volvo car Corporation

Transcription

1 volvo car Corporation Taking control of Inbound and Outbound Logistics Lars Krafft, Director Global Logistics Network Design Date: Issuer: David Pansinger, VP Inbound and Outbound Logistics; 31st International Berlin 2014; Security Class: Public 1

2 volvo cars at a glance Cars sold Jan-June 2015 Target Employees (2014) Retailers in 100 countries (2014)

3 OUR WORLD Americas USA Rockleigh: Americas headquarters Camarillo: Design centre Charleston: Manufacturing plant (to be opened in 2018) EMEA Sweden Gothenburg: Head office, product development, design centre, marketing, administration, manufacturing plant Skövde, Floby and Olofström: Component manufacturing Denmark Copenhagen: R&D Centre Belgium Ghent: manufacturing plant Asia Pacific China Daqing: Manufacturing plant Zhangjiakou: Engine manufacturing plant Shanghai: Asia Pacific headquarters, engineering centre, design centre Chengdu: Manufacturing plant Malaysia Kuala Lumpur: Assembly plant

4 A COMPLETELY NEW PRODUCT PORTFOLIO in FouR Years with a new logistics footprint All-New XC90

5 Concept XC Coupé Concept Coupé Concept Estate 1st ed

6 Milestones of a High Speed Implementation... Volvo Personvagnar AB founded in Hisingen, Göteborg. First seriesmanufactured Volvo Transport logistics in control of Volvo Logistics Corp. (VLC) owned by Volvo AB 1999 Volvo Cars was owned by AB Volvo until 1999, when it was acquired by the Ford Motor Company. Zhejiang Geely Holding Group acquires VCC from Ford Motor Company Decision to take control of Logistics as significant potential seen 2012 Kick-off for takeover of Outbound logistics VCC takes control of Outbound logistics 12 month Kick-off for takeover of Inbound logistics Outbound logistics network operated by VCC 12 month VCC takes control of Inbound logistics Inbound logistics network operated by VCC 6

7 ... And Improvements Beyond implementation Conceptual study month m Project phase (Feb-Nov) VCC takes control of Inbound logistics Takeover of Packaging management and Return transports Go live Inbound and Return Transports for Packaging + Stabilization 2015 Kick-off for takeover of Inbound logistics China Fine tune, Re-optimize and Inbound China 2016 Network optimization, Resourcing The main reason for Volvo Cars insourcing of logistics was increased control and lowered costs Enabler of further rationalizations 7

8 The former inbound setup showed poor visibility of Transport processes and no cost control Situation before the insourcing Main activities: troubleshooting No managing capabilities No understanding of own logistics network Transportation is a black box with no control and no managing capabilities No clear budget ownership Over specified requirements- and over engineered technical solutions One 3PL with almost 200 carrier contracts Inbound network key data Suppliers: 1,500 Shipments: 1,500/day Train 8 Eurobridge Anglobridge Supply relations: 5,000 Cost turnover: 180 MEUR/year 8

9 Volvo Cars New Strategy Ambitious objectives Volvo Cars plans to grow from 500,000 cars annually to more than 800,000 Largest market - China Logistics has been seen as factor for growth with higher profitability The logistics strategy is integrated into the overall corporate strategy Implementation of an integrated transportation management system Onboard a new internal logistics organization Impact on related activities (customs, packaging) Volvo Cars has One 3PL VCC 3PL Carrier 1 Carrier 2 VCC - Volvo Cars Corporation Strategic idea VCC-internal Transport Management VCC Transport Management Carrier 1 Carrier 3PL LTL netw. 3PL Any 3rd party logistics provider 9

10 FTL LTL Other abgelehnt schriftlich zu Auftrag schriftlich eingegangen Auftrag prüfen or Bestätigungsart festlegen bestätigt mündlich zu Auftrag mündlich angenommen Lagerbestand ist ausreichend Verfügbarkeit prüfen or Lagerbestand ist nicht ausreichend Manage single service abgelehnt schriftlich zu Auftrag schriftlich eingegangen Auftrag prüfen or Bestätigungsart festlegen bestätigt mündlich zu Auftrag mündlich angenommen Lagerbestand ist ausreichend Verfügbarkeit prüfen or Lagerbestand ist nicht ausreichend 1 Three Projects are necessary to change your complete Business model: Transportation network, Organization and Processes, IT-System Network analysis & as-is evaluation Transport concepts Network optimization Tender Route implementation 2 Business Model Transportation strategies Line organization TM processes Hiring &Training Process Tactical Strategic Transportation optimization Transportation Transportation Exception Transportation Transport Purchasing and Control Trigger Handling planning Concept Implementation Freight Billing Performance Management CEO Controlling JIS Direct transport Volvo Volvo Volvo Volvo Supplier Volvo Volvo Volvo Supplier Personal Milkruns Finanzen Marketing Einkauf Produktion Regional LSP General cargo LSP Supplier Ebene 1 Ebene 1 Ebene 1 Ebene 1 Ebene 2 Ebene 2 Ebene 2 Ebene 2 Premium Freight LSP self-billing Ebene 3 Ebene 3 Ebene 3 Ebene 3 3 Process requirements TMS Selection Technical specification TMS implementation Pilot Transport management - execution Order management Exception Handling Controlling Reporting Integrated transport management system Track transport status and identify exceptions Track and solve transport exceptions Check invoices and prepare claims Analyze and report cost and performance 10

11 The Work of 10,000 people changed at one time Plants Sales 5 Plants 5 Warehouses 100 sales offices Purchasing 400 Buyers Inbound & Out- & Outbound Logistics Organization with 85 employees MP&L 500 SCC, Goods receipt etc. Suppliers 3,000 employees at 1,500 suppliers Service provider 2 Cross-docks 3 Packaging terminals Carrier new carriers 6,000 truck drivers Fundamental mindset change from being a customer to taking own responsibility for the inbound logistics performance. 11

12 Lack of transparency and competence did not allow transport optimization Outbound logistics Before Budget planning with high uncertainty Year-over-year cost increases Activities limited to coordination and invoice control Limited visibility between factory and dealers KPI always met After Significant cost savings of more than 20% Phase 2 savings between 4% and 15% Setup of organization with 30 staff members Focus shift to reduce working capital Global TMS solution Inbound logistics Main activities: troubleshooting Transportation is a black box No clear budget ownership Over-specified requirements and overengineered technical solutions One 3PL with almost 200 carrier contracts Significant cost savings of more than 15% Setup of organization with 45 staff members Actively planed and managed transportations State-of-the-art TMS and planning software Enabler for further optimization 16 LSPs in Phase 1 a few more added later 12

13 main findings and results from a Volvo Cars point of view Tight implementation timeline: No way back scenario resulted in a determined and focused project team supported by VCC board Ensure constant parameters Risk management: Large-scale changes keep scope and standardize processes Change Management: A well structured communication plan is a key success factor Savings realization: The majority of the savings were realized by improving flows and adjusting specifications Conclusion: Investing in an organization paid off on many different levels Enabler of further rationalizations 13

14 Thank you for listening!