The Volvo plant produces more than 1,000 cars per day, 24/24 hours and five days per week. Volvo operates with a time on task of 74 seconds (the time that is needed to repeat the same activity on the assembly line). The growing complexity as a result of the expansion of the number of variants was the reason for Volvo to seek a strong logistics partner. To give an idea: an average of only one and the same Volvo is built every three weeks. The production line remains nonetheless just as long so that certain activities need to move forward in the production chain. Volvo decided therefore to align itself closer around a number of first tier suppliers. As part of that initiative, it was also decided that DSV should perform some activities, such as stock holding and picking off-line. For that purpose, DSV invested a sum of over 30 million Euros.
In the mega complex in the Langerbruggestraat in Gent, DSV picks both body parts for the XC60 and parts for final assembly. For this end, each day 70 trucks with a variety of pallets and containers are unloaded at DSV. There are more than 3,300 SKUs on 25,000 different locations. The average stock is 3 working days. Every day there are about 185,000 picks at a rate of 2.2 picks per second. This leads to no less than one million transactions per day. Given the change in packaging when shipping to Volvo, this corresponds to a volume of 204 trucks per day.
Jurgen Lernout, managing director of DSV Solutions Belgium: “We are talking about a large variety of components. To give an example: for the C30, S40 and V50 there are a dozen different types of water containers. The launch of the Volvo XC60 leads to about 250 steering wheel variants in the Volvo range. Some of the pieces that need to be handled are visible parts (coachwork, mirrors, headlights, etc.), other technical components (airbags, brakes, etc.) the consumer - hopefully – never gets to see. You can imagine that for Volvo it is a hopeless task to stock all those parts at the assembly line.”
The number of errors that DSV can afford in delivery is minimal: from nil to a maximum of 50 ppm (parts per million). To ensure this high reliability, the introduction of a new software platform to support warehouse operations was a necessity. Eventually, about one to two percent of the capital outlay went to the new WMS.
Erwin Tollenaere, director IBS Dynaman says: “What mattered most to Volvo was that the software needed to be very strong in terms of supporting production activities. The fact that Volvo chose for IBS Dynaman has everything to do with the fact that our software is able to integrate WMS and MES functionality seamlessly. We offer MES as a module of our WMS. Moreover, it is possible to activate the MES on different levels. For DSV, we could fully exploit the functionality. We also notice that more and more warehouse environments have to deal with production related activities and, although often to a limited extent, benefit from MES functionality.”
JIS, more than JIT
Specifically, DSV needs to deliver the correct parts at the right time, in the right place and the right number for the cars as they are programmed in production. This way, the Volvo employees can assemble the pieces with a minimum of assembly operations. DSV first executes a strict quality control when the parts arrive in the warehouse. Then, the components are placed on a suitable location, which can range from a small rack location to a full pallet location. The pick locations are supplied from the buffer locations. After picking, DSV sends the parts to Volvo.
The execution of warehouse activities involves various validation methods. J. Lernout: “The principles that we use in delivery to Volvo are kanban, just in time and sequencing in line. For the body parts of the XC60, we use Kanban, inside and outside the automotive world a well-known principle by which - simply put - an empty box is replaced by a full one. Of course, things have evolved a lot since then. We no longer wait until the box is empty, but the software system keeps accurate track of the consumption and we get an electronic notification when it is time to supply. For final assembly pieces both the JIS and JIT principles are used. Just in time (JIT) means that Volvo only receives that what it needs at a particular point. By supplying just in sequence (JIS) or just in line (JIL), Volvo will also receive each piece in the correct order of production on the assembly line. We also keep the same pace as Volvo, i.e. 74 seconds. If we do not manage to pick the necessary parts within that pace, we split picking over several people. This is called estafette picking. During picking we place the components in the correct sequence within the special sequence racks. These racks are used in transportation to Volvo and are ergonomically optimised for pickers and mechanics. Every day, about 2,500 sequence racks leave the warehouse heading for Volvo.”
A very specific activity that DSV performs for Volvo is the assembly of certain parts that sometimes also need to be delivered just in sequence to the assembly line, e.g. the cooler pack. That is the entire cooling system of the engine and air conditioning, consisting of components like fans, oil coolers and pipes. That activity also requires specific support from the WMS/MES in terms of electronic information processing and management of the BOM (bill of materials). Finally, DSV also responds to the demand for kitting, a new trend in the automotive world.
J. Lernout: “Kitting means that we gather a number of components that will be used on different work stations in one kit, which follows the assembly line. The advantage for Volvo is that the assembly line workers no longer need to walk long distances to get all the necessary parts together. This also means that there is an extra check to make sure that all required parts will actually be built in. If the assembly happened correctly, there should be no kit leftovers. When putting together the kits, picking is usually executed in estafette. We take pictures of the contents of each kit, in several phases and before departure, so we are one hundred percent sure of which parts have left here.”
E. Tollenaere: “In our WMS, we can distinguish inbound, storage and integration of production. These activities are driven by EDI messages, whether or not by the Odette standard, and ASNs (Advanced Shipping Notice) of products delivered. We work with so-called syncro’s which steer the vehicles with all their characteristics through the system at a pace of 74 seconds. This is translated to racks and product groups to allow DSV to pick the right things. If necessary, production orders can be executed as well. It was important that we could take into account that this pace is sometimes disrupted, e.g. because of a halt in the production line at Volvo. If that happens, Volvo wants DSV to stop supplying for a moment and then to resume the thread. That is why we keep track of the production line at Volvo every five minutes by means of a tracking device so that we can respond in time. To optimise certain issues at Volvo, we have placed a so-called operator stage on the production floor. At the machine, the worker receives a very user-friendly tool to register certain things for us. For replenishment of small grab parts, there are push buttons near the assembly line which generate an electronic message to DSV, after which DSV will supply the relevant parts within forty minutes. For parts that are delivered in sequence, DSV has about four hours time.”
Plans for the future
“Meanwhile DSV has also begun with the support of Volvo suppliers for both logistics and production. Besides coating of plastic parts we will soon start with injection molding activities. It is obvious that such projects are managed in close collaboration with suppliers and Volvo”, Jurgen Lernout concludes. “If we should receive additional questions in the future, then we are ready to respond to them successfully thanks to our WMS.”