Towards flow efficiency at company expansion - Material flow investigation and redirection through concept model development at ABB Ludvika

Examensarbete för masterexamen

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Type: Examensarbete för masterexamen
Master Thesis
Title: Towards flow efficiency at company expansion - Material flow investigation and redirection through concept model development at ABB Ludvika
Authors: Kostmann, Petter
Ljungbäck, Christoffer
Abstract: A large number of manufacturing companies are struggling with inefficient material flows to and from production. As a result, the flows get very long lead-times with many logistics processes. One way to improve the material flows efficiency to and from production is by letting all flows go through the same resource, as a warehouse or a LC. ABB Ludvika has decided to build a new Logistic Centre (LC) at an external area outside the production facilities. The company is actually forced to move the material handling from the production facility due to space issues, i.e. there are no more room for logistics processes outside of production. This thesis investigates how the new LC could be developed in order to improve the material flows to and from production. The research found out that there are many factors affecting the development of a LC, but also how to improve the material flows. These factors are summarized in a LC Concept Model, which states four main constraints; (1) Context, (2) Production, (3) External material flow and (4) Internal material flow, which all provides there specific emphasises on a complex problem. By investigating ABB Ludvika with the four constraints, several logistical problems were identified. The theoretical framework together with a benchmark of Volvo Car’s LC in Torslanda, the DHL Terminal, set the foundation for the analysis of the four constraints of ABB Ludvika. The analysis resulted in large improvement recommendations for ABB Ludvika. Firstly, the context constraint suggests a better cooperation and communication between the five different production divisions if the new LC should be able to work as a centralised logistics hub. Secondly, the production constraint recommends that logistic activities as well as production preparation, with similarities, currently made decentralised should be monitored and possibly moved to the new LC. Thirdly, the external material flow constraint proposes to change the relationships atmosphere with the 3PL from confrontation, where only money and power matters, to a closer cooperation, where the parties develop together with trust in the long-term. If ABB Ludvika would achieve this, more responsibility could be placed on the 3PL, which can improve the external material flow. Fourthly, the internal material flow constraint suggests a future state map with a large lead-time improvement, containing less buffers and less logistics processes. As a result, all of the four constraints give their specific input of how to develop the new LC.
Keywords: Transport;Övrig industriell teknik och ekonomi;Transport;Other industrial engineering and economics
Issue Date: 2013
Publisher: Chalmers tekniska högskola / Institutionen för teknikens ekonomi och organisation
Chalmers University of Technology / Department of Technology Management and Economics
Series/Report no.: Master thesis. E - Department of Technology Management and Economics, Chalmers University of Technology, Göteborg, Sweden : E2013:118
Collection:Examensarbeten för masterexamen // Master Theses

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