Platform Development Strategy at Volvo Trucks

ImageThe company’s primary focus is on the production of cabs and vehicles for a variety of brands. They work with a foundation of support from the Volvo Production System and Operational Development. Volvo’s product variants have increased exponentially throughout the years. This has been the result of customer requirements and demands. With a global presence, the company is striving to meet the demands of its customers based on pre-defined attributes. The challenge the company is facing is dealing with the product variety. The specifications vary with the variety when the company moves from one market located in one country to another and to sort the product and make it simpler to work with, the company divides the truck platform into three major categories, the product structure, the architecture and the modules. With the right permutation of all three, the company is able to achieve the desired configuration of its platform with a wide and brand distinct product offering and efficient assembly. Starting with the vehicle module structure, the company identifies the vehicle module as a geometrical structure for breaking the product down into different modules. Say for example, the demands on battery boxes vary in Europe and US (12V in Europe and 24V in the US), and the company has to cater to this demand in the right way. To work with modules, the company has come up with the “Lego Box” strategy. This in order to identify what really is the key building boxes in the product platforms for the future. Another factor is to keep the concept global, i.e. the product should be accepted throughout countries. For obtaining follow-ups for each of the introduced platform, the company has an attribute called key performance indicators. These indicators reveal how the company should deal with commonality and differentiation. They are capable of making decisions on how much of the components used in one truck should be used in the other. Say, at Volvo GTO, 60% of the components used in one are used in another. Considering the architecture (interfaces), the company sets rules about different distances for the platform. At GTO, they strive towards reducing the number of interfaces between the parts. In addition to this the company also tries to reduce the flexibility of combining different parts. By standardizing the architecture and reducing the no. of interfaces, the company is able to provide its customers the same product which saves resource and time. The final attribute is the product structure. In this case, the company’s salesperson gathers all the customer requirements and translates it into a BOM with variants and part numbers. Parts are listed on the y-axis and the product offering on the x-axis. With this, the company tries to link these variants and part numbers to come up with the right platform. The modules, the architecture and the product structure all possess a triangular relationship where one attribute is dependent on the other.

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