<p><strong>Executive Summary</strong></p><p>This final thesis has examined the effects of an increased centralization and better coord­in­ation of the distribution logistics at ABB in Västerås. The company is today strongly decent­ralized and there is a minimum of collaboration between the 20 business units. This is why the questions were raised; how could the business units coordinate outbound logistic activities and what effects would that provide. The obj­ect­ive of this final thesis is to provide basic data for a future decision-making which desc­r­ibe these effects.</p><p>The report has mapped out the factors that are important to ABB in an evaluation of their logistic activities and how the outbound logistics work today. The four factors are cost efficiency, delivery service, environmental impact and logistics capability. It was noticed that the degree of collaboration was very low and the business units send their goods in three main directions: Gothenburg, Arlanda and Europe (except for deliveries within the Nordic countries). Today it is only the goods towards Arlanda which are joint­ly transported. In the other directions there are only a few business units who collaborate.</p><p>Beside the primal task to negotiate general transport­ation agreements, the central logistic function (GFSM) at ABB has only a supporting roll in the work concerning logistics. The reason is not just that the business units have the real mandate over the logistics but also that the logistic focus in general is low. Furthermore is it hard for the freight managers (FM) at each business unit to change and improve the logistics, because they have other tasks to manage but also since their logistics skills in many cases are poor. The demands on the freight man­agers are also not expressed clearly enough and therefore they don’t know what is expected of them in their rolls as freight managers.</p><p>Three development directions were identified and expressed as scenarios, see table 1. <em>Scenario 1</em> represents an increased focus on the logistics and more distinct rolls for the GFSM and the FMs. <em>Scenario 2</em> addresses an increased coordination of the physical flow of goods (exemplified as a consolidation of all truck transportations toward Gothenburg) where the freight managers are in charge of this coordination. <em>Scen­ario 3</em> is a combi­nation of the first and second scenario and represents a centralization of the outbound logistics (exemplified as train with containers to Gothenburg).</p><p>The conclusion was that:</p><p>-   <em>Scenario 1</em> entails an increased transparency, communication and central management with positive effects on costs, delivery service and on the environment in the long run. The scenario becomes a prerequisite for the execution of the two others. Therefore is it the first step for ABB if they wish to increase their coordination of physical goods or centralize their logistics operations.</p><p>-   <em>Scenario 2</em> envolves cost savings by a good 50 % because the collecting of the goods takes place at each business unit (unchanged amount of handling). These changes are something to attain since it, in addition to the cost savings, can imply an improved delivery service and doesn’t increase the emissions of CO₂ compared with today!</p><p>-   <em>Scenario 3</em> results in a cost impairment since the cost reductions are too small for the distance Västerås-Gothenburg and are eliminated by the increased costs for handling of goods, warehousing and internal transportation. Nevertheless is train transportation within Sw­eden preferable out of an environmental perspective. All aspects considered, this scen­ario must consolidate more flows of goods and secure already existing knowledge before it becomes interesting to realize.</p>

Executive Summary This final thesis has examined the effects of an increased centralization and better coord­in­ation of the distribution logistics at ABB in Västerås. The company is today strongly decent­ralized and there is a minimum of collaboration between the 20 business units. This is why the questions were raised; how could the business units coordinate outbound logistic activities and what effects would that provide. The obj­ect­ive of this final thesis is to provide basic data for a future decision-making which desc­r­ibe these effects. The report has mapped out the factors that are important to ABB in an evaluation of their logistic activities and how the outbound logistics work today. The four factors are cost efficiency, delivery service, environmental impact and logistics capability. It was noticed that the degree of collaboration was very low and the business units send their goods in three main directions: Gothenburg, Arlanda and Europe (except for deliveries within the Nordic countries). Today it is only the goods towards Arlanda which are joint­ly transported. In the other directions there are only a few business units who collaborate. Beside the primal task to negotiate general transport­ation agreements, the central logistic function (GFSM) at ABB has only a supporting roll in the work concerning logistics. The reason is not just that the business units have the real mandate over the logistics but also that the logistic focus in general is low. Furthermore is it hard for the freight managers (FM) at each business unit to change and improve the logistics, because they have other tasks to manage but also since their logistics skills in many cases are poor. The demands on the freight man­agers are also not expressed clearly enough and therefore they don’t know what is expected of them in their rolls as freight managers. Three development directions were identified and expressed as scenarios, see table 1. Scenario 1 represents an increased focus on the logistics and more distinct rolls for the GFSM and the FMs. Scenario 2 addresses an increased coordination of the physical flow of goods (exemplified as a consolidation of all truck transportations toward Gothenburg) where the freight managers are in charge of this coordination. Scen­ario 3 is a combi­nation of the first and second scenario and represents a centralization of the outbound logistics (exemplified as train with containers to Gothenburg). The conclusion was that: -   Scenario 1 entails an increased transparency, communication and central management with positive effects on costs, delivery service and on the environment in the long run. The scenario becomes a prerequisite for the execution of the two others. Therefore is it the first step for ABB if they wish to increase their coordination of physical goods or centralize their logistics operations. -   Scenario 2 envolves cost savings by a good 50 % because the collecting of the goods takes place at each business unit (unchanged amount of handling). These changes are something to attain since it, in addition to the cost savings, can imply an improved delivery service and doesn’t increase the emissions of CO2 compared with today! -   Scenario 3 results in a cost impairment since the cost reductions are too small for the distance Västerås-Gothenburg and are eliminated by the increased costs for handling of goods, warehousing and internal transportation. Nevertheless is train transportation within Sw­eden preferable out of an environmental perspective. All aspects considered, this scen­ario must consolidate more flows of goods and secure already existing knowledge before it becomes interesting to realize.