Service level improvement through lead time reduction and inventory optimization

This Ph.D. thesis aims to understand, first, why some companies excel at logistics service level while others do not and, second, how to improve logistics service level. More in detail, the goal of this research is to investigate and analyse both the drivers and the obstacles of logistics service level excellence. <br>Logistic service level represents increasingly today, in very competitive markets and in the presence of very demanding customers, a crucial element for differentiation and a source of competitive advantage in many different businesses. There are different facets of logistics service level, defined as a bundle of different attributes. This thesis has focused on two of them: <i>speed</i> and <i>inventory availability</i>. <br>Given the nature of the research objectives developed, an exploratory case study research methodology has been chosen to gain an in-depth understanding of a phenomenon: drivers and obstacles of service level improvement. First, <i>lead time reduction</i> has been investigated through <i>make-to-order</i> cases. The focus has been, first, on manufacturing lead time, analysed through a single in-depth case study, and then has moved to order-to-delivery lead time, studied through a multiple case study research. Second, <i>inventory availability</i> has been investigated through multiple <i>make-to-stock</i> cases. <br>The first output, a theoretical contribution, of this thesis consists of a conceptual foundation for theory development concerning logistics service level improvement. Three frameworks, focused respectively on manufacturing and order-to-delivery lead time reduction and inventory availability improvement, have been developed combining the knowledge emerged from the literature, the case studies and the observations and the experience of the researcher. <br>The second finding, a practical contribution, is that, although lead time reduction is increasingly today a key driver for competitive advantage or even for survival in many different businesses, there is still substantial room for improvement and, more dangerously, managers are often unaware of this opportunity. In addition, this research highlights that the main obstacles of lead time reduction seem to be more related to other management areas, such as people behaviour, organisation and accounting, than to technical operations management issues. As far as inventory availability is concerned, the main practical finding is that managers should not only focus on inventory management, but also to other related processes such as warehouse management and forecasting and that there are different ways, not a single recipe, to reach logistic service level excellence.

Thèse de doctorat : Université de Neuchâtel, 2015 ; 2495