INSIDE TRACK: Customers get more than a machine when they buy into Volvo CE
by Patricia Kelly
The role of Volvo CE as a construction equipment manufacturer has evolved far beyond simply selling machines. The traditional offerings of spare parts and attachments, service agreements and extended warranties still exist. But the company has also developed a range of sophisticated services designed to improve machine uptime, efficiency and safety, increase productivity and enhance fuel efficiency.
“The market requirements today are very different to what they were many years ago,” says Koen Sips, the vice president heading up the Customer Solutions team.
“We are increasingly investing more in the productivity-enhancing features of machines,” he explains. “Through the connectivity of the machine we can actually monitor it at a distance and we can check the health of the machine,” he explains. “As a result, we can offer more services related to uptime, productivity, fuel efficiency and safety – so the machine is becoming more intelligent as we move forward. And our customers can be more productive if we make more productive machines.”
Volvo CE’s modern machine control system allows operators to use a screen to compare what they are doing with the machine directly with engineering plans. Giving the operator control cuts down on personnel and, says Sips, also means the operator can work faster than before.
“We see enhanced productivity of about 20-25%,” acknowledges Sips. This in turn means lower costs and higher profits, he says.
Customer Solutions has a complex and multidimensional relationship with the rest of the company and is in regular contact with Volvo CE personnel throughout the world as well as the technology department and different product platforms.
“There is a lot of interaction and discussion about what we need to develop, what works and what we can improve,” says Sips. “We have been working hard to develop new products and new services and a number of them are ready to be launched,” he continues, hinting at a new development about to come on the market that will make wheel loaders more efficient and productive than before.
Yet, says Sips, no matter what the company does to enhance its machines, “customers still want the Volvo look and feel”. Customers themselves play a major role in testing out the new ideas that come out of Volvo CE.
“We create the idea and then we go to a specific market or a specific customer to test the concept,” explains Sips. “If the concept proves to be the right one we scale up, either products, customers or regions. The customer is therefore closely related to testing our concept in a real-life scenario. We try to deliver ideas and systems that can be implemented in different markets and adjusted according to local and regional needs.”
Dutchman Sips trained as an engineer and studied for an MBA, while working simultaneously as a factory automation engineer.
“I think it is important that people see business from different angles and different industries as well,” he maintains. “In any industry you come across the same problems but from different angles and in different circumstances, but it is always about customers, it is always about people, it is always about organization.”
Sips joined Volvo CE from one of the independent Volvo dealerships.
“Dealerships are crucial to the success of a brand like Volvo in the construction equipment area because the dealers are the bridge to the customers and the customers need to have faith both in the product and in the service that is being provided by the dealers,” says Sips. “So the customer wants security in terms of support after the sale. Very often the human relationship the customer has with sales people and dealer management is key to concluding the sale.
“It is vital that Volvo CE has a strong distribution network, because in the face of competition from different brands it is the service and the trust that customers have in dealerships that will drive both the sales and the market share.”
The first job Sips was asked to do at Volvo CE was to promote excavators being produced by the company in Korea. Later, in commercial management, he was required to anticipate demand by making sure the company would build exactly the volume of machines that would be sold. It was a role that took him around the world.
“It is essential to build the right number of machines,” he says. “If you build too many your stock goes up and your working capital goes up. It is also important to build the right type of machines and in the right locations around the world. I traveled around the world talking to plant managers about the process and making sure that there was trust, because when you are talking about volumes, and people need to invest in personnel or in production facilities, it is important that they trust the numbers that we have given them and it is important that what they forecast is real.”
In his current role at Customer Solutions, Sips credits much of the success he has had in building an extensive offering of advanced services to having previously worked in a dealership.
“It helps to a great extent to understand what the market needs or how a dealer thinks. What we provide and what we develop in the global customer solutions team are actually tools and parts, and systems and approaches to market, that dealers will use to serve their customers better. It has allowed me to quickly understand whether or not ideas will work, or to capture some idea of the market, and to quickly understand what is going on.
“I get a lot of energy from talking to my team and talking to people around the world – it gives me ideas and keeps me moving forward to raise the bar constantly and offer more and better to customers,” he says. “Through the people, through the offering, we are basically building the brand and moving forward.”