Volvo: Building Tomorrow
Volvo Construction Equipment recently held an industry briefing at their U.S. headquarters in Shippensburg, Pennsylvania entitled “Building Tomorrow”. During the two-day event, Volvo representatives were excited to share several key initiatives the company has undertaken to help contractors operate more productively today and prepare for the future. Among the topics covered were:
- ActiveCare™ Direct – OEM Managed Telematics
- Volvo Services - Simplified
- Wheeled Excavator Adoption in the U.S.
- How Volvo is Embracing Disruption
Transforming Data Into Intelligence: Controlling Telematics “Noise”
Among the challenges contractors face is the breadth of data collected by on onboard telematics. Historically, seeing benefit from the large amount of telematics data collected has been dependent on end-user interpretation and intervention. James Bretz, Director of Uptime and Connected Services described it this way, “It is a lot of data, we call it a lot of ‘noise’, when you are talking alarms and error codes on machines, there is a lot of information that is gathered and comes through notifications in the web portal that is not necessarily directly actionable.”
“Connectivity for us started out as a way to know where the machine is,” said Stephen Roy, President, Sales Region Americas. “Now it is about remote diagnostics and making sure that if we have a machine problem, we can be ahead of it, we can be proactive, in many cases we actually prevent machines from going down.”
With ActiveCare Direct™, Volvo takes the guesswork out of determining whether an alarm should be addressed immediately or whether it can wait until later. “We put intelligence on top of the data,” according to Dave Adams, Product Sales Manager – Connected Services.
The goal is to focus on “uptime” by grouping alarms into four categories and notifying customers immediately, when there is a Priority One Alarm that is going to cause a catastrophic failure if left unattended and affect the machine’s current operation. “We are truly 24/7 getting that information out,” said Adams. “In many cases, predictively – in multiple weeks or days before the incident happens.”
In addition to the fault code, Volvo sends information to the customer and their dealer that lets them know the probable cause, recommended solution and the consequences of no action. The local Volvo dealer follows up with the customer to develop a plan of action for addressing the issue and reports back to the manufacturer with a status report. Cases are tracked at Volvo so that the system continuously learns based off of results received and improves over time.
Alarms that fall into the next two levels of priority are sent to the dealer since they won’t impact uptime. These fault codes can be addressed at the next scheduled service. When service is needed (priority four), the customer is notified so they can schedule it at their convenience.
Contractors receive monthly fleet reports including a fleet overview, utilization management, efficiency management, uptime management, machine misuse and open/closed case reports. “One of the unanticipated outcomes of this has been an increase in demand for operator training,” commented Bretz. “Obviously fleet managers are learning that there are issues with the way machines are being operated and by doing a better job training operators, they can reduce fuel consumption and they can improve reliability and uptime.”
Volvo launched the ActiveCare Direct program in Febuary of 2016 with key accounts and opened it up to the all customers in July of 2017. Since January of 2018, they have doubled the number of participants. The service is included free for one year with select new machine purchases and can be added at a minimal cost to most machines introduced after 2007 with telematics built-in.
Volvo has also made strides in improving uptime for machines that aren’t linked to ActiveCare Direct — cross-training their technical support group to troubleshoot machine issues for all models. This change has had an enormous impact on average machine downtime, as well as average response time to customer calls.
Volvo has taken all of their aftermarket support offerings and encapsulated them into one new umbrella name with nine distinct categories. This includes the sale of all parts, attachments and services sold to contractors. The goal is to provide a structured framework to fully exploit their comprehensive service portfolio.
Each of the nine categories includes various services that contractors can choose from to create flexibility. Volvo’s Director of Business Development Strategy for Aftermarket, Alessandro Pasa, said that there are over 50 different services that Volvo can offer contractors. For example, the Uptime category includes products like ActiveCare Direct, repair and maintenance services, and Lifetime Frame and Structure Warranties. Fuel Efficiency groups service options such as receiving a Fuel Efficiency Guarantee or setting up Engine Auto Shut Down to lower operating costs.
In addition, applicable new Volvo machines also come with a revamped standard package of services — free of charge, including:
- Standard Volvo warranty
- Four years of free CareTrack telematics service
- One free year of ActiveCare Direct machine monitoring and reporting
- Smart Commercial Account for parts, service, attachments and rentals financing
- A fuel efficiency guarantee for excavators, articulated haulers and wheel loaders
- Access to 24/7 parts online
- Volvo Care Inspection services performed by a Volvo certified technician
- A 24-hour parts guarantee in the U.S. (48 hours in Canada and Hawaii).
Stephen Roy talked about Volvo’s customer success strategy, emphasizing their commitment to the service side, “It’s not just [about] the machine but all the services and support we can wrap around it. It’s the support that our dealers give us, its productivity tools like Co-Pilot, it’s support tools like ActiveCare Direct which also provides feedback on how the operator is performing and how the machine is delivering….it helps our customers become better at what they do.”
The Rise of the Wheeled Excavator and Project Productivity
When Volvo purchased Swedish manufacturer Åkerman in 1991, they bought 52 years of excavator production history in Europe. While Åkerman manufactured wheeled excavators as far back as 1974, they officially took the Volvo name in 1997. The Volvo B-Series wheeled excavator debuted in the United States in 2003, and Volvo is now producing the E-Series with Tier 4 Final engines.
According to Matthew McLean, Volvo Product Manager for Wheeled Excavators, “These machines are incredibly common in Europe. Some of the countries actually sell more wheeled excavators than crawler excavators. There are some strong reasons for that. First and foremost, European cities are incredibly old and were built before there were cars.” This means narrow roads with tight turns, making it difficult to haul or use machines on city streets. McLean emphasized the wheeled excavator “can move in the city infrastructure pretty quick, from site to site, without tearing up pavement and with the short radius, we can get into tight areas and do an operation that doesn’t take away from traffic or cause too much congestion.” Other reasons cited include the prevalence of owner-operators who find it easier to haul everything they need with them and drive the machine to their jobsite and the versatility of the machine with various attachment options.
In the U.S., where cities and towns are less congested and there are fewer owner-operators, wheeled excavators have traditionally had limited product availability. However, with the U.S. expected to have almost 90% of its population living in urban areas by 2045, Volvo has increased their offering from three class sizes to seven over the last two years. This is one of the factors leading to an industrywide adoption growth rate of 23% in U.S. unit sales.
In addition to better product availability, McLean attributes the explosive growth to more exposure, both at trade shows and on the ground. “We use customers who have been successful using the equipment… to help build support with other contractors,” said John Edwards, Government Sales Manager for Cowin Equipment Company – a Volvo dealer in Alabama, Georgia and Florida. When contractors see a successful contractor in their area using a new machine, he explained, it leads to calls asking for a demonstration.
McLean says fleet operators are opting for these machines over crawler excavators, backhoes and truck-mounted excavators for a variety of reasons. When compared to a crawler excavator, the main differences are traction and mobility. A crawler excavator obviously has the best off-road capability but if driving on city streets is a necessary part of any job, the wheeled excavator can travel up to 22 mph without damaging surfaces.
Compared to a backhoe, the wheeled excavator has a lower purchase price and a 360-degree working radius which means no downtime repositioning the machine. In a test of trenching ability, Volvo used an EW60C wheeled excavator against a Volvo BL60B backhoe to dig a 60 ft. long, 3 ft. deep trench. The excavator saved 38% on time (16:12 vs. 26.12) and used burned a quarter the fuel (0.42 gallons vs. 1.63). Another test involved digging a pool, 9 ft. x 9 ft. x 3 ft. and again the wheeled excavator saved time (50%) and fuel (nearly four times less).
When Saltmarsh Industries, a contractor in Massachusetts, replaced their backhoe with and EW160E, “It allowed us to have a lot safer job conditions,” according to Tony Brignoli, Co-Owner. “It doesn’t put the weight of the machine right on the edge of the trench and makes it a lot safer. We used to use backhoes to finish out jobs. By bringing in a wheeled excavator, I’m able to up production because we can do rigging functions and material handling functions while moving the machine at the same time.”
For those contractors looking at truck-mounted excavators, McLean says their only advantage is the ability to travel at highway speeds and lower height restrictions. Wheeled excavators, on the other hand, have a lower purchase price, lower cost of ownership, greater lift capacity and higher breakout force, a 360-degree rotation, attachment versatility, visibility during operation and no CDL required to drive.
Lynn Ralls, County Engineer from Covington County in Alabama maintains 1,300 miles of roads including 660 miles of dirt roads. They used to use a side-mounted mower, a dozer and a track excavator to clear and maintain brush along the roadways but since January have been using a Volvo EW180E. “It’s not even comparing apples to oranges with this machine,” according to Ralls. “It is just a better tool and we are actually reclaiming old right-of-way” versus just maintaining. Ralls likes the wheeled excavator because of its ability to multi-task and how much it saves them in transportation costs to and from jobsites.
2019 and Beyond
As Roy looks at other industries and sees the changes that new technology and innovation can cause, he seems excited, “We know disruption is coming. We are going to be a part of that disruption because we see this as good disruption. It focuses on those things that are core values to us as well as core values to our customers.”
“The construction industry is a laggard in total digitalization compared to other industries. It’s last, it is so ripe for disruption,” Roy added. “Productivity can come from machines for a little bit, the rest of it is going to come from how that machine works with other machines on the jobsite. You just can’t get the 10x productivity from a machine standpoint.”
Among the disruptive technologies that Volvo is focused on over the next 5-10 years are; electromobility , artificial intelligence, automation and connected machines and the internet of things (IoT). And, overlaying everything is a concern for the environment, “How do we reduce emissions, not only emissions on our machines but at our plants and our facilities – we are looking at the carbon footprint in everything we do,” Roy added.
Earlier this year, Volvo rolled out an all-electric wheel loader prototype at a German innovation summit and in August started testing an electric-site concept quarry with Skanska in Sweden. The site, which incorporates electric and autonomous Volvo machines, is running a real production environment for 10 weeks – and is expected to deliver a 95% reduction in carbon emissions and 25% reduction in total cost of operations.
Another technology Roy sees as having potential is augmented reality, saying he sees it as a win-win for dealers and customers, “As an industry, we struggle to get technicians. It’s not been a sexy job.” Volvo is testing the use of iPads and other devices to match up what a customer sees with diagnostics tools so that a service technician can provide technical support without ever touching the machine. “Technology is going to play a bigger role in the way we diagnose and service machines and I think that’s going to bring a new excitement back to the industry.Technology will be a key enabler for our workforce.”
Disruption isn’t just occurring from a technical standpoint in the industry. Contractors are looking for ways to remove some of the financial risk on the jobsite and this is leading to questions about who is responsible for maintaining productivity. According to Roy, they are already experimenting with some key accounts on ways to assume that risk, “They don’t own the equipment, they pay a set amount per hour or per job. All the risk goes off of them. The risk is now on us and on our dealers to maintain uptime, to maintain productivity and to make sure that the equipment is working.”
While it is important to look at the future, it’s also important to not to forget about today. If numbers are any indication, Volvo has that covered as well, the early RFQs we have from customers, the demand from our dealers – our order boards continue to outdo what we did last year at this time,” said Roy. “We see a strong North American market and another good year for 2019.”
A Customer’s Perspective
Tony Brignoli was at the Volvo Customer Care Center testing new machines and was happy to spend time talking about his experience with ActiveCare Direct. He is Co-Owner and Vice President of Saltmarsh Industries, Inc., a small, family owned contracting company in Massachusetts. Saltmarsh owns 21 pieces of Volvo equipment and purchased their first machine with ActiveCare Direct in early 2017. Brignoli made it clear that he believes his Volvo machines are a key to his company’s success. “We are a very small family business. Our equipment allows us to produce big numbers and get a large amount of work done in a short amount of time.”
What was your level of involvement with telematics prior to ActiveCare Direct?
“I had only used CareTrack (Volvo’s Telematics System) for basic tracking of where my equipment was and for setting parameters and machine netting so that if somebody stole a machine, I would be aware that the machine was moved. It showed you certain codes but it was too time consuming to go in and pull out the code for each individual machine. I could spend an hour in my truck doing that only to find out that it had a faulty oil sensor and we could still work all day.
“So with the advance of this and Volvo monitoring it (ActiveCare Direct), it makes my job easier and gives me the most information in the fastest possible time.”
How does ActiveCare Direct help you?
“Last week we had an incident on a machine … and I received an email within 15 minutes of that code coming up on the machine with possible solutions, possible causes and it gives me a list of three things to do. My dealer is also notified as well – and if it is severe enough, they will contact me immediately. I’m a very handson company so I tend to take on a lot of the repairs myself and with the ActiveCare, it really gives me the ability to narrow it down quickly and keep machine uptime going.”
What are some benefits of ActiveCare Direct?
“It has really helped me to hone in on my bidding skills. I can monitor how much fuel we are using, how much uptime we have, how much idle time we are using and the cost of that. Basically, the lower the fuel number I can get, the lower my bid price is – the more jobs I can take on. It also monitors machine abuse. Machine abuse equals more parts, more downtime and being able to really narrow down what is happning to the machine on the monthly reports has helped.”
Are you able to manage the Priority One alerts that come your way?
“I don’t overlook any of them. If it says it’s not severe, then I may not worry about it until the end of the day. If it looks like it could derate the engine, and we could have an engine issue, that’s when I get on the phone with the dealer and see what our next steps are going to be. Some stuff I’m able to take care of on the site, some stuff I may have to put that machine aside and we might have to wait for a dealer representative to come give us a hand with it.
“A lot of the issues that we’ve had, that have been very few and far between, we have been able to manage onsite – no problem, because ActiveCare gives me a very good description of what the possible causes are and three or four possible solutions to try. Some of them are very simple solutions to try before you get a dealer to drive two or three hours out to a jobsite.
Since you started with ActiveCare Direct, what percentage of the repair work you’ve had to do has been given to the dealer?
“As of right now, none. I’m handling everything myself but the quality of the Volvo product that is put out really eliminates a lot of the downtime issues and good preventative maintenance eliminates a lot of downtime issues.”