SupplierBusiness The Medium and Heavy Commercial Vehicle ... · Automotive SupplierBusiness | The...

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SupplierBusiness The Medium and Heavy Commercial Vehicle OEM Report 2014 edition supplierbusiness.com Sectoral Report IHS Automotive SAMPLE

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SupplierBusiness

The Medium and Heavy Commercial Vehicle OEM Report

2014 edition supplierbusiness.com

Sectoral Report

IHS Automotive

SAMPLE

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2014 edition 2 © 2014 IHS

IHS Automotive SupplierBusiness | The Medium and Heavy Commercial Vehicle OEM Report

COPYRIGHT NOTICE AND LEGAL DISCLAIMER© 2014 IHS. No portion of this report may be reproduced, reused, or otherwise distributed in any form without prior written consent, with the exception of any internal client distribution as may be permitted in the license agreement between client and IHS. Content reproduced or redistributed with IHS permission must display IHS legal notices and attributions of authorship. The information contained herein is from sources considered reliable but its accuracy and completeness are not warranted, nor are the opinions and analyses which are based upon it, and to the extent permitted by law, IHS shall not be liable for any errors or omissions or any loss, damage or expense incurred by reliance on information or any statement contained herein. For more information, please contact IHS at [email protected], +1 800 IHS CARE (from North American locations), or +44 (0) 1344 328 300 (from outside North America). All products, company names or other marks appearing in this publication are the trademarks and property of IHS or their respective owners.

IHS AutomotiveSupplierBusiness

ContentsIntroduction ..................................................................................................................................................................... 7

Globalisation .............................................................................................................................................................. 12Global integration ....................................................................................................................................................... 13Regional specialisation ............................................................................................................................................... 13

Enabling technology .................................................................................................................................................. 14Improving efficiency .................................................................................................................................................... 14The connected vehicle ............................................................................................................................................... 15Reshaping OEMs and suppliers ................................................................................................................................. 16Platform and module strategies ...................................................................................................................................17Fuel Efficiency ............................................................................................................................................................ 18Reduced Emissions ................................................................................................................................................... 24Safety ......................................................................................................................................................................... 25

OEM perspectives ........................................................................................................................................................ 29Daimler ........................................................................................................................................................................ 29

Purchasing strategy and supply chain management .................................................................................................. 33Better Data Comparisons ........................................................................................................................................... 36

MAN TRUCK & BUS AG ............................................................................................................................................. 37Doing business with MAN .......................................................................................................................................... 40

SCANIA ........................................................................................................................................................................ 42Sales performance ..................................................................................................................................................... 43Modular production .................................................................................................................................................... 47New market sectors ................................................................................................................................................... 48Purchasing strategy and supply chain management .................................................................................................. 49

AB VOLVO ................................................................................................................................................................... 52Volvo Trucks ............................................................................................................................................................... 55Mack Trucks ............................................................................................................................................................... 55Renault Trucks ........................................................................................................................................................... 56UD Trucks .................................................................................................................................................................. 56VECV ......................................................................................................................................................................... 56Doing business with Volvo .......................................................................................................................................... 57

IVECO .......................................................................................................................................................................... 59Doing business with Iveco .......................................................................................................................................... 62

NAVISTAR / INTERNATIONAL ................................................................................................................................... 63Doing business with Navistar ..................................................................................................................................... 65

Paccar ......................................................................................................................................................................... 66Purchasing strategy and supply chain management .................................................................................................. 69Doing business with Paccar ....................................................................................................................................... 70

HINO ............................................................................................................................................................................ 72Doing business with Hino ........................................................................................................................................... 75

ISUZU .......................................................................................................................................................................... 76Doing business with Isuzu .......................................................................................................................................... 79

Tata .............................................................................................................................................................................. 80

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Purchasing strategy and supply chain management .................................................................................................. 83Doing business with Tata ............................................................................................................................................ 84

Ashok Leyland ............................................................................................................................................................ 84Doing business with Ashok Leyland ........................................................................................................................... 89

China FAW ................................................................................................................................................................... 90Doing business with China FAW ................................................................................................................................. 93

Dongfeng Motor Corporation ................................................................................................................................... 94Doing business with Dongfeng ................................................................................................................................... 96

Company profiles .......................................................................................................................................................... 98Allison Transmission ................................................................................................................................................. 98

Manufacturing plants .................................................................................................................................................101R&D addresses ........................................................................................................................................................ 102Map ......................................................................................................................................................................... 103

Bosch ........................................................................................................................................................................ 104Manufacturing plants .................................................................................................................................................118R&D addresses ........................................................................................................................................................ 134Map ......................................................................................................................................................................... 138

Commercial Vehicle Group ..................................................................................................................................... 139Continental ............................................................................................................................................................... 142

Manufacturing plants .................................................................................................................................................157R&D addresses ........................................................................................................................................................ 189Map ......................................................................................................................................................................... 200

Cummins ................................................................................................................................................................... 201Delphi ........................................................................................................................................................................ 205

Manufacturing plants .................................................................................................................................................214R&D addresses .........................................................................................................................................................219Map ......................................................................................................................................................................... 220

Denso ........................................................................................................................................................................ 221Manufacturing plants ................................................................................................................................................ 229R&D addresses ........................................................................................................................................................ 246Map ......................................................................................................................................................................... 249

Eaton ......................................................................................................................................................................... 250Eberspächer ............................................................................................................................................................. 255Federal-Mogul .......................................................................................................................................................... 260GKN ........................................................................................................................................................................... 265

Manufacturing plants .................................................................................................................................................271R&D addresses ........................................................................................................................................................ 285Map ......................................................................................................................................................................... 286

Haldex ....................................................................................................................................................................... 287Knorr-Bremse ..........................................................................................................................................................290

Manufacturing plants ................................................................................................................................................ 293R&D addresses ........................................................................................................................................................ 299Map ......................................................................................................................................................................... 300

Meritor ....................................................................................................................................................................... 301Manufacturing plants ................................................................................................................................................ 305R&D addresses ........................................................................................................................................................ 309Map ..........................................................................................................................................................................311

Metalsa ...................................................................................................................................................................... 312Manufacturing plants .................................................................................................................................................314Map ..........................................................................................................................................................................315

ThyssenKrupp .......................................................................................................................................................... 316Manufacturing plants ................................................................................................................................................ 322R&D addresses ........................................................................................................................................................ 325

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Map ......................................................................................................................................................................... 326TMD Friction ............................................................................................................................................................. 327

Manufacturing plants ................................................................................................................................................ 330Map ......................................................................................................................................................................... 332

TRW Automotive ...................................................................................................................................................... 333Manufacturing plants ................................................................................................................................................ 341R&D addresses ........................................................................................................................................................ 363Map ......................................................................................................................................................................... 367

WABCO ......................................................................................................................................................................368Manufacturing plants ................................................................................................................................................ 373R&D addresses ........................................................................................................................................................ 375Map ......................................................................................................................................................................... 376

Webasto .................................................................................................................................................................... 377Manufacturing plants ................................................................................................................................................ 382Map ......................................................................................................................................................................... 387

ZF ...............................................................................................................................................................................388Manufacturing plants ................................................................................................................................................ 397R&D addresses .........................................................................................................................................................411Map ..........................................................................................................................................................................412

FiguresFigure 1: Medium and heavy vehicle production olumes 2013 by manufacturer and region ................................ 8Figure 2: Most important external forces impacting on the truck industry 2009 and 2020 .................................. 9Figure 3: Collision avoidance and mitigation intervention sequence .................................................................... 16Figure 4: Total operating costs for a 40 tonne tractor ............................................................................................. 19Figure 5: The worldwide transient vehicle cycle (WTVC) ......................................................................................... 21Figure 6: Estimated per-vehicle manufacturing cost to comply with Euro standard emissions levels for vehicles with different engine sizes ........................................................................................................................... 22Figure 7: Estimated per-vehicle manufacturing cost to comply with US standard emissions levels for vehicles with different engine sizes .......................................................................................................................................... 23Figure 8: Global Emission Standards ......................................................................................................................... 24Figure 9: Bendix/ Knorr Bremse ABD22X air disc brake ......................................................................................... 26Figure 10: Truck safety systems evolution ................................................................................................................ 27Figure 11: Flexibility across Daimler’s global truck manufacturing footprint ....................................................... 31Figure 12: Daimler Trucks Global Excellence strategy ............................................................................................ 31Figure 13: Manufacturing flexibility at Daimler ......................................................................................................... 32Figure 14: Daimler’s top-line push strategy element ............................................................................................... 32Figure 15: Daimler’s module strategy ........................................................................................................................ 33Figure 16: A graphic representation of Daimler’s EBSC system ............................................................................ 34Figure 17: Daimler’s supplier pyramid ........................................................................................................................ 35Figure 18: A schematic showing new enhancements to Daimler’s EBSC system ............................................... 36Figure 19: MAN/VW/Scania cross shareholdings ..................................................................................................... 37Figure 20: MAN Truck & Bus production network .................................................................................................... 38Figure 21: MAN Truck & Bus Interdisciplinary supplier assessment ..................................................................... 41Figure 22: Scania global production locations ......................................................................................................... 43Figure 23: Scania performance 2010 to 2013 by quarter ......................................................................................... 43Figure 24: Scania vehicles per employee ................................................................................................................... 45Figure 25: Flexible production costs (chassis) .......................................................................................................... 46Figure 26: Modular product specification at Scania ................................................................................................ 47Figure 27: Scania’s outsourcing strategy .................................................................................................................. 49Figure 28: Scania supplier categories ........................................................................................................................ 50Figure 29: Scania purchasing structure ..................................................................................................................... 50

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Figure 30: Volvo Group Truck Technology global presence .................................................................................... 54Figure 31: Volvo Group brand strategy ....................................................................................................................... 55Figure 32: The current structure of CNH Industrial .................................................................................................. 59Figure 33: Iveco industrial revenues (EUR million) ................................................................................................... 60Figure 34: Iveco industrial trading profit (EUR million) ............................................................................................ 60Figure 35: Iveco platform strategy .............................................................................................................................. 61Figure 36: FGP shared information system ............................................................................................................... 61Figure 37: Fiat Group Purchasing employees 2009 .................................................................................................. 62Figure 38: Fiat Group annual purchase value............................................................................................................ 63Figure 39: Paccar Revenue and net income 2004–2013 ........................................................................................... 66Figure 40: Paccar revenue 2003 and 2013 ................................................................................................................. 67Figure 41: Paccar financial services assets 2003 and 2013 ..................................................................................... 68Figure 42: Paccar supplier numbers 2000–2010 ....................................................................................................... 69Figure 43: Schematic of Paccar new supplier progress .......................................................................................... 70Figure 44: Global purchasing at Paccar ..................................................................................................................... 71Figure 45: Paccar supplier requirements .................................................................................................................. 72Figure 46: Hino global sales percentage 2012 and 2013 .......................................................................................... 74Figure 47: Toyota purchasing schematic ................................................................................................................... 75Figure 48: Hino module development and production ............................................................................................. 76Figure 49: Changing business model at Isuzu .......................................................................................................... 76Figure 50: Isuzu’s strategic change ............................................................................................................................ 77Figure 51: Isuzu’s global three core business organisation .................................................................................... 77Figure 52: Isuzu vehicle shipment volume FY2011–FY2016 ..................................................................................... 78Figure 53: Isuzu engine production FY2011–FY2016 ................................................................................................ 78Figure 54: Isuzu global performance FY2011 to FY2013 .......................................................................................... 79Figure 55: Indian domestic market performance and CAGR .................................................................................. 86Figure 56: Ashok Leyland domestic market performance and CAGR.................................................................... 87Figure 57: Dongfeng’s Chinese manufacturing facilities ......................................................................................... 94Figure 58: Chinese medium and heavy truck development 2001 - 2012 ................................................................ 95

TablesTable 1: Variation in vehicle utilisation ....................................................................................................................... 20Table 2: Testing requirements for EU, Japan and US regulations .......................................................................... 22Table 3: US emissions compliance costs .................................................................................................................. 25Table 4: Daimler Truck unit sales to November 2013 vs 2012 .................................................................................. 29Table 5: Daimler Medium and Heavy Commercial Vehicle Production Forecast 2012–2016 .............................. 30Table 6: MAN SE revenues 2012 .................................................................................................................................. 37Table 7: MAN Medium and Heavy Commercial Vehicle Production Forecast 2012–2016 .................................... 39Table 8: MAN Truck & Bus consolidated results 2011/12 ......................................................................................... 39Table 9: Scania order and deliveries performance 2012 and 2013 ......................................................................... 44Table 10: Scania Medium and Heavy Commercial Vehicle Production Forecast 2012–2016 .............................. 45Table 11: Volvo Truck deliveries by brand and market ............................................................................................. 53Table 12: Volvo Medium and Heavy Commercial Vehicle Production Forecast 2012–2016 ................................. 54Table 13: Volvo Group Truck Technology global presence ...................................................................................... 54Table 14: Volvo Truck net sales by market and size 2008 - 2012 ............................................................................. 57Table 15: Navistar Medium and Heavy Commercial Vehicle Production Forecast 2012–2016 ............................ 64Table 16: Navistar supplier scorecard criteria .......................................................................................................... 66Table 17: Paccar sales volumes 2011 and 2012 ......................................................................................................... 67Table 18: PACCAR Medium and Heavy Commercial Vehicle Production Forecast 2012–2016 ........................... 68Table 19: Paccar three major commodity groups ..................................................................................................... 70Table 20: Hino Medium and Heavy Commercial Vehicle Production Forecast 2012–2016 .................................. 72Table 21: Isuzu Medium and Heavy Commercial Vehicle Production Forecast 2012–2016 ................................. 77

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Table 22: Tata Medium and Heavy Commercial Vehicle Production Forecast 2012–2016 .................................. 81Table 23: Tata Code of Conduct (TCoC) ..................................................................................................................... 84Table 24: Ashok Leyland Medium and Heavy Commercial Vehicle Production Forecast 2012–2016 ................ 85Table 25: Ashok Leyland domestic market share ..................................................................................................... 86Table 26: FAW Medium and Heavy Commercial Vehicle Production Forecast 2012–2016 .................................. 90Table 27: Dongfeng Medium and Heavy Commercial Vehicle Production Forecast 2012–2016 ......................... 94

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alternative fuels such as biogas, biodiesel and ethanol is important to many customers.

Meanwhile Scania is working very actively to supply trucks for a growing number of market sectors. One example is mining. Scania has added performance steps in order to offer trucks as alternatives to dumpers, Sjötröm explains.

“We have a good product range that works all over the world for heavy-duty applications. At the same time, we are always open to improvements. For example in mining, where we want to become even better in terms of payload capacity and are continuing our efforts to further lower the costs of our customers’ transport tasks.”

Purchasing strategy and supply chain managementScania Global Purchasing is responsible for global purchasing of parts and components, both for new development and those running in production, as well as spare parts and non-automotive products and services

The purchasing function is organised according to commodities and segments, with a Commodity Manager globally responsible within each commodity. Since Scania has a global product range, product development projects are global and can involve all commodities.

Figure 27: Scania’s outsourcing strategy

Source: Scania

Suppliers are chosen according to requirements where the prerequisites for becoming a supplier are carefully evaluated. The company places the same demands on suppliers as on its own production units.

Each supplier is evaluated according to areas such as logistics, quality, research and development, after-sales and company profile.

After evaluation, suppliers are classified in three levels; potential, accepted or qualified, with the aim of developing action plans to develop the suppliers to reach qualified levels.

Scania has production in Europe and South America and purchasing offices on four different continents. Scania’s modular product system – which increases the volume per part number – and common product range globally gives suppliers a good opportunity to work with Scania on a worldwide base.

To ensure that products maintain a high, uniform quality, the company has standardised and documented its work process. This standardised and documented way of work forms the basis for a “normal situation”. By challenging the “normal situation”, the company aims to be able to identify waste and work with continuous improvements.

A modular product programme and standardised working methods are two of the basic principles in the Scania Production System (SPS). This means that components are the same, regardless where production takes place, and the same is designed to apply to the overall philosophies, principles and priorities that govern working methods.

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By continuously remedying deviations, the aims are to create a new and improved standardised working method. By discovering deviations, Scania learns to understand them and seek new solutions. Each deviation should lead to an improvement. Scania’s production philosophy is based on a common way of thinking, usually called “management by means”. Our leadership focuses on working methods, and the result will come because of doing the right things right.

Figure 28: Scania supplier categories

Low High

High

Low

Value added by the supplier

Degree of involvement in product

development

Catalogue

Labour

Mature

Development

Joint Venture

The Third DimensionExcellence in Manufacturing

Source: Scania

SPS is based on never manufacturing more than the next production step requires. When the following production stage signals a need, the preceding ones begin to produce. This eliminates waste in the form of both over-production and waiting time.

This customer order-controlled production system places strict demands on all links in the value chain, including both external and internal suppliers, to always deliver the right products with the right quality at the right time.

Figure 29: Scania purchasing structure

Chassis and Cab Powertrain Quality, project and Strategy

Latin America

Executive Assistant Human Resources

General Purchasing

Legal Counsel

Chassis & Metal Engine

Business Control & Analysis

Cab & Electronics Axles & Gearbox

Quality

Strategy & Processes

Project & Regions

Sales and Services

Purchasing

Source: Scania AB

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What makes Scania’s SPS unique is that it is in operation throughout the company’s global production organisation in eight different countries of Europe and Latin America and that it affects most of Scania’s 28,000 employees. The company believes that SPS today puts it on the absolute cutting edge in terms of production methods and leadership. It is now introducing leadership that focuses on the working methods throughout the Scania organisation around the world, not just in the production network.

In recent years, Scania has been working continuously to integrate key suppliers more closely into its operations. These suppliers are now joining the development and production process at an earlier stage and will participate in operations in the same way as Scania’s own units, including SPS.

Scania sees its suppliers as an integrated part of its manufacturing operation. That means that they have the same demands on their suppliers as on their own production units, which can be summarised as follows:

Quality

• ISO/TS16949 and the PPAP procedure or equivalent system are mandatory.

• Fulfilment of demands.

• No changes whatsoever regarding production process or product without Scania approval.

Deliveries

• 100% on right time.

• All changes from the delivery schedule have to be informed to Scania.

• Packaging according to agreement.

Cost - Sustainable low cost through:

• Long term relations with continuous improvement.

• Profitable suppliers.

• Optimal number of suppliers per segment/ commodity

“You must be really good at your speciality to qualify as a suitable supplier to Scania. In many cases, it’s a matter of attitude and willingness,” says P O Svedlund, senior vice president, Global Purchasing. He confirms that today’s suppliers maintain a high standard, largely due to close collaboration with Scania.

Well before the introduction of Scania’s new product range, a number of important tools and working methods were put in place. These new methods included quality teams (Q teams) and Purchasing On Line (POL). Q teams work at production units, immediately noting deviations discovered upon delivery or during assembly and giving the supplier in question direct feedback. If the problem is extensive or recurring, the matter is turned over to POL.

Each day the POL team has a cross-functional meeting with purchasers, quality engineers and production and service representatives. Its decisions may include visiting a supplier, in which case someone from POL will always show up at the supplier’s premises within 24 hours. Several such trips from Scania take place each week.

Scania’s suppliers are categorised depending on their need of supplier involvement and type of product. Scania groups its suppliers into all five categories, ranging from catalogue to partner supplier.

A key plank of Scania sourcing strategy is to always have alternative supply routes, whether this is achieved by finding two or more competent suppliers, or, if this cannot be achieved, by setting up an internal manufacturing alternative.

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