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Volvo's supplier parc for the Torslanda plant 

Eight large suppliers have located operations closer to Volvo Car Corporation's Torslanda plant in Göteborg and the old shipyard area is revitalized and seething with life again. The redevelopment of the area has taken two and a half years, during which time Volvo Car Corporation, Volvo-owned real estate company, Danafjord, and the eight suppliers have jointly invested SEK 620 million in the new Industrial Park. Some 300 new jobs have already been created and 130 more are planned before the end of the year.

In Arendal, which is located about 3 km from the Torslanda plant, eight of Volvo Car Corporation's main suppliers have established themselves on a 35,000 square-meter factory area. The eight are: Becker Group Europe, Borgers Nord, Delphi Automotive Systems Sweden AB, Hydro Raufoss Automotive, Lear Corporation Interior Systems, Rieter Automotive Systems, Tenneco Automation Sweden and Walbro Automotive AS.

  

Larger modules and more efficient production

The aim of the Industrial Park is to assure a higher level of completed modules to be delivered on a sequential basis to the production of the new Volvo S80 at the company's Torslanda plant.

"Customers want to be able to specify exactly how their cars are to be equipped, but are not prepared to wait for longer periods than previously. This places major demands on us to increase the flexibility and speed of our production," says Hans Gustavsson, Senior Vice President, Research, Development and Sourcing at Volvo Car Corporation.

"Volvo Car Corporation is the leader in customer order-controlled production, which means that the development of sequential deliveries and modular concepts are two key factors for us.

Today, components are delivered as large units, or modules, in order to reduce assembly time. Nearly 60 percent of the value of the materials used in the new Volvo S80 is delivered on a sequential basis to the plant, in accordance with the just-in-time principle.

In addition to sequential deliveries from the Arendal Industrial Park, the Volvo S80's engines and gearboxes are delivered sequentially from the Volvo Car plant in Bulycke, Torslanda.

Arendal's close proximity to Torslanda is an important factor. The distance is just 3 km and this provides major savings.

"Door to door, it takes only ten minutes and we estimate that this will enable transport costs to be cut by SEK 4 million annually, compared with the earlier system," says Gustavsson. "Four hours before the car body is placed on the assembly line at the Torslanda plant, we send the final order via computer to the suppliers in Arendal. They then have between three and a half and nine hours to deliver the complete modules in sequence to the correct work station in Torslanda."

Lower costs and reduced environmental impact

The concept of sequence deliveries is nothing new to Volvo. Both the Belgian plant in Gent and the Torslanda plant have used sequence deliveries since the mid-1980s, although not to the same extent as now, with the production of the Volvo S80.

The establishment of suppliers close to the final assembly plant in Torslanda offers a number of advantages:

1. Lower transport costs as a result of shorter distances and coordinated transports.
2. Minimal load on the road network in the region.
3. Reduced impact on the environment.
4. Reduced investment in special packaging

A common denominator for the eight suppliers in Arendal is that they all deliver components and modules in large volumes, which are delivered in many varieties and forms.

The following materials are delivered from Arendal:

Becker Group Europe

inner roofing and tunnel consoles

Borgers Nord

hat shelves and baggage compartments

Delphi Automotive Systems Sweden AB

electrical distribution systems

Hydro Raufoss Automotive

complete fenders

Lear Corporation Interior Systems

instrument panels/door panels

Rieter Automotive Systems

carpets

Tenneco Automotive Sweden

exhaust systems

Walbro Automotive AS

fuel tanks

Several of the suppliers will also establish their own development facilities at Arendal.

A total of SEK 620 million has been invested in the Arendal Industrial Park. During the construction period, Volvo Car and Volvo-owned real estate company, Danafjord, invested a total of SEK 250 million and the eight suppliers invested the remaining SEK 370 million.

The Arendal Industrial Park will continue to grow in the future and when fully developed will accommodate 12 suppliers. A similar investment is currently in progress in the vicinity of the Volvo Car plant in Gent, Belgium.

Facts about the Industrial Park in Arendal:

Current number of suppliers:

8

Plant area:

35.000 m2

Distance from Volvo's plant at Torslanda:

3 km

Number of employees:

about 300 persons, June 1998
about 430, year-end 1998

Annual value of deliveries:

SEK 2.5 billion

(June 1998)

Source: Volvo Car  Corp.


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