Analyzing the Inbound Logistics Flow for a Fragile Component at Volvo Buses

Abstract

This thesis investigates the logistics flow for a long and fragile component at Volvo Buses. The focus is placed on six areas of the logistics flow for the component, namely, packaging, emballage, handling at the supplier (loading), transportation, handling at the buyer (unloading) and storage. This thesis challenges the current logistics set up for the component and looks into alternative logistics setups. Different transportation and storage options are explored and the the most favourable options are identified. For the optimal logistics setups, for all four scenarios, call off volumes at which the early total landed cost is minimized, are then selected. Additionally, lead time and the environmental impact for the optimal logistics setups are discussed. A combination of nterviews, observations and emails is used to collect the necessary data for this thesis. General scenario process is initially used to generate the different scenarios. An extension of the EOQ model, built specifically to fit the problem in this thesis, is then used to generate all the scenarios numerically, under the different call offs and to analyze the results. Lead time and environmental impact were analyzed qualitatively. From the analysis of this thesis, under the assumptions of the model, improved transportation and storage options were suggested. The thesis also found that the third call off volumes are the most optimal under most of the scenarios. Only for Supplier A, where 4 p/ns are considered, the second call off volume is found to be the most cost efficient. Moreover, the optimal call off volumes do not change as the capital tied up is reduced. Since the results in this thesis are based on many assumptions and limitations in the scope, a further research is suggested where dynamic pricing is and optimal production batch sizes are considered for improved results that will correspond to reality better.