Optimizing Spare Parts Management: A Case Study of Volvo Cars

Abstract

Managing spare parts effectively is crucial in order to maintain uninterrupted production and make better investment decisions in the future of machines and robotics. Therefore, this thesis examines how Volvo Cars can improve its spare parts management by adopting predictive maintenance and enhancing the connection between machines, projects and spare parts. With the help of models such as Economic Order Quantity (EOQ), Safety Stock (SS) and Reorder Point (ROP) Volvo can better align its inventory and therefore help to avoid overstocking, while reducing costs. In addition, the study highlights the importance of linking spare parts to specific projects, because it allows a more accurate allocation of costs and provides a better understanding of the demand and usage patterns of spare parts. Which leads to better decision making for future investments. There are also previous studies of how much money should be spent on spare parts relative to the Replacement Asset Value (RAV). These values might help Volvo Cars position themselves on the range to see if the position is in line with the idea.