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Coordinated inventory control and customer service performance at Volvo Parts
| Content Provider | Semantic Scholar |
|---|---|
| Author | Alfredsson, Andreas Hansson, Patrik |
| Copyright Year | 2011 |
| Abstract | This master thesis is a part of an inventory control research collaboration between NGIL (Next Generation Innovative Logistics) and Volvo Parts AB. Volvo Parts is a business unit within the Volvo Group that provides support and services for the aftermarket. Their objective is to maximise the uptime of Volvo Group products for the end users by providing support and ensuring availability of spare parts. The purpose of the collaboration is to investigate the potential of coordinated control in Volvo Parts' distribution structure. Prior studies within the project have indicated potential for significant reductions of inventory related costs while fulfilling determined target service levels to customers. This thesis is a continuation of the project and aims to evaluate the potential benefits further. Excellent customer service involves more than providing sufficient availability of articles. Customer expectations and requirements are today higher than ever before, much due to the ease of access of products and services from companies all over the world. Enhancing customer service has become a way for companies to differentiate themselves and to gain competitive advantages. This thesis aims to identify what areas Volvo Parts should focus on in order to improve their service to customers. Objective The objective of this master thesis is to evaluate the potential of coordinated inventory control at Volvo Parts and to investigate possible improvements of the company's customer service. Methodology To handle the diverse objectives of this thesis a mixed method approach is employed. A qualitative study of customer service is performed through a literature review and a series of interviews and potential benefits of coordinated inventory control are evaluated through quantitative simulations. A link between the qualitative and quantitative research exists since the interview study also aims to provide insights that strengthen the evaluation of the simulation study. Conclusions The most important areas for Volvo Parts to focus on in order to improve their customer service are information, reliability and access. These dimensions all hold considerable potential to enhance the customers' perceptions of the service. When discussing and preparing actions for improvement, Volvo Parts should also consider efforts concerning empathy. This report presents hands‐on suggestions for improvements in the mentioned areas. Today Volvo Parts uses several different measurements, some of which are related to customer service. To help the organisation to achieve a more thorough indication of their performance in the area and to strengthen the connection to the customers' perceptions this report also presents some complementary and alternative customer service oriented metrics, the most important being: Perfect order fulfilment Modification of the current metric Dealer Service Index VOR leadtime The simulation study indicates that the NGIL inventory control model holds significant cost reduction potential. The results show a decrease in total cost by more than 25% compared to Volvo Parts' current solution. Unfortunately the NGIL model rendered some solutions that appear to be unrealistic stockholding policies to implement in practice. By modifying the assumptions behind the model we received a more logical solution and an improved service level at the expense of a slightly smaller cost reduction. This favourable result indicates that relatively minor adjustments of the model can increase its suitability substantially. Our recommendation is an implementation of the model in a pilot study preceded by a revision of the calculations of the cost parameters used as input to the model, since we believe these currently limit the solutions. A more detailed adjustment of the assumptions would probably also be useful. In conclusion, we believe that the NGIL model can be of great use for Volvo Parts if utilised correctly. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://www.pm.lth.se/fileadmin/pm/Exjobb/Filer_fram_till_foerra_aaret/Exjobb_2011/Alfredsson__A___Hansson__P/Artikel.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
