Supply Chain difficulties in the Operational Leasing industry : A case study of ALD Automotive

Abstract: Abstract In today’s competitive world companies strive to be best in class and at the same time have high revenue. They try to sell the best products, deliver the best service and at the same time reduce costs in order to make high profits. They strive for high efficiency at all levels of the organization as well as reduced costs where possible. This report examines a company in the operational leasing industry, ALD Automotive. The company is a part of Société Générale, a Financial Services company. ALD Automotive’s key business area is the leasing of vehicles to both small and large corporations. They also have a car dealership where they sell the used vehicles after a leasing period. The latter business area is the one that has been studied in this report, specifically the Supply Chain of the vehicles. ALD had been experiencing long lead times in the Supply Chain and this has affected the business badly. They wanted to investigate and identify problems as well as find a solution to improve the Supply Chain efficiency. The report discusses several theories regarding Supply Chain network such as Work in Process, lean thinking and value flows, and how these theories can be used at ALD. Further some theory regarding the implementation of a new Supply Chain network has been discussed, covering benefits of some implementation methods as well as pitfalls that may disrupt new solutions. The empirical results of the study showed how the different processes of the Supply Chain worked and where bottlenecks occurred. Further on the analysis part combined the theoretical framework with the empirical results to conclude the problem areas and discuss how they could be eradicated. The analysis emphasized three major problem areas: the information flow, the product flow and the booking system for transportation of vehicles. The end of the report discusses a new way of operating ALD’s Supply Chain which is based on the problem areas found in the study. The new solution is based on three layers covering all the different areas and explains which benefits the company will reap from implementing this new solution. There is also a description of cost and lead time saving in the conclusion that shows approximately the minimum savings that can be made by using our Supply Chain network method. Finally some limitations to the results and conclusions is discussed as well as future research that could further enhance the validity and reliability of this report.