Analysis, selection and application of costing approach providing a transparent breakdown of the variety-induced complexity in the automobile inbound logistics cost calculation for the purpose of anticipative logistics planning at the OEM

Abstract

Product innovations, globalization, accelerated product life cycles, electrification, sustainability, autonomous driving, connectivity, delivery shortages in the supply chain, increased competition due to market saturation and increasing customer requirements are just a few examples of the wide range of challenges the automotive industry is facing nowadays. Especially the customer demands for individuality and his behavior with respect to lifestyle, travel, and luxury underwent a tremendous change and therefore vary broadly, which in turn affects the automotive environment widely. In order to generate individual, unique, and consumer-specific products the Original equipment manufacturers (OEM) have enlarged their offer on models and configurable options considerably. As a result, the product variety has increased to an almost infinite number of options and thus becoming unmanageable. The exploding number of product variants affects the logistics, being a vital element in the automotive sector, significantly. In particular, the inbound logistics systems respond to this impact by increasing costs and declining performance. It appears that currently used logistical cost calculation at one of the Premium OEM ́s is not sufficient to meet the demands of the modern complexity and variant management, which is in turn an important tool for managing of the product variants. Hence, the analysis, evaluation and selection of the proper cost calculation method allowing to allocate variety-induced logistics costs – the latter often considered as hidden costs of doing business – to the individual product variants is performed within the framework of this research. This thesis aims to find suitable cost calculation method to fill the gap in the missing link between the product variety-induced complexity and logistics costs accrued in the automotive inbound logistics at OEM-level. This model-based approach shall serve as an active complexity a variant management tool for the purpose of supporting product variety decisions at an early stage in the product design phase. The practicability of this method is demonstrated in the case study performed for the rear bumper system.