Design integration in Supply Chain Management

Henrik Heegaard Christensen

Student thesis: Diploma thesis


It can be argued that a firm can only obtain a competitive advantage by one of two ways; low costs or differentiated products. Considering the Danish design companies like Fritz Hansen, Stelton and Erik Jørgensen it clear that the companies have chosen a differentiated strategy with unique and high quality products at high retail prices. It would then be natural that a company like IKEA would follow a low cost strategy with low quality product in terms of physical and aesthetic quality - and this is where the dilemma arises. IKEA is selling high quality designed products at a fraction of the price of the Danish design companies. How can this be possible?This project proposes that the integration between product design and supply chain management will lead to cheaper and better products. It also suggests that this is the cause of IKEAs ability to sell products at lower prices than those of the Danish design companies cost prices.The project sets out to find an answer to how can the integration between design and supply chain management lead to a competitive advantage? and following it proposes how a tool can be made which could help Danish Design Companies to integrate design into their supply chain.In a literary review the project collects a theoretical background based on three areas; The firms core competence, The coordination between product and supply chain and finally, The coordination between product- and supply chain variables. This theory serves as a foundation for a series of semi structured interviews at IKEA, Fritz Hansen, Stelton and Erik Jørgensen to uncover how the firms are working with design and supply chain management and the integration hereof. The analysis will show how the best practice case, IKEA is perfectly aligned with the theoretical suggestions and thus conclude the direct cause between the integration of design and supply chain management towards a competitive advantage. The analysis also reveals “an area of mis-alignment” between the best practice case and theory, and the Danish design companies. It is argued that this area is the cause of the high cost base at the Danish Design Companies. A framework is proposed: The Road map To A Competitive Advantage - by integrating design into supply chain management suggesting a set of tasks the firm must preform in order to obtain the competitive advantage. And together with reflections on the maturation of the firm and its abilities for this integration a foundation for a competitive for the Danish design companies is made.The project summarizes with the lessons learned and other possible outcomes together with further perspectives on future works.

EducationsGraduate Diploma in Supply Chain Management, (Diploma Programme) Final Thesis
Publication date2012
Number of pages90