Setting Aftermarket Logistics Requirements in New Product Development Phase Case study in Volvo Group

Examensarbete för masterexamen
Supply chain management (MPSCM), MSc
Teresa, Julie Riyanti
Chacko, Dion
The aftermarket could enjoy a bigger market share often up to five times the size of new products. Aftermarket services also play a major role in customer satisfaction and retention. Due to this, companies can no longer treat aftermarket as a mere afterthought and need to strategically focus on it. An efficient logistics of the aftermarket would then enable firms to provide excellent services and maintain customer satisfaction. The aftermarket service has a crucial role in increasing the success rate of new products, so they believe that it needs to be evaluated starting as early as in the New Product Development (NPD) process. 70-80% of the cost of the product and environmental impacts are determined and locked at the design phase. Errors noticed in the early design phase can be corrected with ease, but errors detected later in the process result in expensive adjustments. Therefore, early involvement of logistics in the design phase not only could save cost and lead time, but also increase efficiency and effectiveness of the logistics functions. Volvo Group understand that the importance of the business does not end after delivering the vehicles to the customers, but also how to ensure the vehicles continue operating safely on the road through its excellent, quick, first-class technical solutions. There has been an increasing awareness in Volvo Group to improve their aftermarket logistics operation and intend to adopt requirements of their aftermarket logistics starting from the early product development phases. They have identified the need to include functions of commercial packaging, transport packaging, dangerous goods, warehousing, and customs and trade. These functions form the core of Service Market Logistics (SML) department which handles aftermarket logistics in Volvo Group. The purpose of this Thesis is to exhibit the importance of aftermarket logistics involvement in the new product development (NPD) phase. A total of 31 interviews were conducted within the above mentioned SML functions. The results of the Thesis project is a summary of NPD phases in Volvo Group and a list of 25 requirements explained in matrix to answer the research questions related to the identification of requirements from SML department, alignment with NPD phases, and consequences of SML late involvement in product development activities.
New Product Development, aftermarket, inventory management, transport, packaging, dangerous goods, customs clearance, and logistics interface with product development
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