Drivers, consequences and actions for reverse logistics within the aftermarket A case study of Volvo Group

Examensarbete för masterexamen
Master Thesis
Supply chain management (MPSCM), MSc
Gustafsson Sagström, Jonas
Petersen, Arvid
Companies in the automotive industry cannot neglect the growing importance of the aftermarket as it is one of their main sources of profit. For automotive companies like the analyzed case company, the uptime of the vehicles is of the utmost importance for their customers, and balancing high availability of parts at the right cost is crucial. As the customer demand in the automotive aftermarket is highly stochastic and difficult to foresee, it is almost inevitable to avoid returns and the need for reverse logistics. However, the area of reverse logistics is generally not highly prioritized among industrial companies. Therefore the purpose of the thesis was to find and analyze underlying mechanisms that drive returns and its consequences that it has on the studied case company. This was done in order to find and target appropriate actions towards increasing the control of the reverse flow and reducing the amount of returns. To fulfill the purpose, data was collected from multiple sources; semi-structured interviews, internal documents, workshops and direct observations. The thesis focused on two return categories that contributed to the largest share of returns. It was identified that the current situation had not been evaluated before and that the return rate was higher than expected. It was also found that there were large variations in terms of return volumes both on national level and between dealers operating in the same country. When investigating the Swedish market more thoroughly and comparing the empirical findings with the theory, five drivers of reverse logistics were identified. These were Replenishment setup and performance, Key performance indicators, Return policies, Aftermarket context and return processes and Dealer behavior and planning capabilities. The underlying mechanisms of each driver were then analyzed in order to find appropriate actions. Key actions that the authors found were Improve delivery precision, Change return allowance parameters, Introduce returns vs. sales KPI and Increase communication and collaboration. The presented result of the thesis contributed to an understanding of the current return situation and actions that could be implemented to reduce the amount of returns. Moreover, the result gave valuable insight to the fact that returns could have the same drivers, but the underlying mechanisms and who owns the process to improve it can differ. The result also contributed with a logic that could be used to reduce the amount of returns further within the case company, in similar companies and in other industries.
Transport , Övrig industriell teknik och ekonomi , Transport , Other industrial engineering and economics
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