Implementing Product Eliminations: A case study on the challenges faced by a large industrial organization
Sammanfattning: The elimination of products is an inevitable, but daunting, task. With rapid technological development, companies are pressured to introduce new product to the market at an increased frequency to maintain a competitive advantage. As new products are being introduces more frequently, removing older generations of products becomes a powerful tool to maintain operational efficiency and concentration of management efforts. Despite this, the topic of product elimination has been neglected in theory and remains a struggle for practitioners. Implementing a product elimination decision requires coordination of multiple actors throughout the supply chain with the objective of removing a product with minimal losses, while retaining customer goodwill and acceptance. Thus, the purpose of this research was to evaluate current practices and challenges faced by large industrial organizations during the implementation of product elimination decisions. An in-depth case study was conducted to meet the purpose of this study, with a qualitative approach consisting of semi-structured interviews with departments that are central to the product elimination implementation process. The findings from the interviews were complemented with observations and data obtained from the ERP-system. The results indicate that having a planned phase out is preferred when implementing product elimination in a larger scale, i.e. eliminating a whole range as opposed to stand-alone products. Eliminating a range requires simultaneous management of multiple products that differ in volume and how they progress during the implementation. Changing material planning type was found to be a method for gradually reducing inventory levels and allowing a longer lead time on the products, giving customers incentive to purchase a more attractive replacement product. It was found that even within an individual organization, the procedures varies between product elimination cases, which makes them unique. Finally, inadequate internal communication channels and systems that supports the large scale implementation the case company faces, are major obstacles in the product elimination process.
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