Last week there was an article in De Tijd (a Belgian newspaper that mainly focuses on business and economics) in which Peter Himpe, CEO of Volvo Trucks Belgium, describes the steps that his company has taken and is still planning to take in order to become future-proof.
In 2015 Volvo Trucks Belgium and Duval Union Consulting worked together on a strategic project. Together, we created a future vision, strategy and a concrete roadmap of actions that would set Volvo Trucks on a path of successful transformation. Today, we’re happy to see the first fruits of our collective labor and we’re very proud that our client is seizing every opportunity become future-proof.
The proverb goes: “Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime” and we stand by this philosophy when dealing with companies. This is a prime example of a company that took a chance and worked hard… and it pays off.
How Volvo Trucks is preparing itself for the future
The biggest part of Volvo Trucks’ income still comes from very traditional revenue streams: 95% is generated from the truck sales and spare parts, the remaining 5% is generated by the fleet management system: Dynafleet. Dynafleet monitors trucks, their location, consumption, emission,… in real time. That last part will systematically go up in the coming years. The demand for these services is gradually increasing. The early adopters are often companies for whom transport is not the core business and does have any added value. They prefer an invoice per ton, kilometer or cubic meter.
From carrier to agent
“We are evolving from selling trucks to providing services with self-driving trucks as a lever”, says Peter Himpe. “Once the trucks are connected with the cloud and can drive autonomously, drivers will no longer be required. I even believe Volvo Trucks can become a carrier in the future.” The current carriers will have another role. “They will become agents or middle-men that form a bridge between the truck manufacturer and the client. That is an opportunity that we really need to grasp. Technically this is already possible, but because of legislation there is still a long way to go.”
“I believe Volvo Trucks can become a carrier in the future.”
Demarcated areas, where legislation is less of an issue and companies are much more autonomous, will be used to test with the first self-driving vehicles. “We have the advantage that we also build busses, dumpers, cranes and bulldozers. So our clients will only need 1 supplier: us.”
The gradual transition to the rental model is already there. “Big international companies do not longer ask to deliver a truck. They as us an invoice per ton they mine. It doesn’t matter if we deliver them a truck, dumper or crane. It’s up to us to make the most efficient choice.”, says Himpe. Other Belgian companies are already using the test project. “A carrier calculated that in an ideal scenario, he would need 2.3 trucks from us. Connected vehicles and KPI’s give us and our clients the opportunity to organize this more efficiently. In this situation we are their coach”, according to Pieter De Bruyn (Digital Officer Volvo Trucks)
“It doesn’t matter if we deliver big international companies a truck, dumper or crane. It’s up to us to make the most efficient choice for them.”
Partnerships are high priority. Volvo Trucks is partnering with IMOB (Institution for Mobility) and D’hondt Insurance to build a Driver Community that helps reduce emission and accidents. The app monitors the driver’s behavior. Driving economically earns points that can be changed for f.e. free coffee, buying a suit case,… “Drivers are already being monitored, but there is nothing in it for them. Maybe with this app, employers can build a kind of bonus system around it”, says Himpe. Volvo wants to open up the app for other truck builders. “With this move we are losing our competitive advantage, but the added value is so much bigger. Drivers would be able to use the system to warn each other for delays or road works,…”
“Drivers are already being monitored, but there is nothing in it for them. Maybe with this app, employers can build a kind of bonus system around it.”
Volvo is currently investing billions in hardware to reduce the emission with 1 or 2%. “Drivers have a gigantic impact on emissions (potentially 10 or 20%), but nowadays nobody invests in drivers. Organizations will be very excited to become member of the driver community, which will help reduce emission and cut a lot of costs.”, says Himpe.
Peter Himpe on Digital Transformation
A year ago we sat down with Peter Himpe to talk about the Digital Transformation project we did together.
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About Duval Union Consulting
We are new-style management consultants focusing on transforming and growing organizations in a digital-first world with offices in Europe and the Middle East. New-style? Co-created business strategy, custom-made transformation trajectories and actual experienced business advisors are only some of our differentiators and why clients love to work with us. We design the future of your business together.