All challenges bring opportunities
An interview with Wilson Lirmann, President of the Volvo Group Latin America
1. In this digitalized and more automated world, how does Volvo see its future?
The Volvo Group is at the forefront of autonomous technology in commercial vehicles. Volvo Trucks is developing a new solution for repetitive transport operation, in high precision markets, such as transport between logistics centers. The solution, called Volvo Vera, consists of autonomous and electric vehicles, connected remotely to a transport control center.
In addition, Volvo is testing different levels of automation in real operations, such as trucks for the mining segment in Sweden and garbage collection in England. There are also autonomous prototypes of buses and construction equipment under development.
In Brazil, Volvo made the world’s first commercial delivery of trucks with autonomous technology. Seven units of the Autonomous VM were delivered to the Usaçúcar Group. A project carried out in partnership between Volvo do Brasil and engineering in Sweden, to operate during the sugarcane harvest. The results in operation efficiency and loss reduction are excellent. This solution does not exclude a driver, but rather the driver remains inside the vehicle to monitor the operation and perform other functions.
2. What lessons has the company learned from the Covid-19 pandemic? What should be the changes relating to: Current supply chain network strategy; resumption of operational efficiency; development of internal leaders for efficient management of remote teams?
It is certain that we are dealing with all the points you have listed and more. The management model for excellence, which we improved in the past decades, is the driver of our routines and organizational development.
At the same time, the current context makes it very clear that we live in an environment of volatility, uncertainty, complexity, and ambiguity – the infamous “VUCA.” PWe aim to create a foundation that gives us consistency, even in the face of volatility. With this stability, we seek to develop the adaptability that reality requires. To face uncertainties, we build teamwork and trusting relationships throughout the value chain, ensuring that the best ideas are connected, and their implementation is efficient. We share the dilemma of complexity and ambiguity with our stakeholders and undertake additional endeavors to achieve common goals. I believe that a strong and thriving culture sets us apart in facing new challenges. As Peter Drucker said, “culture eats strategy for breakfast.”
3. What are the company’s main methods for restarting with greater efficiency and agility after this period of reduced operations?
All major challenges are opportunities for learning and thriving.
Despite all of the negative aspects, the crisis gives us an opportunity to rethink everything we do.
Not just our plans and strategies but also our habits. Due to the business environment, we made many adjustments in recent years. Even so, we put our crisis management model into practice, by involving the entire leadership. We have 3 main priorities:
- The health and safety of all the people who work with us
- The success of our customers
- The maintenance of our value chain, not just of Volvo.
Disregarding the worries that the situation naturally generates, we had surprising results in acquiring the engagement and contribution of everyone, which gives us pride and confidence that we will overcome this period together.
4. What are your expectations for the restart of the market in Brazil and Latin America?
In 2019, we celebrated the 40th anniversary of Volvo in Brazil, resuming important volumes after one of the worst crises in 2015/2016. The commercial transport market started to recover, and we were expecting a significant recovery in economic and business growth. In February 2020, we announced investments of one billion reais, but in March, the prospects changed completely. The pandemic abruptly interrupted the anticipated growth. The figures of Anfavea (National Association of Vehicle Manufacturers) show a 19% drop in truck sales in the first half and a forecast that it will reach almost 40% by the end of the year. In this scenario, we believe in a slow recovery, starting in 2021, in some important sectors of our economy: agribusiness – which will have one of the largest harvests in history and which will require transportation infrastructure – followed by processed foods and commodities.
5. Why did Volvo Trucks Brasil decide to invest in a Lean journey for the commercial area? What performance benefits have already been identified with this process?
The Lean journey is one of our pillars. Volvo implemented Lean Thinking over 20 years ago, in the industrial area, and achieved excellent results in eliminating waste and involving teams in solving problems and looking for opportunities. This success has encouraged us to accelerate the expansion of this philosophy throughout the value chain, from suppliers to dealers across the country. Through the Volvo Production System concept we place the customer at the center of everything we do, as well as the systematic pursuit of waste elimination. The expansion of the Lean journey serves as a reference for the entire Volvo Group.
6. What positive impacts is the Lean journey creating in terms of leadership behavior in commercial processes?
Among the success factors in implementing Lean methodology, I highlight the engagement of the entire team, because, more than changing processes or including new technologies, it is necessary to create a profound cultural change in the organization. By involving the team in the journey, they have the opportunity to transform their mental model, allowing them to see the value stream and waste more clearly. In addition, they develop the ability to work as a team, solve problems and create value, above all, for the success of our customers.
7. In this moment of crisis as companies face cashflow difficulties, do you believe that investing in a Lean journey can be a good option to prepare for a more effective recovery?
Without a doubt. Companies will have to maintain consistency in their pursuing measures to face the challenges of the pandemic and adapt to the complexity that we will face in the coming years. Leaders will continue to play a fundamental role and Lean philosophy is extremely efficient for developing the mentality we want, now and in the future. It will be a long journey, requiring a vast amount of resilience. In our experience, as we acquire new methods, resources and energy in the organization begin to free up in the medium term. In addition, we multiply learning and recognition, allowing everyone to benefit!
Present in Brazil since the 70s, the VOLVO trucks began the production in the city of Curitiba in 17. Since then, VOLVO of Brazil has developed technologies and innovative solutions, both in its products and in production processes and logistics, distribution services and spare parts. VOLVO did this, always acting bravery to satisfy its customers through quick and intelligent, practical solutions. Recently the VOLVO has innovated by launching several new products to meet the needs of an increasingly and sophisticated demanding market, with improvements in safety, comfort, fuel economy, navigation and emissions. In the Decade of 0 Curitiba´s factory went on to improve its processes by introducing the concept of Self Managed Teams. In early 2000, the Curitiba´s factory introduced the concepts of Lean Manufacturing, the embryo of VPS- Volvo Production System, concept that would later be adopted globally. In this journey, Volvo recorded significant gains in the safety of its employees, the quality of its products and in the industrial productivity.