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2010:015 CIV

MASTER'S THESIS

Cost calculation and process improvement for the introduction of new included parts at Volvo Powertrain in Köping

Andreas Nordh

Luleå University of Technology MSc Programmes in Engineering Industrial Business Administration Department of Business Administration and Social Sciences Division of Industrial Logistics 2010:015 CIV - ISSN: 1402-1617 - ISRN: LTU-EX--10/015--SE

PREFACE
This thesis is my last assignment and will allow me to receive my Master’s degree in Industrial engineering and management at Luleå University of Technology. The subject of this thesis and the problem range has improved my comprehension of logistics from an administrative point of view and provided further knowledge in working in a Lean environment. I believe that the awareness of administrative process costs and visual process maps are a given for lasting improvement in becoming a Lean organization. I would like to take this opportunity and thank people that have helped me through this process. Firstly, I would like to thank Klas Rehnberg at Volvo Powertrain for giving me the chance in writing my master thesis at such a huge global corporation like Volvo Group. Unfortunately Klas could not guide me towards the end of the thesis and had to hand over the responsibility to Patrik Björklind, at Product preparation, due to a new job at Bombardier. I would like to thank Patrik Björklind in supporting me towards the end. I would also like to thank my mentor at Luleå Univesity of Technology, Peter Wallström, for his support and guidance in this very last project of my university studies.

Luleå, January 2010

Andreas Nordh

I

ABSTRACT
Product development is one of the most important factors in whether the company will be a market leader or a market follower. By continuously improve the product and satisfy customer needs, there is importance in well managed implementation of updates of the product. These updates create an administrative process which, at Volvo Powertrain in Köping where the thesis was written, is in need of improvements. Process improvements are made possible by mapping a process and from an overview perspective eliminate unnecessary activities. Moreover, in continuous process improvement there is need for process management. Process management treats a process in form of roles and responsibility as a foundation of process survival in the long run. However, every process, whether administrative or manufacturing, is a cost for the company and a part of improving a process and eliminating waste is a way of reducing unnecessary cost. The purpose of this thesis is: …to calculate a template cost for implementation and preparation of a new included part at Volvo Powertrain in Köping. Moreover, a process map is going to be conducted to get an overlook of the process in order to recommend process improvements to minimize the yearly process cost. By combination of literature review, interviews at Volvo Powertrain, secondary data, and a comparing study of process management at SKF, a process map was conducted. The process map gave an overview of the process of implementing updates in the end product. Furthermore, by studying the process map unnecessary activities were discovered. These unnecessary activities were cost bearers and by eliminating these, monetary savings could be made in the process. Moreover, there were problems regarding process management as there were no implemented roles in the process. By illuminating the need of role descriptions and responsibility in the process, Volvo Powertrain in Köping were recommended to conduct role descriptions for every employee in the process. By doing this Volvo Powertrain have savings potential in securing the process get positive key performance indicators instead of the current negative. As there were no process owners at Volvo Powertrain in Köping, there were no top responsibilities with the power in decision making which, on every level in...
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