Volvo Logistics Corporation Returnable Packaging System : a model for analysing cost savings when switching packaging system

This thesis is a study for analysing costs affected by packaging in a producing industry. The purpose is to develop a model that will calculate and present possible cost savings for the customer by using Volvo Logistics Corporations, VLC’s, returnable packaging instead of other packaging solutions. The thesis is based on qualitative data gained from both theoretical and empirical studies. The methodology for gaining information has been to study theoretical sources such as course literature and articles, as well as through interviews and consolidation with staff at Volvo Logistics Corporations office in Gothenburg. The model is constructed in Microsoft Excel and consists of six different sheets. The first sheet is a front page that summarises the costs calculated in the other sheets and presents the possible cost savings. After the front page there are three sheets with calculations for the costs in different scenarios, Today’s Situation, VLC Packaging Solution (Pre implementation) and VLC Packaging Solution (Post implementation). The first sheet, Today’s Situation, presents the result of the model that will calculate the customers’ current costs that are associated with packaging. The different costs presented in the model are costs for unloading, repacking, today’s cost for an internal packaging solution, quality related costs, one-way packaging costs and the costs for other packaging solutions. The next sheet, VLC Packaging Solution (Pre), presents an estimation of the cost for thecustomer when using VLC’s returnable packaging system. The estimation will serve as an investment tool, for calculating possible cost savings compared to the present situation. The different costs that will be discussed are handling costs, quality related costs, distribution cost, transaction cost, and investment cost. The third and final calculation sheet, VLC Packaging Solution (Post), presents the actual costs for the customer after the implementation. When the costs have been calculated they will be used to evaluate the actual cost savings for the customer. The last two sheets are a data sheet, which consists of data needed for the calculations in the previous sheets, and an instruction sheet where there are instructions to the different calculations in the model. The conclusion shows that the objective to create a model for calculating the costs for different packaging systems and present possible cost savings is fulfilled