Epsilon Archive for Student Projects

Abstract

The purpose of this study is to analyse how a distribution and sale-network for quality softwood lumber should be designed to fit sawmilling companies' business concepts, and at the same time satisfy customer needs regarding delivery time and quality aspects. This thesis work is a case study based on a sawmilling and retail company in Sweden.

AB Karl Hedin is a private owned sawmilling company with 500 employees. The company's turnover is 1500 million SEK, it includes 4 sawmills, 16 builders merchants stores and a packaging company. The Säter sawmill has been solely owned by AB Karl Hedin since September 2005. After the acquisition the company sees a great potential in distributing and selling high quality pine to customers through their own distribution and retailing network. It is to the Hedin-group that a suggestion of a distribution and sales-network is presented.

The thesis is based on interviews with potential customers about their preferences. Interviews with wholesalers were also carried out to demonstrate how they work with satisfying their customers. Interviews were also carried out within the company in order to understand the company's potential in establishing the distribution and sales-network. Collected data was analysed according to a number of theoretical distribution models. In the customer survey, collected data suggest that potential customer are not willing to pay more for value adding services such as shorter delivery time or better customer service. Customers mainly want the right quality to the right prize. This can be accomplished through establishing the distribution and sales-network in the most cost efficient manner. Cost efficient distribution and sales are well connected to the company's strategy and business concept. Suggestions of an efficient and value creating distribution and sales-network are described in the thesis work.