European manufacturers have enlarged their manufacturing networks to Asia. Also, the growing demand in Asia as well as in Russia creates challenge for supply chain solutions. This research presents survey research results, targeted on the largest manufacturers and retailers in Finland and Sweden. We estimate how transportation modal split (road, sea, railway and air) will evolve in the future, and how traffic flows will develop between Europe, Russia, and Asian countries. We also present an estimation of the future transportation costs development. In the analysis phase, it is also considered how large volumes could be shifted to favour railway connection.

Automated Guided Vehicle (AGV) systems are standard automated items in production and warehousing today. However, studies have rarely examined a more advanced form of AGVs called Semi-Autonomous Vehicles (SAVs), which have a higher sophistication of task completion and routing flexibility. This research presents SAVs in an industrial development case study. Using simulation, the route-keeping ability of SAVs with two types of guidance techniques is being studied. The results show that dual-navigation SAVs can provide the needed flexibility for routing. Using wire guidance and dead reckoning, both very well-established techniques, the SAVs' performance is, within certain limits, quite comparable to the AGVs with more advanced and expensive navigation techniques.

Discrete event system simulation is often seen as a genuine tool to investigate the performance of transportation systems. The complexity of real-world systems often prevents us from accurately describing these by a mathematical model that can be evaluated analytically, thus, simulation is often the only realistic alternative. Another advantage of the simulation is the ability to include statistical analysis for different simulation scenarios.

In this paper we discuss the main problems concerning the modelling of transportation systems. Well-known approaches of incorporating uncertainty into models include trace driven simulations and sampling directly from gathered data (this latter could also be presented by a fitting statistical distribution). Another aspect to be taken into account is the economics of simulation modelling; a more detailed model requires additional building time, and proper treatment of stochastic models requires statistical analysis, which again usually implies several simulation runs. From this outset the following question arises: Should stochastic behaviour be included in transportation simulation models in the first place at all?

We present real case examples including evaluation of a railway transportation concept, capacity analysis of an automatic guided vehicle system, CBA of a railway network investment and evaluation of different multipurpose railway wagons, where stochastic behaviour is dealt with in different ways. Based on the cases we make an initial attempt to formulate framework for deciding how to include stochastic behaviour in the simulation model. We stress that the metrics used to evaluate system performance should be included in the framework. For further research topics we suggest formulating explicit guidelines to deal with stochastics to increase the efficiency of model building.

Competing in global markets creates pressure for manufacturers to rigidly use automation, and advanced manufacturing techniques to improve manufacturing plant productivity. Among productivity, manufacturers are also interested about other performance dimensions, namely time, flexibility and quality. With the wise use of automation, we could directly improve all of the other indicators, and indirectly quality. In this paper it is shown, how implementation and use of Automatic Guided Vehicles (AGVs) could benefit from the use of manufacturing simulation. AGVs have been available for practical use since the 1970s, but still in the investment and use processes it is rarely seen justified to a high detail, what eventually determines the number of vehicles used in the system. Our paper is able to show with two simulation cases (a hypothetical example and a real case study) that the number of AGVs is very sensitive with respect to production system output. Furthermore, some assumptions that are often made can overly simplify the problem (e.g. no recharging of batteries and constant speed). Therefore, in this paper, we propose that more research should be addressed to the AGV system simulation, and in practice tools for decisions makers should be developed further. Our research also shows that empty travelling and low utilisation is a norm in current AGV systems in order to assure production system functionality, and there is a need and potential for performance improvement here, as well.

A decade ago, the European Union decided that railways should be privatised and deregulated (effective from 2007 onwards). Due to the recent enlargements of the EU and the risk of failures in the decision-making process, it is important to examine early adopters of deregulation policies. We analyse literature and use second-hand quantitative material to thoroughly review this process concerning three different countries (USA, UK and Sweden). In all three cases, the deregulation process has brought positive performance improvements in the long-term perspective, but in the short to medium term, there are a number of problems and warning examples, especially arising from UK case.

Third-Party Logistics (3PL) providers have usually developed themselves through transportation ownership (mainly road or sea), and/or warehousing/freight forwarding capability. However, among these actual operations, there exists a number of other routes, e.g. by offering administrative/indirect work of sales, purchasing, business control and inventory management. With increased service level expectations among OEMs, there is a clear need for these kinds of well-defined and performed non-tangible logistical services. In this paper three case studies are presented, which show that a 3PL integrator could arise from this new service context, and could operate all logistical issues, even without any distribution operations ownership.

Purpose – This paper aims to highlight the complex nature of automated guided vehicle (AGV) simulation model building, and especially how system modelling details affect the end results. This is an important issue in all of the transportation simulation systems, since they are service-based by their nature, and additional inefficiencies create unanticipated performance downgrading.

Design/methodology/approach – This paper uses a simulation approach, and simulated systems are based on a real-life case study and on well accepted hypothetical simulation example.

Findings – Simulation system boundaries are often neglected in the model building, and especially interface to inbound (and possibly outbound) material flow should be considered carefully; based on these research results, AGV investments are seen in an entirely different light, as system boundary is enlarged to contain more realistically interacting elements. Similar system boundary issues were found from the case study: interface with overhead gantry did not provide near optimal performance. The case study also revealed that high speed of AGVs is not necessarily worth additional investment; constraints exist in safety, acceleration and ability to turn in corners.

Research limitations/implications – The findings are based on the simulation work and, to see the real implications, real-life implementations on policy level are needed.

Practical implications – Results of this research provide more insights for manufacturing unit investments, and especially in the scope of automated transportation system use. Also changes in manufacturing flow management issues, after investing in, for example, AGV systems, are different from in less-automated manufacturing units.

Originality/value – This research work provides more insights to simulation research work, especially from the perspective of transportation systems. Also implications arising from case study are unique as being compared to previous research in the field.

Large amounts of European manufacturers have enlarged their manufacturing networks to Asia, in most of the occasions to China and India. Also the growing demand in Asia as well as in Russia creates increasing need for cost efficient and lead time wise supply chain solutions. It depends on the used manufacturing and supply chain strategy, whether manufacturing units in a company's network use market focused (factory in particular region serves that market needs) or product group based (one manufacturing unit takes global delivery responsibility) control. In either case, manufacturers at the moment use "local sourcing" strategy to enhance supply chain control and responsiveness. However, this approach is incapable to use global sourcing opportunities, and utilize cheap raw materials and semi-finished items from Asia and Russia to be used in European manufacturing units. The constraints in this process are the transportation costs and delays; sea container transportation from Asia is cheap, but takes long time to be shipped to Europe (nearly two months), and correspondingly air transportation is expensive, and sets restrictions for the package size and weight. At the moment a third alternative also exist, where items are transported between Europe, Russia and Asia through Trans-Asian Railway network. This route provides moderate cost efficiency (as compared to air transportation) and lead time advantage (as compared to sea containers).

In this paper we analyze the survey research results, which was targeted on the largest manufacturers and retailers in Finland and Sweden. Based on the survey analysis, we estimate how transportation modal split (between road, sea, railway and air) will evolve in the future, and how traffic flows develop between Europe, Russia, South-Korea, India, China, and Japan. We also present estimation from the future transportation costs development. In the analysis phase we also consider, how large volumes could be shifted to railway connection, and how wise customer picking could smoothen the transportation amounts from and to Russia/Asia. Also avenues for further research are being proposed based on our quantitative analysis.