Cooling system manual p/n 7748163 has a very good explanation of how this system works. (it also has really good drawings and charts) Suggest you get a copy and read it. Google "Volvo 7748163" something might come up.
Most common consumer problem we see is;
When re-installing the blue cap on the fresh water
flush hose, tighten it by hand, then tighten 1/4 turn using a wrench. If the cap is too loose, air may be
sucked in, causing the engine to overheat, resulting
in damage.
2nd most common;
Is the bypass passage in the thermostat housing gets plugged.
Maybe tell us your symptoms and we can try to point you in the right direction?