Merge in Transit - A non-stock distribution structure

Abstract: The purpose ofthis thesis is to describe and define Merge in Transit and toidentify and explain differences in performance between Merge inTransit and a traditional structure with central and localwarehousing. Based on the result from the study Merge in Transit could bedescribed as a distribution structure where deliveries fromdifferent sources are co-ordinated and brought together at mergepoints and where goods and order flows are monitored and controlledin a central order unit. The main effects on costs from Merge in Transit compared to astructure with central and local warehousing are reduction ofinventory, warehousing and administration and an increase ordecrease of transport costs. The main effects on service arecomplete deliveries to customers' premises and an increase incustomer order lead time for product previously stored locally.Other effects from Merge in Transit are increased range, increasedcomplexity and reduced storage time. The differences in performance could to a great extent be explainedwith scale economics, eliminaton and postponement ofactivities.