Abstract

Purpose – The purpose of the study is to identify the challenges that arise in the production flow of a manufacturing company between an internal and external operating unit and how these challenges can be managed to achieve higher delivery performance in the production flow. The following two questions where formulated in order to fulfil the purpose of the study:

1. 1.     What challenges arise in a manufacturing company in the production flow between an internal and an external operating unit.  

1. 2.     How can the challenges in a manufacturing company be managed to improve delivery performance in the production flow between an internal and an external operating unit.

Method – To answer the questions of the study and thus fulfil the purpose a case study was conducted at Bufab Lann AB in Värnamo. Observations, interviews and document studies were conducted to obtain empirical data. Empirical data was analysed against the theoretical framework of the study to answer the study questions. 

Findings – Three challenges were identified in a production flow between an internal and external operating unit: Unlevelled internal production flow, lack of supplier collaboration and inadequate information and communication exchange. The challenges interact with each other, where internal problems are reflected and magnified when an external operating unit is included in the processing operation. To manage the identified challenges with regard to delivery performance must initially the internal production flow be levelled and thereafter establish closer relationships with suppliers and improve the exchange of information to suppliers.

Implications – Synchronizing planned production to the end customer’s delivery date can level the internal production flow while also applying FIFO principles to overloaded stations. To establish good supplier collaboration the number of suppliers should be evaluated to simplify and maintain frequent and routinely information and communication exchange. 

Limitations – During the study a single case study was conducted with one analysing unit, which is not optimal to obtain generalizable results. Conducting additional case studies in several manufacturing companies would have increased the study´s external validity and thus strengthened the generalizability. The study´s reliability is limited with regard to the views and opinions of the study´s external operating unit since only one interview was conducted with the external party.     

Keywords – Production flow, delivery performance, supplier collaboration, information exchange.