How Volvo Logistics saved over 400 million during a crisis

How Volvo Logistics saved over 400 million during a financial crisis

A well-structured change programme was the key for Volvo Logistics to succeed in saving more than 400 million SEK during the financial crisis 2009. All efforts were rapidly focused on savings for the whole organisation. How? Let’s take it from the beginning.

Challenge

As an effect of the 2008-recession Volvo Logistics saw a negative order intake (clients returning their already purchased products), resulting in a need for Volvo Logistics management to set a savings target of 400 million SEK for 2009, almost 30% of the total turnover, to be able to come back to “black figures”.

Solution & Execution

Volvo Logistics succeeded in saving more than 400 million SEK in just six months.The entire organisation quickly changed focus and concentrated all its efforts on savings while using a well-structured change programme. The same methodology and program that IntegPartner have been working with for over 40 years to help organisations worldwide implement their strategies.

“Our aim is to link our work to the business plan, our own personal objectives and the company’s strategies. This then enables us to create a complete structure that is easy to understand and accept,” – Håkan Färnlöf, Head of Operational Development, OD at Volvo Logistics.

Håkan Färnlöf, Partner IntegPartner, was at the time working as Head of Operational Development, OD, at Volvo Logistics.

“This is no miracle method. It is instead a question of having an effective structure and the will to change.” – Håkan Färnlöf.

At the time Volvo Logistics had been working on this kind of change programme for many years. An hour every second week the employees got together in their individual OD groups to talk about improvements based on strategic objectives and the business plan.

When Volvo Logistics needed to make severe savings, the initial idea was to begin the process at the large management meeting in December 2008. However this would only have led to confusion.

“After all, we couldn’t sit in our OD groups with a totally different view of things compared with what the management was thinking at that time. So all 130 OD groups in the company were given an immediate directive to change focus and concentrate on savings. When the management then met in December, there was already an understanding within the company. We saved a huge amount of time,” – Håkan Färnlöf.

The employees at Volvo Logistics were able to work on savings via the OD TeamPlace. A top ten list of good suggestions were published at the site and the work could be seen by everyone and ideas and input were collected from different OD groups.

Result

Volvo Logistics managed to save 356 million by April and in May the savings totalled 450 million SEK. Some people were skeptical, but 2009 actually proved what can be achieved.

”When we were able to focus on one question, the result was fantastic. We succeeded in increasing income at the department by almost SEK 2 million.” – Anders Holmgren, Team Leader Emballage Sweden Volvo

Download & create your own yearly cycle/model

To support planning and thinking space it can help to create an overview of the most important activities, like the one Volvo Logistics had. This work is perfect for the beginning of the year and to reserve calendar time and resources for the strategic work and for building the team culture you would like to nurture.

How does your yearly cycle for your strategy realization look?

Download your own editable PPT-version here: Integ-Partner-Infrastructure-strategy

Strategy workshop

Review team & company objectives, prioritizations, team vitality and cross-functional ability. Learn from the previous period of work.

⏰Every 6th month or more often

Strategic dialogue with everyone

Sharing and learning together, revisit and discuss the strategy and decide on team goals and focus areas.

⏰Every 6th month or more often

Strategy drive meetings

Team action plan and progress follow up. Revisit the overall strategy and how it’s going. Learn and develop as team

⏰One hour bi-weekly or more often.

Strategic review meetings

Oversee and support strategic and cultural progress.

⏰One hour once a month.

Are you interested in hearing more about how a change program could be beneficial to your organisation? Feel free to contact me or any of my colleagues.