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Total cost analysis of the inbound logistics processes at Cementa AB in Degerhamn
Linnaeus University, Faculty of Business, Economics and Design, Linnaeus School of Business and Economics.
Linnaeus University, Faculty of Business, Economics and Design, Linnaeus School of Business and Economics.
2011 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Background: Cementa AB in Degerhamn is a cement producing company included in HeidelbergCement Group. The cement production is a core process together with other important processes, such as the inbound processes, and it requires a lot of resources and materials. The inbound processes objective is to serve the production with right material in right time and at Cementa these processes are many. Continuously, the company have not measured and evaluated the current total cost for three important raw materials and their inbound processes.  These inbound processes are for limestone, coal and gypsum. Simultaneously, these are having different material handling procedures that might not be the most effective and better alternatives are consequently of main interest.

Purpose: The purpose of this thesis is to construct a total cost analysis for three inbound logistics processes at Cementa. The thesis will focus on the raw material of limestone, coal and gypsum. From the total cost analysis, current material handling procedures will be evaluated to understand where alterations can be made. Possible alternatives will be measured in a total cost analysis and compared against current total cost and material handling procedures.

Methodology: This thesis was a case study that focused on practical problems at Cementa where a deductive and iterative scientific approach was used. The research method was both qualitative and quantitative and where interviews and direct observations were used to collect primary data. The analysis method of this thesis was a total cost analysis for current procedures which was later on compared to possible alternative developments.

Conclusion: The today´s total cost for the inbound logistics processes of limestone, coal and gypsum were of different size and was calculated on the same basis. The total cost for limestone was 1 983 162 SEK, coal 15 891 253 SEK and gypsum 839 283 SEK. Following, the reason to why coal has the highest total cost is because Cementa ties up a lot of capital. In today´s situation, the possible alternatives for the material handling procedures are specific to each process but also related to each other. In limestone, Cementa should continue with current material handling procedures, but follow up the total cost analysis over years to identify cost variations. For coal, Cementa could develop their material handling procedures by moving their inventories into one inventory, at either one place close to the production or at where the reserve inventory of coal is positioned today. Furthermore, in the second scenario Cementa can either transport with a wheel loader or by automating the process with a conveyor system. From the analysis, transportation with wheel loader is the most suitable alternative since it does not require investment or have high total costs. Related to the movement of the coal inventory, the gypsum process can be developed. Here, the gypsum inventory can be moved closer to where it´s used in production. However, the new position would require a movement of the sand and coal inventory plus a movement of the recycling station.

Place, publisher, year, edition, pages
2011. , p. 102
Keywords [en]
Cement industry, Processes, Inbound Logistics, Material Handling Procedures, Total Cost Analysis, Inventory, Inbound transportation
Identifiers
URN: urn:nbn:se:lnu:diva-12079OAI: oai:DiVA.org:lnu-12079DiVA, id: diva2:420648
Subject / course
Business Administration - Other
Educational program
Business Administration and Economics Programme, 240 credits
Uppsok
Social and Behavioural Science, Law
Supervisors
Examiners
Available from: 2011-06-20 Created: 2011-06-03 Last updated: 2011-06-20Bibliographically approved

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CiteExportLink to record
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Citation style
  • apa
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Output format
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