Control Tower vs Internal Logistics Management: The case of ABB Power Grids

Abstract

The delocalization of some activities and departments outside a company not always turn to be a positive choice in terms of cost, knowledge and resources. The analysis conducted in this work demonstrates how, for ABB Power Grids (located in Monselice) the relocation of logistic department, in charge for heavy lift transformers transport, proved to be a wrong choice that leads again to an internally logistic management. After a heavy lift transport overview and a comparison between the activities and management offered by Control Tower and those offered by an internal transport management, a detailed analysis of transport cost has been conducted. The analysis started with an explanation of the case study context focusing on type of product offered, production volume over the 5 years taken into consideration (2015-2019) and transport cost evaluation. After pointed out the main components of a transport cost, the same has been subdivided in pure transport cost, transport extra costs and unpredictable extra costs. It was therefore possible to understand the percentage of transport quoted on budget and the percentage of transports affected by extra costs. Thanks to a deeper analysis it was feasible to study transport cost in relation to shipping area and transformer weight in order to understand in which extension they can affect final transport cost.