Logistical Redesign of the Seat Supplying Process for Volvo Trucks, Europe

Abstract

Emerging markets have gained importance in today’s global business. Numerous opportunities are offered for companies looking for cheaper supply sources; Volvo AB as a global business group has not been indifferent to this trend, and it has turned toward these markets for component sourcing of different types. Now, Volvo Trucks has started to investigate the possible advantages of sourcing from emerging markets in the case of the seats for its trucks. This thesis is an inbound-logistics research. It studies the possibility of sourcing seat-components from emerging markets, under a logistics perspective. Based in the current situation of the seat supplying process for Volvo Trucks in Europe, 3 different alternatives are formulated in which the seat-components are sourced at the tier-2 level from emerging markets. The purpose of the project is to show whether or not the proposed alternatives offer significant potential cost-savings at adequate service levels over the current situation for Volvo 3P. The purpose is achieved by confronting the current situation with the proposed alternatives in terms of potential cost-savings and service levels. Findings, conclusions and recommendations resulting from this thesis aim at supporting the organization’s purchasing strategy, providing a solid base for future decisions. Key words: emerging markets, sourcing, purchasing, seat components, cost-savings, service levels, logistics, supply chain management.