Volvo 2015 Annual Report Download - page 34

The Volvo Group has 66 production sites in 18
countries around the world. In addition to our pro-
duction sites, our industrial operations worldwide
include several product development centers, and
a large number of parts distribution centers and
logistics centers. With such a global spread we
have developed tools, processes and production systems to help
us set a global standard of excellence and guide our employees
on responsible behavior. Read about our health, safety and well-
being work for our employees on page 74.
Component factories and assembly plants
Our industrial system for trucks consists of capital-intensive com-
ponent factories as well as labor-intensive assembly plants. The
component factories supply the Group’s needs on a global basis
whereas assembly plants in most cases are located close to
end-markets to cater for different local needs and specifications.
Engine and transmission manufacturing are common for all
Volvo Group business lines. Köping, Sweden is a global hub for
heavy-duty transmissions.
When it comes to engines the Group has two major hubs –
Skövde, Sweden for heavy-duty diesel engines and Pithampur,
India for medium-duty engines. Medium-duty engines are also
supplied by the German engine manufacturer Deutz, primarily for
Volvo Construction Equipment.
For Volvo Construction Equipment, production is more central-
ized to a few larger hubs with the big wheel loaders and articu-
lated haulers being produced mainly in Sweden and excavators
mainly in South Korea.
Major restructuring completed
During 2014 and 2015 changes in our European industrial struc-
ture for truck assembly were implemented in order to enhance the
efficiency of our manufacturing and thus strengthen competitive-
ness. In Sweden, the cab trim operations were relocated from
Umeå to Gothenburg and the assembly of heavy-duty trucks was
concentrated to one line. In France, the assembly of medium-duty
trucks was concentrated to Blainville. During this period, produc-
tion in Japan underwent major changes with a phasing-out of non-
core operations and a consolidation of operations to Ageo, adapting
the capacity to the domestic demand of Japan and close markets.
With these changes completed the future direction of the truck
manufacturing is more focused on continuous improvements to drive
increased productivity rather than on large restructuring activities.
EFFICIENT AND RELIABLE
PRODUCTION
The Volvo Group has a global industrial and logistics system that is well-invested
and able to efficiently meet the demand from our customers.
Stronger structure through joint ventures
The Volvo Group industrial position has been strengthened in
many markets in Asia through the historical acquisitions of UD
Trucks and Lingong (SDLG) and the cooperation within trucks
and buses with India-based Eicher Motors. The acquisition of
45% of the Chinese manufacturer Dongfeng Commercial Vehi-
cles (DFCV), which was completed in January 2015, will contri-
bute further to this development. Through its acquisitions the
Volvo Group has also established a global industrial structure
with manu facturing as well as sales and distribution channels on
all continents.
Continuous improvements
In order to produce the best products on the market we are focus-
ing on reduced costs, improved quality and shorter lead times. We
are driving continuous improvement through the Volvo Production
System (VPS). VPS is used for many processes throughout the
organization, including production, product development, logistics
and administration. VPS uses methods that streamline operations
and minimize productivity losses. The system includes tools for
measuring and improving workplace safety, health and wellbeing.
At our production units, we have quality coordinators, safety
delegates and environmental coordinators and we measure and
monitor to continuously improve.
MANAGEMENT SYSTEMS
All the Volvo Group’s wholly-owned production facili-
ties and distribution centers are third-party audited.
We hold certificates as follows:
• ISO 9001 Quality management system: 100% of
production facilities and 90% of distribution centers
• ISO 14001 Environmental management system: 98%
ofproduction facilities and 90% of distribution centers
• ISO 50001 Energy standard: Macungie, Hagerstown
and New River Valley plants in the US.
A GLOBAL GROUP BUSINESS MODEL
PRODUCTION
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