The impact on the aftermarket supply chain with increased pre-planned service activities - A case study at Volvo Group

Examensarbete för masterexamen
Master Thesis
Supply chain management (MPSCM), MSc
Yr Bjarnadottir, Audur
Halldorsdottir, Hulda
Aftermarket services in the automotive industry bring profitable advantages to manufacturing firms and are a major enabler to secure customer loyalty by providing value-adding services through the product life-cycle. High uptime of vehicles is one of the key performance indicators as it increases customer satisfaction which is the fundamentals for long-term relationship with the end-customer. Demand for spare parts is difficult to monitor as breakdown services can occur at an unpredictable time. Therefore, it is challenging for many OEM’s to contribute to high availability of spare parts in a cost efficient way. Today there is data available from connected vehicle technology to facilitate pre-planned services activities and to avoid breakdown situations. The Volvo Group has implemented pre-planning to their aftermarket supply chain but as the amount of pre-planned service activities is not performed in a high degree the company is uncertain about the impact from this concept. The purpose of this thesis was formulated to investigate the impact from higher degree of pre-planned service activities on the aftermarket supply chain in order to identify future performance potential. The thesis was conducted as a case study at the Volvo Group. Three research questions were stated in order to identify scenarios where pre-planning has impact on the spare part control; 1) identify the effect from current spare part control practices and performance in the aftermarket supply chain, 2) identify how pre-planned service activities affect the current spare part control, and 3) identify the opportunities and obstacles for future performance potential on different spare part control scenarios. The current aftermarket supply chain at the Volvo Group was investigated and analysed to find the practices and performance indicators that are affected by the current spare part control and their relevance to higher uptime and decreased lead time, transportation cost and tied-up inventory was evaluated. Characteristics of pre-planning were conducted from literature and benchmarking study from the automotive industry was made to estimate effects from pre-planned service activities on the current spare part control. Historical sales data from two dealers was analysed in order to understand current behaviour from the dealer side. Furthermore, potential pre-planning scenarios and their effects were identified to visualize direct impact from higher degree of pre-planned service activities. The results from this thesis give a clear description on how pre-planned service activities impact the current spare part control. It has the potential to contribut e to higher uptime of the vehicle with reduction of inventory levels at dealers and supporting warehouses, and total transportation cost. Furthermore, it identifies potential planning scenarios where pre-planning will have different impact from different segments of parts. The greatest impact are from faster moving segments of spare parts, that represent the majority of sold parts, and supports the potentials of reduction of total inventory cost, transportation cost, and higher turnover rate at dealers’ stocks.
Transport , Övrig industriell teknik och ekonomi , Transport , Other industrial engineering and economics
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