Fleet Maintenance 1220 - 10

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FROM THE EDITORS

What vertical integration
means for fleets
Truck OEMs are looking to vertical integration to streamline
manufacturing, and that's not necessarily a bad thing.

By David
Brierley
Editor

@ DavidBrierleyFM

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Vertical integration brings various parts of
manufacturing in-house, meaning parts of the
product that were otherwise made by outside
contractors are now made by the product
manufacturer. In recent years, this practice
has become more prevalent in the heavy duty
commercial vehicle industry. During the
Technology & Maintenance Council (TMC)
Fall meeting, panelists discussed this shift
and what it means for fleets.

Before integration

During what some might call the " golden age "
of heavy duty truck production, a fleet had
virtually endless possibilities when it came
to spec'ing new vehicles.
Spec proposals were very detailed back
then, said Jim Cade, vice president of Fleet
Services at Ruan Transportation Management
Systems. Cade said fleets were able to get
granular when spec'ing trucks. For example,
fleets could specify items such as the fuel
filter systems, brake lines, brand and length
of the slack adjusters, and even the crack pressure of brake valves.
This approach to spec'ing trucks led to
inefficiencies, however, especially when it
came to vehicle maintenance and repair.
Since the parts and components included on
trucks varied widely, technicians had to learn
about a larger variety of parts, components,
and systems; nothing was assumed to be the
same from one vehicle to the next.
" Managers had to contend with training
mechanics ... and the more time they had to
learn about components, the less time they
had to work on the trucks, " said Tom Berg,
author and longtime industry expert.
Complex spec'ing also made manufacturing
heavy duty trucks more cumbersome - and
costly. OEMs had to ensure that all components worked together to create a fully functional truck. They also had to source these
parts and components, adding time and
complexity to the manufacturing process.
Then, an industry shift occurred that
helped ease these concerns.
Berg said that in the 1980s, truck OEMs
started to reduce the number of available
options to reduce complexity. They created
" standard " tractors which included a standardized list of equipment.

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Vertical integration today

Many think of vertical integration as an
integrated powertrain, but it is much more
than that, said Johan Agebrand, director of
product marketing at Volvo Trucks North
America. Integration is facilitated by communication, he said, and that can determine
how well systems work with one another.
The advanced driver assistance systems
(ADAS) on today's trucks are one example
of this communication between systems. An
adaptive cruise control system uses cameras, radar, and other sensors to monitor traffic in front of the truck. If the vehicle in front
of the truck begins to slow down, the system
recognizes that the truck needs to slow as
well to maintain a safe distance. The system
reduces fuel input and applies the brakes
as necessary.
Integration between these systems is
imperative, and easier to achieve when one
manufacturer makes them all.
These systems need to be in sync in order
for safety systems to work well, said Len
Copeland, Detroit product marketing manager at Daimler Trucks North America. It is
more difficult to achieve consistent results
using components sourced from different
third-party suppliers.
Agebrand said countless systems rely on
integration to operate smoothly and safely.
He provided other examples including downspeeding, automated manual transmissions
(AMTs), driver information displays, steering
systems, predictive cruise control, automated load sensing systems, over-the-air (OTA)
programming, and telematics.

Concerns and advantages

One potential drawback for fleets when it
comes to vertical integration may be OEMs
installing proprietary components, Berg said.
Service and/or parts for proprietary components would be available only from OEM dealers, which could lead to delays depending on
dealer inventory.
Another downside is the lack of customization available when spec'ing new vehicles.
Where previously there were a multitude of
options, buying a truck is starting to look
similar to purchasing a passenger car, with
available equipment groups or packages
which bundle options together. And, while
some customization is still available, most
options come from the OEM.
" I'm not a fan of vertical integration, "
Ruan's Cade said. " It takes away some of
my control as a fleet manager. I like seeing
my creations come to life ... knowing that
it was spec'd to my fleet's requirements. I
know what works best for my fleet. I don't
like being told what's best. "
Cade acknowledged, however, that these
are his personal viewpoints based on emotion.
When he makes decisions for his fleet, they
are based on logic, and that side of him recognizes the advantages to vertical integration.
" Standardization of offerings brings economy of scale, " Cade said.
If OEMs can provide the same components
around the world rather than just in localized
economies, they can spread the development
cost thereby reducing the cost per unit. This
can also simplify supply chains, meaning
faster procurement of parts and components.
Vertical integration does still allow for
some custom spec'ing of fleet trucks, and it
can also make them less expensive, more
reliable, and easier to service.

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Fleet Maintenance 1220

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