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‘The Effect of Omni-channel Implementation on Supply Chain Efficiency in the Automotive Industry’ Bachelor Thesis International Supply Chain Management Academic Year 2020-2021 December 2020
Author: Bjorn van den Bogaart
SNR: 2001118
ANR: 116798
Supervisor: Mrs. D. Lases Figueroa / Dr. ir. F. Fang
Program: Bsc. Business Economics (BE)
Faculty: Tilburg School of Economics and Management
Word count: 7938 1 / 5
Management Summary This research contributes to the existing gap in the literature about the influence of omni- channel implementation on the supply chain efficiency, focused on the automotive industry.This is one of the industries that is evolving towards a next-generation industry, due to the efficient use of emerging technologies. This research defines supply chain efficiency and the omni-channel strategy. Thereafter, it highlights the inefficiencies in the automotive industry supply chain. It ends with an illustration of the effect of omni-channel implementation on supply chain efficiency.The conclusion is drawn that due to the opportunities that the omni-channel strategy provides, the supply chain efficiency in the automotive industry could be improved. Disappearance of boundaries and data sharing across all channels, creating synergies and creating more alignment within the supply chain. These are examples of opportunities of the omni-channel strategy that could (partially) solve the inefficiencies in the automotive industry supply chain.However, there is a careful note that must be added to this conclusion. The automotive industry supply chain is very complex. There are many challenges remaining to raise the supply chain efficiency in the automotive industry. Also, omni-channel implementation brings challenges. There are multiple components that need to be aligned to make the supply chain more efficient.
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Table of contents Management Summary............................................................................................................2 Chapter 1 - Introduction..........................................................................................................4 1.1 Introduction......................................................................................................................4 1.2 Problem Indication............................................................................................................4 1.3 Problem Statement............................................................................................................6 1.4 Research Questions...........................................................................................................7 1.5 Research Design................................................................................................................7 1.6 Thesis Structure.................................................................................................................8 Chapter 2 – Omni-channels.....................................................................................................9 2.1 Omni-channel: Detailed description and Comparison......................................................9
2.1.1 Multi-channel...........................................................................................................10
2.1.2 Cross Channel..........................................................................................................10
2.1.3 Omni-channel...........................................................................................................11
2.2 Challenges.......................................................................................................................12 2.3 Opportunities...................................................................................................................12 2.4 Conclusion......................................................................................................................13 Chapter 3 – Supply Chain Efficiency....................................................................................14 3.1 Supply chain: Detailed description.................................................................................14 3.2 Supply Chain Efficiency.................................................................................................15 3.3 Conclusion......................................................................................................................18 Chapter 4 – Inefficiencies in the Automotive Industry.......................................................18 4.1 Supply Chain in the Automotive Industry......................................................................18 4.2 Inefficiencies in the Automotive Industry.......................................................................20 4.3 Conclusion......................................................................................................................21 Chapter 5 – Omni-Channels and Supply Chain Efficiency in the Automotive industry.21 5.1 Omni-Channels and Supply Chain Efficiency................................................................21 5.2 Omni-Channels in the Automotive Industry...................................................................23 5.3 Conclusion......................................................................................................................25 Chapter 6 – Conclusion..........................................................................................................25
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6.1 Conclusion......................................................................................................................25 6.2 Limitations of this Thesis................................................................................................26 6.3 Recommendations for future research............................................................................27 References................................................................................................................................27 Chapter 1 - Introduction 1.1Introduction ‘The internet is expanding rapidly into every market and many geographic locations’.(Morton et al., 2001 – p501). This is a quote from an article of ‘The Journal of Industrial Economics’ written almost twenty years ago. There has been a significant change in the retailing world over the past years. For example, in the United States, the sales originating from online channels increased with 15% every year since 2010 (Gallino & Moreno, 2019).The automotive industry is an example of an industry which has been developing along with the growth of online channels. Back in 2000, more than half of the new vehicle buyers used the internet in the purchase process (Power, 2000). Since then the automotive industry has evolved towards a next-generation industry that involves modern, autonomous and constantly connected cars (Kim & Kim, 2018). The efficient use of emerging technologies also has an impact on the expectations and behaviour of the customers, which expends the boundaries of many industries (Pantano & Timmermans, 2014). Despite these developments customers still seem to want a physical experience when it comes to purchases such as a car. They want to ‘Kick the tires’ (Morton et al., 2001).
1.2Problem Indication As stated before, many industries have been undergoing structural changes as a result of the development of online channels. These changes have impacted the way customers behave and the customer expectations (Pantano & Timmermans, 2014; Gallino & Moreno, 2019).Customers nowadays expect some degree of flexibility. An example is outlined by Morton, Zettelmeyer and Silva-Rosso (2014). They mention that nowadays customers to be able to buy online, pick up in store, return in store, or buy in store and have a product shipped to a desired address. In other words, the impact of emerging mobile technologies result in a customer expecting a seamless shopping experience (Avidar et al., 2019). Examples of emerging (mobile) technologies in de automotive industry are Internet of Things, big data and
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