Volvo Logistics

Volvo LogisticsCreativity Talks - Vlerick Leuven 17/01/2012 - Veronique Van Damme / Miguel Van Opbroeck


Volvo Logistics

Creativity Talks - Vlerick Leuven 17/01/2012 - Veronique Van Damme / Miguel Van Opbroeck

Volvo Group products

Mack TrucksRenault Trucks UD TrucksVolvo Trucks

Mack Trucks Volvo AeroMack TrucksVolvo PentaBuses ConstructionEquipment

Volvo Logistics Corporation

Volvo Logistics

Our history

1999 Volvo Cars is sold to the Ford Motor Company.

2007 The Volvo Group acquires Nissan Diesel (currently known as UD Trucks).

2007 The Volvo Group acquires Lingong, Chinese manufacturer of construction equipment.

2008 Establishment of joint venture company with Eicher Motors.

2012 The Volvo Group’s new organization comes into force. The vision is to become a world leader in sustainable transport solutions.

2001 Volvo Group acquires Renault Trucks and Mack Trucks.



Outbound37%

Emballage10%

Inbound53%

Our customer base stems from the Volvo Group as well as from external companies

Customer BaseSales 1 BEUR (0,75)

Customer savings 35 MEUR (38) Transport precision 95%

Employees 1100 (900)

Volvo Group EXAMPLES

External

By customer base By product

2010 (2009)

Sales split

Volvo Group57% (60%)

External 43% (40)


The vision for VLC is to be recognized as the leading logistics partner within the automotive, commercial transport industries

Vision

The mission is to deliver complete supply chain solutions that add value for our customers worldwide

Mission

Volvo Logistics

Cost efficient growth requires global processes


Global business

Year 2000 Year 2011

Cost efficient growth requires structure and standards

Volvo Logistics


4PL role of Volvo Logisticsan integrated working method with customers and providers

Operations

Logistics Development

Contracting

VLC

Single Point of Contact

Single Point of Contact

Operations


Contracting

Volvo Logistics

Customer • One interface

• with common working methods / KPIs

• eliminating risk for sub-optimisationwhile providing economies of scale

• Continuous improvement model with tight relations between logistics development, contracting and operations

• Integrated meeting structure on operational, tactical en strategic levels

• One IT solution for each process

• Non-asset-based

• Supplier management


Cooperation approach

Common business plan

Visions and strategies

Objective settings and follow-upStrategic

Operative

Tactical

Regular operational improvementDeviation handlingFollow-up and actions on operational KPIsShort term forecast and launch planning

Follow-up of KPIsRe-engineering and prioritizationContinuous improvementsLong term forecast

Key AccountManager

Operations

Volvo Logistics

Focus on Re-engineering

• Joint fora for re-engineering

• Re-design of existing flows andlogistics set-up

• Prioritization, top 10 list

• Yearly budget for development and innovation appr 25 M€

Operations


ContractingRe-design and process improvements

Rate reductions

Breakdown of cost savings activities

20 % 80 %



Focus on pre-operational system

Operational SystemPre-operational System

“70-80% of the logistics cost is set by strategic decisions”

“Only 20-30% of the logistics cost can be impacted in the operational system”

Inbound Outbound

Factory

Emballage

Sub-supplier / supplier

Internal Logistics

Dealer (or end

customer)

Concept

SCM Competence Center

Synergies

Future Supply Chain Focus is strategic, since the majority of the cost is set by strategic decisions


One voice towards Logistics Providers

670 suppliers (Group level)21% (144) represent 90% of Spend


…a reflection on how VLC approach our providers…

0

1

2

3

4

5

6

7

8

9

10

0 1 2 3 4 5 6 7 8 9 10

Complexity of supply (External)

Crit

ical

ity o

f Pur

chas

ing

(Inte

rnal

)

“Core Volume”

“Competitive bidding lane”

“Bottleneck”

High

Low

Low High

“Strategic”• Long term alliances with

selected strategic suppliers• Joint focus on total logistic

Cost, Not Price• Continuously improved service

& performance•Use market benchmarks

to secure competitiveness!


Utilize customers’ and suppliers’ know-how

Physical movement

Coordination

Management

Increase collaboration with all parties to develop our concepts

Competition&collaboration

Further integration and collaboration

VLC

Asset Owners

Plants

Green OK/Plants

Competitors

Dealers

Suppliers


Economies of scale and scope

Volvo Logistics Pricing PhilosophyPrice/payload

Payload

2 examples :

- Deep sea container flows

- Distribution cars

1

2

Payload = recalculated weight or volume

Volvo Logistics


Passive office building

Windmills

X-docking consolidation effect


H = 4,76 vs 4,00

B = 3,30 vs 2,50

Special intra port area flows

Volvo Logistics


Car yard consolidation effect


Co-modality & multi-modality

Volvo Logistics


Volvo Logistics



Volvo Logistics



Volvo Logistics


Volvo Logistics

Our Core Values are integrated in all we do!

• Management System• Customer Satisfaction• Continuous Improvements• Process Orientation

• Road Safety• Transportation Security• Site Security• Dangerous Goods

• Reduced Emissions• Carrier Development• Environmental Assessment• Site Related Environmental

Impacts



Environmental challenges drive innovation !!CO2 emissions Europe, road, rail, short sea2006-2010 – 21%

CO2 [g/ton*km]

56,5 55,7

50,0 48,644,8

2006 2007 2008 2009 2010

20062007200820092010

Environmental objective 2010 - 20% CO2 emissions 2010 g per ton km from land transports in Europe (baseline 2006)

Volvo Logistics

Green & Safe YardsHow to get a green & safe image on the yard market ?

• multimodal connections (train, barge, roro)

• electrical yard service vehicles• highest possible EUR level for yard machine engines

• automatic stop/go on yard machines• alcolock on yard machines• use “ad blue” compatible machines on yards

• use bio-fuel for the yard machines and vehicles

• On-shore Power Supply (OPS) on port facilities (study)

• performant waste management concept

• minimised energy consumption (mainly fuel and lighting)

• Yard Management System (YMS) to optimize movements of vehicles on the yard •…………..



Supply Chain LeadershipKnowledge and expertise are key

Supply ChainCompetence

Centre

Supply ChainCompetence

Centre

Synergies& Value addSynergies

& Value add

Concept Development

Concept Development


We must persistently pursue ways

to jump aheadof our own latest product or service


1927 – Environmental friendly transports


1928 – Loading cargo on a railway wagon


1952Extra longvehiclecombination


1980s - Emballage

Volvo Logistics

Wanted position 2012 Outbound

”We are using next generation tools to track & trace finished vehicles by applying data capturing based upon new technologies, (GPS,…….)”


Trying new ways of working….

Factory gate out Factory Yard Harbour Harbour Distribution yard – Cross dock

Distribution yard – Cross dock

DealerBody builderSite delivery

Volvo Logistics

Prototype idea

Explore new ways to track & trace finished vehicles utilizing mobile applications


Track & Trace functionalityExploring new innovative ways to track & trace finished Vehicles

Challenges

1. Provide visibilty & transparancy to end customers independent of carrier

2. Mixed fleets of carriers

3. Different maturity level of the technology used by the carriers

4. Finding cost effective track & trace solutions suitable for all carriers

feasibilityTechnical & Organization

desirabilityhuman needs

viabilitybusiness needs

Volvo Logistics

- Smartphone price levels are decreasing

- Increased usage of smartphones: The smartphone market is developing rapidly

- Implementation / Distribution of apps easier than ever

- > 300,000 mobile apps have been developed in 3 years



Benefits

• Reduce capital tied up - Increase speed for invoicing

• Administration time saved at carrier back-office- activities transferred to driver

• Remove printing yard picking lists

• Increased transparancy - efficient planning next steps

• The app4D is easy to use and to understand

• Smartphone is a versatile- and cheap solution

Volvo Logistics

A glance into the App4D


Volvo Logistics

Load Report load of truck


- Press ”Upload” to report load

- Result screen of whathas been loaded is displayed.

Volvo Logistics

ETAReport/update Estimated Time of Arrival during transport


- Select the clock symbol toset the ETA (estimated Time of Arrival) of the selected load.

- Type in the date and time and press ”OK”

- After ETA have been set the confirmed load list is displayed.

Volvo Logistics

DeliveryMark vehicles as delivered


- Start up the A4D application& login

- A list is presented with the vehicles that are loaded on the truck.

- Press ”+” for the vechicle(s)that have been delivered.

- Select ”OK” to mark the vehicle(s) as delivered.

Volvo Logistics

Movie prototype Track & Trace App4D



Key Succes factors

• Integrated approach

• Cooperation approach

• Utilize customers’ and suppliers’ know-how

• Focus on pre-operational system

• Focus on Re-engineering

• Environmental challenges drive innovation

• Right Mental Attitude


Some EU logistic challenges (from a Flemish perspective) • fluid implementation of Ecocombi ("EMS") for well defined flows

• administrative simplification of short sea shipping (SSS),

and establish a framework for granting pilot exemption cerificates for regular SSS lines

• knowledge of basic (transport) English of all EU truck drivers

• we support the co-modality vision and have big questions concerning the“forced”

targets (30% ex road in 2030 and >50% ex road in 2050) regarding modal shift

• modern and expanded rail infrastructure

• adapt the social legal frame to support night time deliveries

Date post:	12-Jan-2015
Category:	Business
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Volvo Logistics

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