Master Thesis Div. of Engineering Logistics Lund Institute of Technology Lund, Sweden 2005 Tutor Everth Larsson The improvement of a logistics concept Evaluation and development of Schenker’s strategic customer relations Anders Rökaas, I-99 [email protected] Preface This master thesis, written during the summer and autumn of 2005, marks the end of my years at Lund Institute of Technology. Even so, most of the work has been performed in Gothenburg, at Schenker’s SCM Headquarters. For this I send my thanks to Schenker and its personnel, since they are the ones who have made room for me, even though I some- times have found it hard to explain what it is I do, and thereby justifying my work. I hope that the core of the thesis – to improve the SCM Concept, Schenker’s tool for developing relationships with the biggest customers – will be fully explained in this report so that some light can be shed on the mystery. When I began writing this thesis, my hope was to learn as much as possible about Schenker and the logistics market, and to help Schenker become a better logistics partner. This, I feel I have achieved, although it is hard to know to what extent at this early stage. I particularly want to thank Anneli Jigberg and Mats Fransson, two great persons who have been my co-workers and mentors during my time with Schenker. Thank you for taking the time to answer my questions and explain to me what I did not understand – without you, this thesis would have been shorter, less interesting, and so much less rewarding to write. Also, my thanks go to my tutor and logistics guru at Lund Institute of Technology, Everth Larsson, who has been a great help during the entire composition of this thesis, contributing with valuable critique, suggestions and ideas. Thank you! Finally, a few words of wisdom for the readers to contemplate; the following quote is taken from Carl Sewell, the uncrowned king of customer satisfaction, and will, hopefully, one day make this world a better place. It is applicable not only to partners or customers in business, but to everyone. It need not be any harder that this. “Ask the customers what they want…and give it to them.” Anders Rökaas, Gothenburg, 2005-11-29. i Abstract The logistics market is one of the most competitive and fast expanding markets in the world. Companies from all industry sectors are recognizing the need for a well-function- ing supply chain and the savings potential possessed by managing logistics in an effective way. Transports, and the handling of them, have to be fast, precise, cheap and safe. Even though the market is expanding, the competition is increasing even faster, bringing the margins of the logistics service providers down. In such a climate, finding ways of improving one’s performance and making it more efficient is essential to stay competitive. With strategic alliances, companies tighten their collaboration, making their relationship deeper and more cost efficient. For the logistics companies, for example, strategic alliances are both a way to get and keep the customers, and a way to become a better logistics service provider by getting to know more about what the customers actu- ally want. Schenker AG, one of the world’s leading logistics companies, has several ways of tying the customers closer. Unique is the SCM Concept, which was created in the late nineties to make existing and potential customers aware of Schenker’s broad spectrum of logistics services. It is a way of cooperating with the most important customers to improve both companies and gain mutual advantages. Through the SCM Concept, Schenker offers the customers help with modelling and designing their supply chains, and the companies work out new solutions together. An important part in finding out how and where to set up the supply chain and its facilities is played by the SCM Workshop, a two-day seminar with the goal of understanding the customer’s present position and wanted future position, and then help the customer get there. The purpose of this master thesis is to evaluate and improve the SCM Concept and its workshop. The results are given in the form of a suggestion for a working template for the workshop and a series of improvements for the concept in general. Apart from this, reflections and ideas on Schenker as a company, and the use of the SCM Concept in the Schenker organization, are presented. The methods for achieving the purpose are many. Interviews with Schenker’s customers, suppliers and personnel are a few, and one of the most valuable has been the observation of an SCM Workshop in Essen, Germany. While interviewing Schenker’s personnel, suppliers and customers, it was found that the existing set-up of the concept and the workshop is working, but that it can be im- proved. Furthermore, it needs to be standardized, or at least structured. To help Schenker achieve this, the researcher has developed a model for the SCM Concept, taking into con- sideration the ideas and wishes of the people interviewed, with the influence of the re- searcher’s own opinions and views. The whole process of creating customer specific so- lutions, including the activities before, during and after the workshop, has by the researcher been divided into six activities and has been given the name the ICARUS model (see Figure 1 below). With the ICARUS model, Schenker should be able to structure the SCM Concept, and thereby improve it and facilitate its use. For the SCM Workshop, the researcher has in- stead created a template for the execution. This template consists of an agenda, a discus- sion about what persons, or roles, should participate, and notes on how to best perform a workshop. In short, it is important to gain the customer’s trust, strive to create competi- ii tive advantage for the customer and to make the customer aware that Schenker can give them what they need. Identifying and Communicating Analyzing the Revising and Using the Structuring the selecting with the information evaluating knowledge relationship customers customer Figure 1 – The ICARUS model, which contains six steps for the development of customer relations within the SCM Concept. iii Contents 1 INTRODUCTION .............................................................................................................................. 1 1.1 BACKGROUND ........................................................................................................................... 1 1.2 CHOICE OF SUBJECT ..................................................................................................................... 2 1.3 PROBLEM STATEMENT.................................................................................................................. 3 1.4 PURPOSE ...................................................................................................................................... 3 1.5 FOCUS AND DELIMITATIONS ......................................................................................................... 4 1.6 OUTLINE OF THIS THESIS .............................................................................................................. 4 2 METHOD ............................................................................................................................................ 5 2.1 METHODOLOGY ........................................................................................................................... 5 2.1.1 Qualitative and quantitative studies ....................................................................................... 5 2.1.2 Inductive and hypothesis deductive methods .......................................................................... 6 2.1.3 Qualitative case study research.............................................................................................. 6 2.1.4 Participative action research ................................................................................................. 6 2.2 RESEARCH APPROACH ................................................................................................................ 7 2.2.1 The analytical approach......................................................................................................... 7 2.2.2 The systems approach............................................................................................................. 7 2.2.3 The actors approach............................................................................................................... 8 2.3 RESEARCH QUALITY AND ETHICS ................................................................................................ 8 2.3.1 Validity ................................................................................................................................... 8 2.3.2 Reliability ............................................................................................................................... 9 2.3.3 Objectivity............................................................................................................................. 10 2.3.4 Ethics ................................................................................................................................... 10 2.4 DATA COLLECTION..................................................................................................................... 10 2.4.1 Interviews ............................................................................................................................ 11 2.4.2 Observations........................................................................................................................