Challenge
When the Chinese group Geely became controlling shareholder in 2010 of Volvo Cars, the Swedish car manufacturer decided to radically change its logistics strategy. If Volvo Cars wanted to stay active in the highly competitive car market as an independent entity within Geely, expertise had to be developed in all strategic activities. Thus also in the logistics of finished vehicles. The majority of logistics activities, both inbound and outbound, used to be outsourced to a logistics service provider. Within a year, the complete outbound process had to be insourced: processes, operations, employees and IT.
Solution
Volvo Cars trusted on IBM and CLX Logistics for the implementation of a TMS (Transport Management System) as a SaaS solution (Software as a Service).
Results
- The expected savings have been exceeded with a factor of 5. “We monitor the number of issues that dealerships report to the service desk and a year after the go-live there are no more than 5 per week. That proves that the system works and that the dealerships have confidence in it. So we not only reduced costs but also significantly improved our service level. Of course some things went wrong during the implementation, but that is almost inevitable in a project of this size. A very important lesson we learned, is that in the whole organization the importance of master data has been terribly underestimated,” according to Converse.
- At this moment Volvo Cars is in the stabilization phase of its insource exercise. Now the basis has been established, the focus has shifted to further optimization possibilities. Also in the IT area different projects are still on the agenda.