INSIDE TRACK: Insights from the man responsible for plotting Volvo CE’s future direction
by Cathy Smith
Thomas Bitter says he wants to get back to basics at Volvo Construction Equipment. For the head of the recently created Marketing and Product Portfolio that means two things: greater customer satisfaction and greater profitability. And Bitter sees no contradiction between the two.
He believes it is a question of knowing what matters to customers and not simply innovating for the sake of it.
“At one point in time, we discovered that a major part of our ranges were not profitable – not to the extent that we wanted.”
He puts it bluntly: “We’re a highly technical company so if we don’t have good engineers we don’t go anywhere. But we have to start to make a trade-off between all the things we would like to do and the things that it makes sense to do.”
It is the job of Bitter’s new department to see the big picture and to decide “which things it makes sense to do”. He says that by putting together a team which combines mainly sales and technology expertise alongside other functions – he describes it as an “unbiased” group – Volvo CE will be able to make wise decisions about where to invest for the future.
“Today, we are strong in developing engines and machines and drivelines and transmissions. Tomorrow, it may be more communication or data management. Connected machines are much more efficient than stand-alone ones.”
Bitter says the buzz phrase of the moment is the ‘Internet of things’. “Everything will be connected. If it works for your phone and your car, imagine what it does for an excavator on a job site,” he enthuses. “The question is do we spend more research and development money on these technologies or continue to spend a lot of money on traditional ones? Unfortunately, the answer is not one or the other.”
Bitter believes this question will be easier for his more ‘neutral’ department to answer than the former approach, which kept technology and sales apart.
What he is sure of, though, is that in certain markets the inclusion of new technology and connected machines will no longer be simply a differentiator for customers, but will actually be a deal maker.
He gives the example of a quarry where site operators are looking for efficiency not just in a single machine but across the entire operation, and that could come with connectivity between excavators, wheel loaders and trucks.
“If you can only imagine that these machines are connected then you can optimize the flow of the hauling units. You can accelerate a truck or slow it down and the impact on fuel efficiency is greater than anything we can do by developing new engines.”
For Bitter it is about matching the traditional know-how with know-how that Volvo CE does not necessarily have in-house and the company will need to strike up new partnerships.
Collaboration and teamwork are important to him. Being brought up in Berlin, a city divided by a wall, has left its mark. He went on to work at the CERN laboratory in Geneva, studied for an MBA, and then his career took him into product development for Mack Trucks in the United States and Renault Trucks in France.
He joined Volvo CE 13 years ago, spending part of that time based in Singapore. This peripatetic working life is in stark contrast to the confined years of his youth and which, he says, has made him appreciate the importance of a wider perspective. “I believe the strengths of delivering certain projects come when people work together. It’s something that I find very motivating.”
The Marketing and Product Portfolio team are not just looking at where to invest for the next generation of construction equipment – they also want to satisfy their customers today who are working with existing machines.
Here again, Bitter believes that rather than always focusing on the next new product, good services are essential and dealers need to be given the right tools to deliver customer satisfaction. “So if there’s a shift that has to happen in our company it is from the search for a new product all the time to product maintenance – taking care of what we have.”
The new team only started work in 2015 but if they get it right it should mean satisfied customers and satisfied shareholders. It cannot get fairer than that.