana oli parantaa SKS Automaatio Oy:n toimittajasuhteita toimittajien suorituskyvyn hallintamallilla. SKS Automaatio Oy voi käyttää näitä tietoja ja kerättyjä tuloksia hankintastrategiansa kehittämiseen ja asiakastyytyväisyyden parantamiseen.
Topic background
Research questions and procedures
The planning of the benefits achieved will be based on observations and on existing literature and articles.
Objectives
Key concepts
The benefits gained may be such as disruptive supply disruptions, reduced risks of defects, reliability of delivery or problems with the supplier's process, materials or products. Supplier monitoring can prevent or detect problems before they become too difficult to overcome or take timely corrective action.
Theoretical framework
Managing the flow of material and information in the supply chain to achieve high levels of customer satisfaction and reduce costs. As seen in Figure 1, demand and need go all the way from the end of the supply chain and the response to relationship development and service going in the opposite direction in the chain.
Research plan
The second part of the study will conduct the survey on every customer of SKS Automatio that exists in the database with a functional email address. Based on up-to-date articles written by experts and analytics, a larger picture of the current market situation will be determined.
Current market situation, competition and trends
The Finnish small and medium-sized businesses in the machine building industry still keep the manufacturing domestic. This sector still values the expertise in R&D and in design and therefore the situation seems to remain in the near future.
Procurement history in SKS Automaatio Oy
Nevertheless, they are well aware of the price level in this sector, which puts more pressure on importers to develop their business.
Operating environment
- Political environment
- Economic environment
- Social environment
- Technological environment
As generations change and the number of children in families decreases, more people are retiring than young people are entering the workforce. As mentioned earlier in the political restrictions on the right to emit, this also affects the mood of companies and consumers.
Strategic procurement
History
Purpose
Procurement strategy in the future
These are highly relevant statements if you think about companies, how they want to develop in the competition and how leading companies will develop their procurement strategies. Tom Seal (2011) concludes that the megatrends of the future will affect the world of shopping and have a great impact on how shopping will take place in the coming days.
Strategic management tools
- Market research
- SWOT Analysis
- Porter‟s five forces
- BCG-matrix
- Scenario planning
The factors identified from the SWOT analysis are filled in on the outer sections so that it is easier to create the strategies in the middle sections. Competition in the industry means how competitive the market is and how many competitive competitors exist in the market. This means question marks must be carefully evaluated and constantly monitored for their market share.
Supply chain management
Strategic supply chain management
In strategic SCM, a company's management makes supply chain decisions at an organizational level that reflect the overall corporate strategy. Martin Murray (2013) describes the strategic supply chain management in five processes; Product development, customers, manufacturing/import, suppliers and logistics. Order fulfillment and on-time delivery are an important part of a strategic supply chain and should be given serious consideration.
Competitive advantage through procurement strategy
The management or management is in the key role of creating and maintaining a functioning supply chain as there are many companies and different kinds of people involved in the supply chain and by managing it the supply chain can be transformed into competitive weapons. Communication and constant maintenance of the relationship with partners and suppliers is extremely important as this will enable both parties to understand the demand and adapt the supply chain at a mutual pace. By maintaining the entire supply chain, everyone benefits from the cost savings, including suppliers, importer and ultimately the customer.
Supplier performance management
Definition of supplier performance management
Key performance indicator
Definition of a key performance indicator (KPI)
Definition of a key result indicator (KRI)
KPI vs. KRI
Survey – quantitative approach
Main characteristics
The questions can be described as open questions, closed questions and a mix of the previous ones. The open questions are left open so that the respondent can describe the answer in his/her own words. The closed questions are predefined answers from which the most appropriate one can be chosen.
Data collection and reliability
It is also common to use a mix of previous multiple-choice questions with a field where the respondent can express the answer in their own words. It is quite easy to analyze a huge amount of data with modern software and get a pretty accurate view of the general opinion about the problem. Most of the respondents forget to answer the survey due to common reasons and contact with them is activated.
Customer panel
- Objective
- Selection of the participants
- Motivating the customers to participate
- Forming of the questions
- Digium Enterprise
- Customer survey
- Analysis of customer survey results
In the invitation letter (Appendix 1) it was also mentioned that the survey is anonymous and the results will be used strictly only for the thesis for which the survey was conducted. The survey presented eight statements to which the answer had to be given using a Likert scale. Additionally, it was possible to make the survey anonymous and collect contact information from those who wished to participate in the draw.
Customer survey results – Suppliers
- Appreciation of supplier qualities
- Current suppliers fulfil expectations
- Current suppliers quality improvements
- Why improve qualities
- Future objectives in procurement
The reason why the price is somewhere in the middle of the diagram can be concluded that although it is not the most important aspect for the production, there must still be competition in the market and options to choose from. The reason for the crushed results is probably because the answers in the first question no longer need to be improved, and that is why they are crushed on the other qualities, since those are the ones that need to be improved. The goal of quick deliveries and deliveries is surprisingly low in retention in future procurement goals, as they were highlighted as very important attributes in the first two questions.
Customer survey results - Component procurement
Manufacturing country
The fear of low quality products and unreliable deliveries is not worth the risk to the reputation and image of the products/machinery the customer makes. Products made in Finland are known for their high quality and many want to support the Finnish industry and keep the money domestic. Companies operating in Finland are mostly dependent on the products imported by a third party and thus have no control over quality control, except for the products chosen by the importer.
Experience in CC-countries
During the analysis of the results for this question, the current trend towards sourcing from CC countries emerged. Very often, the customers who thought the quality was good said that to get the good products from CC countries, effective and accurate quality control should be maintained. The conclusion can be drawn that in order to source from CC countries, there must be absolutely high quality control, years of experience in the market, working logistics for time and reliability, warehouse optimization and availability for technical support.
Needs from CC-countries
Customer survey results - Procurement strategy
Organizations future procurement strategy
The reason for the results already arose in the previous questions and we divided the results into two groups. The following statement was present to determine whether a local importer was of value to the company, as it was not clear directly in the results of the last questions. The results clearly show that quality has a very strong influence on the future purchases of the surveyed companies.
Customer survey results - Background information
- Employees
- Turnover
- Occupation
- Procurement responsibility
- Participation in drawing
The results are very good as the target groups for a sales company in the machine building industry are the top 6 of the list. The purpose of this question was to find out how many of the respondents are responsible for procurement in the organization. After the draw was conducted and the winner was informed of his lucky day, a letter was sent to all respondents thanking them for attending the survey and informing them who won in the draw, with the permission of the winner.
Cross-references
It can be conclusively concluded that an exceptional value prize has an effect on the response rate with 66% of the expected 1000 responses. The reason that the results do not differ may be because the machine building industry is homogeneous and the same qualities reflect the importance in the industry. Most of the industry, about 83% of production is exported abroad, so the pressure is more on timely deliveries than price.
Importance of the research
Answers to research questions
Reliability and validity of research
Added value for strategy development
The author hopes that he has created a procurement strategy that will improve the competitive status of his employees and thereby develop and strengthen the competitiveness of the Finnish export business through end buyers. The author also hopes that the improvement of the strategy will raise the motivation of his colleagues, because the procurement strategy cannot be done by one individual, but requires the entire staff to be dedicated to the task. Hopefully, the client's suppliers will also see this strategy as an added value when they have a more organized system to present that can improve their performance through KPIs.
Further research possibilities
Considering the results presented in chapter 7, it can be concluded that it has a good basis to proceed and create a procurement strategy and a monitoring model for the client company in general. Before proceeding with the presentation of any proposals, some other important factors should be pointed out to see if the results of the research are in line with the research questions. The survey had excellent response rates and the open questions brought depth to the results and a deeper understanding of the reasons behind the responses.
Strategic procurement
Consumers are increasingly procuring products that are proven to have good ethical values and are produced for the environment. The only way to prove the origin and production methods are the quality standards, approvals and certificates that a company can obtain. Possession of these certificates positively affects marketing and increases employee motivation.
Supplier performance management
Suggestions for business strategy
The selected KPIs will be pointed out to the main suppliers and the KPIs used are selected, after which they can be automatically monitored from the ERP and based on the structure of the supplier's supply chain. The team's efforts will achieve improvements in SKS Automaatio Oy's supply chain as well as in the supplier's ability to handle problem situations in their processes.
Author‟s learning diary
