Sweden-based Volvo Group is launching a set of collaborative product development applications for its truck-making operations in a bid to cut costs and more tightly connect its three separate truck units and their suppliers during the vehicle design process.
Volvo Global Trucks' purchasing, planning and product development division announced last month that it's standardizing truck development activities at its Volvo Truck Corp., Mack Trucks Inc. and Renault VI units. To make that happen, it's installing product life cycle management (PLM) applications developed by Paris-based Dassault Systemes SA and sold by IBM Corp.
PLM technology lets companies share a single view of product, procurement and customer data among different departments and external suppliers. Volvo's need for that capability was driven by its acquisition of the Mack and Renault truck operations 15 months ago in a deal that made it the second-largest truck maker, behind DaimlerChrysler AG.
The initial cost of the software rollout will be more than US$10 million, according to Orjan Christensson, CIO for IT applications at Volvo Group in Goteborg, Sweden. He declined to disclose the company's full budget for the applications, which are also due to be used by Volvo's bus operations in a separate installation. Volvo Car Corp. is now owned by Ford Motor Co. and isn't involved in the PLM project.
Christensson said the new applications should reduce the number of prototype vehicles Volvo's truck operations need to build and help reduce product costs and shorten lead times. "It's mandatory that [the truck units] work together in a good way to share designs, common products, components and architectures," he said.
Volvo executives also hope the PLM software will aid the company's efforts to overtake DaimlerChrysler in the truck market, Christensson said.
But DaimlerChrysler has also bought Dassault's applications and said last month that it was starting to deploy and use the same PLM tools that Volvo is installing. DaimlerChrysler said the software will be used by its interior design and vehicle-packaging teams. Officials at the company wouldn't disclose more details last week.
Given the complexity of their products, automakers have tried to synchronize their internal design and supply chain functions by using PLM forerunners such as less-functional product data management tools, said Joshua Greenbaum, an analyst at Enterprise Applications Consulting in Daly City, Calif.
But companies typically wrote their own applications, which weren't "necessarily the most effective and collaborative" tools, he added.
Volvo currently uses homegrown product design software that will mostly be phased out as the PLM applications are installed. But the project poses some challenges, Christensson said. For example, forcing smaller suppliers to use the PLM tools would put too much of a burden on those companies, he said.