Volvo Logistics

Volvo Logistics
Creativity Talks - Vlerick Leuven 17/01/2012 - Veronique Van Damme / Miguel Van Opbroeck

Volvo Group products

Volvo Trucks Renault Trucks Mack Trucks UD Trucks

Construction
Buses Equipment Volvo Trucks
Mack Penta Volvo Aero

Volvo Logistics Corporation

Volvo Logistics

Our history

2008 Establishment of joint venture
2007 The Volvo Group acquires company with Eicher Motors.
Nissan Diesel (currently known as
1999 Volvo Cars is sold to the UD Trucks). 2012 The Volvo Group’s new
Ford Motor Company. organization comes into force. The
2007 The Volvo Group acquires vision is to become a world
2001 Volvo Group acquires Renault Lingong, Chinese manufacturer of leader in sustainable transport
Trucks and Mack Trucks. construction equipment. solutions.

Volvo Logistics

Our customer base stems from the Volvo
Group as well as from external companies
2010 (2009) Customer Base
Sales 1 BEUR (0,75) Volvo Group EXAMPLES

Customer savings 35 MEUR (38)
Transport precision 95%

Employees 1100 (900)
External
Sales split
By customer base By product
Em ballage Inbound
10% 53%

External
43% (40)

Volvo Group Outbound
57% 37%
(60%)

Volvo Logistics

Vision
The vision for VLC is to be recognized as the leading logistics partner
within the automotive, commercial transport industries

Mission
The mission is to deliver complete supply chain solutions that add
value for our customers worldwide

Volvo Logistics

Global business

Cost efficient growth requires global
processes

Year 2000 Year 2011

Cost efficient growth requires structure and standards
Volvo Logistics

4PL role of Volvo Logistics
an integrated working method with customers and providers

Customer • One interface
• with common working methods / KPIs
Single Point of Contact
• eliminating risk for sub-optimisation
VLC
Volvo Logistics
while providing economies of scale
Logistics
Logistics
Development
Development
• Continuous improvement model with tight
relations between logistics development,
contracting and operations

Operations Contracting
• Integrated meeting structure on
operational, tactical en strategic levels
• One IT solution for each process

Single Point of Contact
• Non-asset-based
• Supplier management

Volvo Logistics

Cooperation approach

Common business plan
Visions and strategies

Key Account Strategic Objective settings and follow-up
Manager
Follow-up of KPIs
Re-engineering and prioritization
Tactical
Continuous improvements
Long term forecast

Regular operational improvement
Operative Deviation handling
Operations
Follow-up and actions on operational KPIs
Short term forecast and launch planning

Volvo Logistics

Focus on Re-engineering

• Joint fora for re-engineering
Breakdown of cost savings activities
• Re-design of existing flows and
Logistics
logistics set-up Development

20 % 80 %
• Prioritization, top 10 list
• Yearly budget for development Rate Re-design and process
and innovation appr 25 M€ reductions improvements

Volvo Logistics

Focus on pre-operational system

Pre-operational System Operational System

Emballage
Concept
Inbound Outbound

Synergies Factory
Internal
Dealer
(or end
Sub-supplier / customer)
supplier Logistics

SCM Competence Center

“Only 20-30% of the logistics
“70-80% of the logistics cost
cost can be impacted in
is set by strategic decisions”
the operational system”

Future Supply Chain Focus is strategic, since the majority of the
cost is set by strategic decisions

Volvo Logistics

One voice towards Logistics Providers

670 suppliers (Group level)
21% (144) represent 90% of Spend

Volvo Logistics

…a reflection on how VLC approach our
providers…

“Strategic”
High 10
“Core Volume” • Long term alliances with
9 selected strategic suppliers
• Joint focus on total logistic
8
Cost, Not Price
Criticality of Purchasing

7 • Continuously improved service
& performance
6
•Use market benchmarks
(Internal)

5 to secure competitiveness!
“Competitive bidding lane”
4

3

2

1
“Bottleneck”
Low 0
0 1 2 3 4 5 6 7 8 9 10
Low Complexity of supply (External) High

Volvo Logistics

Competition&collaboration

Utilize customers’ and suppliers’ know-how
Further integration and collaboration

Asset Owners

Suppliers Management Plants
Dealers
VLC
Coordination Green OK/Plants

Physical movement

Competitors

Increase collaboration with all parties to develop our concepts
Volvo Logistics

Economies of scale and scope

Volvo Logistics Pricing Philosophy
Price/payload
2 examples :

- Deep sea container flows

- Distribution cars

1

2
Payload

Payload = recalculated weight or volume

Volvo Logistics

Passive office building
Windmills
X-docking consolidation effect

Volvo Logistics

B = 3,30 vs 2,50

Special intra port area flows

H = 4,76 vs 4,00

Volvo Logistics

Car yard consolidation effect
Volvo Logistics

Co-modality & multi-modality

Volvo Logistics

Our Core Values are integrated in all we do!

• Management System • Road Safety • Reduced Emissions
• Customer Satisfaction • Transportation Security • Carrier Development
• Continuous Improvements • Site Security • Environmental Assessment
• Process Orientation • Dangerous Goods • Site Related Environmental
Impacts
Volvo Logistics

Environmental challenges drive innovation !!
CO2 emissions Europe, road, rail, short sea
2006-2010 – 21%
CO2 [g/ton*km]
56,5 55,7

50,0 48,6
44,8
2006
2007
2008
2009
2010

2006 2007 2008 2009 2010

Environmental objective 2010
- 20% CO2 emissions 2010 g per ton km from land transports in Europe
(baseline 2006)
Volvo Logistics

Green & Safe Yards
How to get a green & safe image on the yard market ?

• multimodal connections (train, barge, roro)
• electrical yard service vehicles
• highest possible EUR level for yard machine engines
• automatic stop/go on yard machines
• alcolock on yard machines
• use “ad blue” compatible machines on yards
• use bio-fuel for the yard machines and vehicles
• On-shore Power Supply (OPS) on port facilities (study)
• performant waste management concept
• minimised energy consumption (mainly fuel and lighting)
• Yard Management System (YMS) to optimize movements of vehicles on the yard
•…………..

Volvo Logistics


Supply Chain Leadership
Knowledge and expertise are key

Concept
Development

Supply Chain
Synergies
Competence
& Value add
Centre

Volvo Logistics

We must persistently pursue ways
to jump ahead
of our own latest product or service

Volvo Logistics

1927 – Environmental friendly transports

Volvo Logistics

1928 – Loading cargo on a railway wagon

Volvo Logistics

1952
Extra long
vehicle
combination

Volvo Logistics

1980s - Emballage

Volvo Logistics

Wanted position 2012 Outbound

”We are using next generation tools to track & trace
finished vehicles by applying data capturing based
upon new technologies, (GPS,…….)”

Dealer
Distribution yard
Factory gate out Factory Yard Harbour Harbour Body builder
– Cross dock
Site delivery

Trying new ways of working….

Volvo Logistics

Track & Trace functionality
Exploring new innovative ways to track & trace finished Vehicles

Challenges Prototype idea

Explore new ways to track &
1. Provide visibilty & transparancy to end
customers independent of carrier trace finished vehicles
utilizing mobile applications
2. Mixed fleets of carriers
3. Different maturity level of the technology
used by the carriers
4. Finding cost effective track & trace desirability viability
human needs business needs
solutions suitable for all carriers

feasibility
Technical &
Organization

Volvo Logistics

- Smartphone price levels are decreasing

- Increased usage of smartphones:
The smartphone market is developing rapidly

- Implementation / Distribution of apps easier than
ever
- > 300,000 mobile apps have been developed in 3 years

Volvo Logistics

Benefits

• Reduce capital tied up
- Increase speed for invoicing

• Administration time saved at carrier back-office
- activities transferred to driver

• Remove printing yard picking lists

• Increased transparancy
- efficient planning next steps

• The app4D is easy to use and to understand
• Smartphone is a versatile- and cheap solution

Volvo Logistics

A glance into the App4D

Volvo Logistics

Load
Report load of truck

- Press ”Upload” to - Result screen of what
report load has been loaded is
displayed.

Volvo Logistics

ETA
Report/update Estimated Time of Arrival during transport

- Select the clock symbol to - Type in the date and time - After ETA have been set the
set the ETA (estimated Time of and press ”OK” confirmed load list is
Arrival) of the selected load. displayed.

Volvo Logistics

Delivery
Mark vehicles as delivered

- Start up the A4D application - A list is presented with the - Select ”OK” to mark the
& login vehicles that are loaded on vehicle(s) as delivered.
the truck.
- Press ”+” for the vechicle(s)
that have been delivered.

Volvo Logistics

Movie prototype Track & Trace App4D

Volvo Logistics

Key Succes factors

• Integrated approach
• Cooperation approach
• Utilize customers’ and suppliers’ know-how
• Focus on pre-operational system
• Focus on Re-engineering
• Environmental challenges drive innovation
• Right Mental Attitude

Volvo Logistics

Some EU logistic challenges (from a Flemish perspective)
• fluid implementation of Ecocombi ("EMS") for well defined flows

• administrative simplification of short sea shipping (SSS),
and establish a framework for granting pilot exemption cerificates for regular SSS lines

• knowledge of basic (transport) English of all EU truck drivers

• we support the co-modality vision and have big questions concerning the“forced”
targets (30% ex road in 2030 and >50% ex road in 2050) regarding modal shift

• modern and expanded rail infrastructure

• adapt the social legal frame to support night time deliveries
Volvo Logistics

Volvo Logistics

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