Degree project in Logistics, 30 credits, The Business Administration and Economics Programme, Linnaeus University, 4FE05E, Spring 2013

Authors: Ida Nilsson & Malin Skacke Tutor: Peter Berling Examiner: Helena Forslund

Title: Increased profit potential by controlling customers’ ordering patterns -­‐ A case study at Oatly

Background:

Oatly manufactures and sells oat-­‐based products and deliveries are today carried out through an external distributor. The company is going through a re-­‐organisation and will in the future be managing stock keeping and planning of deliveries with their own resources. The customers’ present ordering frequency and volume differ substantially, leading to unnecessary costs. In order to reduce their costs, Oatly will have to influence the customers’ ordering patterns.

Purpose:

To identify what ordering patters Oatly’s eleven customers have and what logistical costs each creates and what drives the costs. Furthermore, the purpose is to determine how the customers most appropriately can be steered towards larger order volumes less frequent to increase Oatly’s profit potential.

Methodology:

A positivistic angle has been used throughout the report with a deductive approach. The report is a case study of the company Oatly and a qualitative research strategy has mainly been used. A certain amount of quantitative data has also been used and all numbers and costs in the report are fictional due to confidential reasons. Theoretical and empirical evidence has been analysed to draw any eventual conclusions.

Conclusions:

The report’s problem based questions have been answered with a number of conclusions. The ordering pattern of Oatly’s customers differentiate in terms of volume and frequency, which can be due to the customer’s size and what resellers

they have. An additional conclusion is that logistical costs arise in combination with the activities of reloading, transportation and administration. The extent of these activities differs from one another and therefore contributes to differences in the costs between the customers. The costs are primarily driven by number of incompletely ordered pallets, volume as well as the number of orders. The customer’s ordering patterns can be controlled with the help of controlling methods and the most appropriate ones are gradual order discount in combination with a fee for ordering on a non-­‐agreed day as well as good communication and well formulated contracts.

Keywords: Ordering patterns, logistical costs, discount, ordering related incitements, contracts.