Lean Remanufacturing : Material Flows at Volvo Parts Flen

University essay from Uppsala universitet/Företagsekonomiska institutionen; Uppsala universitet/Företagsekonomiska institutionen

Abstract:

The after market is of great importance of a company’s competitiveness and an increasing part of its revenues can be derived from it. Remanufacturing, in focus of this thesis, is a great business opportunity and the European market has an enormous growth potential. In the USA it is a major business and the automotive industry, targeted in this thesis, sells approximately 60 million remanufactured automotive products compared to 15 million products in Europe for an equivalent stock of vehicles

Compared to manufacturing, the remanufacturing environment is a more complex business due to the high degree of uncertainty in the production process, mainly caused by two factors: the quantity and quality of returned cores. Overall, seven characteristics that make the remanufacturing material flow harder to control have been identified. Emerging in the 1990’s the concept of Lean production is a well-known method for improving the manufacturing capabilities of a company. Lean production, which is said to increase productivity, decrease lead-time and costs and enhance quality, is widely adopted.

In this thesis, the purpose is to explore what characteristics of the remanufacturing environment that can hinder the implementation of Lean production principles of material flows and how Lean principles can be employed in a remanufacturing environment.

In accordance, the theories of Lean production and Remanufacturing are used and the research methodology chosen that of a case study. To assess material flow, the production flows of five major product groups in a car engine are assessed. For the collection of data, Value Stream Mapping (VSM) methodology has been used.

The main result about material flows and how Lean principles can be employed in a remanufacturing environment have resulted in eight generic proposals. The main conclusion from these proposals is that the inherent characteristics of variable processing times and uncertainty in materials recovered have major negative impact for implementing a lean production process. Vice versa, given an accurate supply of parts for reassembly, all the principles of Lean production can be fully implemented in the phases of reassembly and testing.

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