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Analysis of Material & Tied-up Capital Flow in Inbound

This master thesis is performed on behalf of Volvo Group Trucks Operations Logistics Services in Eskilstuna, which is also the final part of the Master in Engineering program – Innovation, production and logistics at Mälardalen University. Logistics Services central warehouse in Eskilstuna ensures that parts are available all over the world, material is transported to the production facilities, packaging is available and vehicles are distributed to the dealers.

The current need is to reduce costs and improve the production process at the Inbound department. The aim of this project has been to analyze the current flow of materials and tied-up capital in the inbound flow and give improvement suggestions on reducing lead times and the tied-up capital, as well as give suggestions on common performance metrics for all the sub departments at Inbound.

The report is based on theoretical and empirical study, where the theory concerns the topics; logistics, lean philosophy and supply chain management. The empirical study was carried out by data collection through time measurements in the plant and by BEAT-report, observations and discussions with the operators, and interviews with production managers and process developers. The collected data was analyzed and the products in the flow were divided into groups, where the inbound material flow was mapped by the VSM tool.

Product groups were analyzed by amount of received material reports, quantity, value and lead time, and the product groups that tied the highest value were defined as well as where in the flow the value was located. For each sub department calculations on production capacity and utilization were performed to analyze the current state and be able to compare the departments with each other. The interviews contributed with knowledge to create a reliable and valid SWOT analysis for each sub department at Inbound, where common factors could be defined concerning deviations, performance metrics and other hidden problems, but also opportunities.

Finally, in this report the current state in the Inbound department has been analyzed. Products have been categorized into groups and the materials flow mapped. It has been defined where in the flow and how much value that is tied up, and by which product groups. Hidden problems and deviations have been brought up to surface. Improvement suggestions have been given concerning decreasing of lead times and the tied up value, and also suggestions on common performance metrics for all the sub departments have been given.
Source: Mälardalen University
Author: Askri, Anna

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