Cost Optimization in Event Logistics - The Case of Volvo Cars Exhibitions Logistics, Volvo Ocean Race

Abstract

International markets continue to offer expanding opportunities for global events, exhibitions and trade shows. Immense logistics efforts are required for the event to go live. The complexity of this type of logistics compared to the general supply chain is explained by high demand on flexibility, know-how and creativity from logistics service providers combined with extensive service variability and very strict timelines. Finding the ways to optimize logistics costs and achieve cost-efficiency is of primary concern for both event organizers and exhibitors. The purpose of this study is to identify the appropriate sourcing strategy to increase cost optimization of event logistics. This study is supported by Volvo Ocean Race data as an example of a global event with extremely complicated logistics setup. For the global event, sourcing decision is multi-objective, multi-product and multi-modal. Therefore, three types of sourcing strategies can be applied: single-, dual- or multiple-sourcing. Every of these strategies has own pros and cons. However, our thesis introduces a new solution to this problem and develops a cost weighted approach for the determination of the most cost-efficient sourcing strategy in event logistics. Developed model and its implication to Volvo Ocean Race shows that service specialization plays a significant role in event logistics and multiple sourcing strategy proves to be the most cost beneficial. The empirical results also show that a combination of logistic providers with different portfolio and asset structure gives benefits both in the reliability of provided services and cost efficiency. We believe our findings can advance knowledge in the narrow research area of exhibitions logistics and may be applied to various types of global events.