Competitive Internal Logistics Systems Through Automation
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Mälardalen University Press Licentiate Theses No. 137 COMPETITIVE INTERNAL LOGISTICS SYSTEMS THROUGH AUTOMATION Anna Granlund 2011 School of Innovation, Design and Engineering The growing demand for products and services puts great pressure on logistics performance and enhances the role that logistics plays in determining a company’s competitiveness. This research focuses on internal logistics systems, which includes all logistics activities and processes within the physical limits of an isolated company. Internal logistics is vital for the overall function of many companies. However, despite its importance, this part of logistics has traditionally not been viewed or developed in a strategic way. Since internal logistics activities are often characterized by a high degree of manual handling and hence strongly affect the cost of operations, there is a large incentive for improvements in this area. One possible way to improve an internal logistics system is with the help of automation. In many areas, automation is a well-known means to increase productivity and cut costs, thus improving competitiveness. However, automation is not commonly used within internal logistics activities, and there is a lack of knowledge and research within this new application area. The main objective of this research, therefore, is to contribute to an increased understanding of how automation can be used to develop competitive internal logistics systems. Four empirical studies have been performed to investigate how companies perceive and work with their internal logistics systems, specifically in terms of improvements using automation. The empirical studies also aimed at identifying and describing how the studied companies could benefit from automation within internal logistics activities. From the studies, the importance of assessing and being aware of the current state of logistics performance was discovered as a basic requirement that needs to be fulfilled before conducting improvement work. Further, one of the main overall conclusions from this research is the need for a logistics strategy that includes goals and plans for the operation and development of an internal logistics system. As a result of the research, a structure and procedure for the development of an internal logistics strategy and a framework for conducting an improvement process in internal logistics using automation were developed. Copyright © Anna Granlund, 2011 ISBN 978-91-7485-017-8 ISSN 1651-9256 Printed by Mälardalen University, Västerås, Sweden i The growing demand for products and services puts great pressure on logistics performance and enhances the role that logistics plays in determining a company’s competitiveness. This research focuses on internal logistics systems, which includes all logistics activities and processes within the physical limits of an isolated company. Internal logistics is vital for the overall function of many companies. However, despite its importance, this part of logistics has traditionally not been viewed or developed in a strategic way. Since internal logistics activities are often characterized by a high degree of manual handling and hence strongly affect the cost of operations, there is a large incentive for improvements in this area. One possible way to improve an internal logistics system is with the help of automation. In many areas, automation is a well-known means to increase productivity and cut costs, thus improving competitiveness. However, automation is not commonly used within internal logistics activities, and there is a lack of knowledge and research within this new application area. The main objective of this research, therefore, is to contribute to an increased understanding of how automation can be used to develop competitive internal logistics systems. Four empirical studies have been performed to investigate how companies perceive and work with their internal logistics systems, specifically in terms of improvements using automation. The empirical studies also aimed at identifying and describing how the studied companies could benefit from automation within internal logistics activities. From the studies, the importance of assessing and being aware of the current state of logistics performance was discovered as a basic requirement that needs to be fulfilled before conducting improvement work. Further, one of the main overall conclusions from this research is the need for a logistics strategy that includes goals and plans for the operation and development of an internal logistics system. As a result of the research, a structure and procedure for the development of an internal logistics strategy and a framework for conducting an improvement process in internal logistics using automation were developed. i I would like to start with expressing my gratitude to my supervisor Professor Mats Jackson for your encouragement, energy and ever inspiring and helpful ideas. I would also like to thank my assistant supervisor Associate Professor Magnus Wiktorsson for your guidance, co-writing and support along the way. Further, I would like to thank all my colleges at IDT in Eskilstuna for a joyful place of work and all the members of the research school IPR for an inspiring and instructive research environment. Special thanks go to my closest colleges and friends: Erik Hellström, Anders Wikström, Karin Romvall, Petra Edoff, Dr. Antti Salonen, Joakim Eriksson, Mikael Hedelind, David Akpone, Patrick Phua, Daniel Gåsvaer, Lisa Gustafsson, and Caroline Runius for your constant support and for brightening up my days both at and outside work. I would also like to thank the members in the research project Lean Automation for inspirational collaboration, and Vinnova through Robotdalen for financing this research. I would also like to express my deep gratitude to all the companies and organizations that have participated in the studies, especially the employees that have contributed with their time and knowledge and hence enabled this research. Last, but not least, I would like to send my love to my wonderful two families and to all my friends for supporting me in my life both inside and outside the academia, and for making me remember the important things in life. Special tanks to my mother Kerstin and father Hasse for always caring. To my sister Åsa for your inspirational drive, and to my nephew Alec for being my little ray of sunshine that always make me smile. Thank you to all my friends for giving me a place to, when needed, forget about work. Finally, my warmest gratitude goes to my dear Christian for your endless support, comfort, love, and understanding. Jag älskar dig! Anna Granlund Eskilstuna, May 2011 ii iii I would like to start with expressing my gratitude to my supervisor Professor Mats Jackson for your encouragement, energy and ever inspiring and helpful ideas. I would also like to thank my assistant supervisor Associate Professor Magnus Wiktorsson for your guidance, co-writing and support along the way. Further, I would like to thank all my colleges at IDT in Eskilstuna for a joyful place of work and all the members of the research school IPR for an inspiring and instructive research environment. Special thanks go to my closest colleges and friends: Erik Hellström, Anders Wikström, Karin Romvall, Petra Edoff, Dr. Antti Salonen, Joakim Eriksson, Mikael Hedelind, David Akpone, Patrick Phua, Daniel Gåsvaer, Lisa Gustafsson, and Caroline Runius for your constant support and for brightening up my days both at and outside work. I would also like to thank the members in the research project Lean Automation for inspirational collaboration, and Vinnova through Robotdalen for financing this research. I would also like to express my deep gratitude to all the companies and organizations that have participated in the studies, especially the employees that have contributed with their time and knowledge and hence enabled this research. Last, but not least, I would like to send my love to my wonderful two families and to all my friends for supporting me in my life both inside and outside the academia, and for making me remember the important things in life. Special tanks to my mother Kerstin and father Hasse for always caring. To my sister Åsa for your inspirational drive, and to my nephew Alec for being my little ray of sunshine that always make me smile. Thank you to all my friends for giving me a place to, when needed, forget about work. Finally, my warmest gratitude goes to my dear Christian for your endless support, comfort, love, and understanding. Jag älskar dig! Anna Granlund Eskilstuna, May 2011 ii iii This thesis is based on the work presented in the four publications listed below. The author of the thesis initiated and had the main responsibility for the writing of all appended papers. The papers are appended in full, and are referred to in the text by Roman numbers. Granlund, A. and M. Jackson (2008) Logistics Automation - an Enabler for Competing. In Management in Logistics Networks and Nodes, the Proceedings of Hamburg International Conference of Logistics 2008, 4-5 September, Hamburg, Germany. Granlund, A. (2011) Resource Efficiency in Internal Logistics: a Survey on Objectives and Performance. In the Proceedings of the 4th International Swedish Production Symposium, 3-5 May, Lund, Sweden. Granlund, A. and M. Wiktorsson (2011) Automation in Healthcare Internal Logistics: A Case Study on Practice and Potential. Accepted for publication in International Journal of Innovation and Technology Management. Granlund, A., M. Hedelind, M. Wiktorsson, A. Hällkvist and M. Jackson (2009) Realizing a Factory-in-a-Box Solution in a Local Manufacturing Environment. In the Proceedings of the 42nd CIRP Conference on Manufacturing Systems, 3-5 June, Grenoble, France. Wiktorsson, M., A. Granlund and M. Bellgran (2009) Reducing Environmental Impact from Manufacturing: Three Industrial Cases for the Manufacturing of “Green” Products. In the Proceedings of the 42nd CIRP Conference on Manufacturing Systems, 3-5 June, Grenoble, France. iv v This thesis is based on the work presented in the four publications listed below. The author of the thesis initiated and had the main responsibility for the writing of all appended papers.