Volkswagen Group Logistics Applies Operations Research to Optimize Supplier Development

Sönke Wieczorrek (), Christian Thies (), Christian Weckenborg (), Martin Grunewald () and Thomas S. Spengler ()
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Sönke Wieczorrek: Volkswagen AG, 38440 Wolfsburg, Germany; Institute of Automotive Management and Industrial Production, Technische Universität Braunschweig, 38106 Braunschweig, Germany
Christian Thies: Resilient and Sustainable Operations and Supply Chain Management Group, Hamburg University of Technology, 21073 Hamburg, Germany
Christian Weckenborg: Institute of Automotive Management and Industrial Production, Technische Universität Braunschweig, 38106 Braunschweig, Germany
Martin Grunewald: Volkswagen AG, 38440 Wolfsburg, Germany
Thomas S. Spengler: Institute of Automotive Management and Industrial Production, Technische Universität Braunschweig, 38106 Braunschweig, Germany

Interfaces, 2024, vol. 54, issue 2, 147-161

Abstract: Volkswagen Group Logistics (VWGL) is responsible for the logistics and supply processes of the automotive brands of the Volkswagen Group. In this context, supplier development is vital for efficient and reliable material flows between the process partners. In recent years, VWGL implemented a collaborative approach for supplier development in logistics wherein it is crucial to identify disrupting suppliers and apply improvement measures to increase their logistics performance. Against this background, VWGL initiated a project to examine how supplier development measures can be implemented efficiently to improve the overall logistics performance of VWGL’s supply base. This paper presents the developed operations research approach, which integrates Monte Carlo simulation and a knapsack model on the specific problem of supplier development. The approach consists of three stages: (1) data preparation, (2) measure evaluation, and (3) measure allocation. The approach is validated based on 18 existing less-than-truckload networks of VWGL. We find that, on average, considerable cost savings of 31% can be achieved throughout the networks compared with VWGL’s previous procedure. A new workflow facilitates our approach to lift its potential in practical application sustainably.

Keywords: supplier development; inbound logistics; automotive; Monte Carlo simulation (search for similar items in EconPapers)
Date: 2024
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