Volvo CE: A Digital Innovation Case Study

Key Takeaways

• PLM helps ensure that product data is accessible and trustworthy across enterprise teams and systems—making it possible to strategically collaborate with partners and customers.
• Manufacturers can use PLM to build a foundation for a wide range of new revenue and cost saving opportunities.
• Unlike PDM, which is an engineering tool, PLM is an enterprise system that can help reduce time to market, prevent costly manufacturing mistakes, and improve manufacturing productivity and efficiency.

Digital Innovation at Volvo CE: How They Did It

Volvo Construction Equipment (CE), headquartered in Gothenburg, Sweden, is a leading international manufacturer of premium construction equipment. Volvo CE supplies products and services to more than 180 countries around the world. 

With over 180 years of construction expertise, Volvo CE is no stranger to mergers and acquisitions, each of which has impacted its product and service portfolio. Further complicating its IT landscape were Volvo’s four 40-year-old product data management (PDM) systems that also required a significant investment to maintain. 

Volvo CE knew that despite the investments it already made in these old systems over the years, it needed to transition to a unified product lifecycle management (PLM) system—one that would provide an authoritative source of truth across engineering, operations, suppliers, and customers. Volvo CE decided on PTC’s comprehensive PLM solution for data governance and traceability.  

Digital Innovation with PLM

Committed to innovation, Volvo CE had a pressing need to improve their legacy systems. Like other manufacturers, Volvo CE has distributed teams that were working in disparate systems which means that processes were fragmented, redundant, and inconsistent. Insufficient transparency led to a lack of integration of projects, products, and processes. 

Volvo CE was driven to achieve several key strategic initiatives including portfolio growth, excellence, and innovation, with an eye towards sustainability and environmental care. To achieve these objectives, it needed to unify its product development systems with a goal of continuous improvement. To do so, Volvo CE set out to establish a PLM-enabled digital thread.

Digital Innovation Best Practices from Volvo CE

Volvo CE chose Windchill, PTC’s enterprise PLM solution for its out-of-the-box capabilities and PTC’s Value-Ready Deployment (VRD) methodology—a preconfigured, flexible configuration built upon 25 years of PLM best practices. By doing so, the manufacturer streamlined its processes associated with product development toward those of the VRD’s, as you can see in this digital innovation case study. 

To transform their organization long-term, Volvo CE knew that they needed to break down organizational silos and create a consistent product architecture, enabling all teams to collaboratively manage product hardware and software complexity in one place. To do so, they decided to establish a PLM foundation, commit to collaboration, and made digital transformation an executive priority. 

Establishing a PLM Foundation

PLM makes it possible to achieve effective integration of engineering processes, tools, and people—negating duplicate parts, redundant designs, and more. 

As we can see in this digital innovation case study, with the new product architecture, Volvo CE is able to share and re-use designs and subsystems across the entire portfolio of construction vehicles, driving faster time to market for new products. In terms of production and the supply chain, modular production will enable better flexibility and scalability across global operations. 

And, with model-based systems engineering (MBSE), Volvo CE will be able to capture functional requirements and link them to simulations and product structures.

With unified engineering tools that provide governance and traceability for real-time visibility of upstream and downstream data, Volvo CE has increased efficiency and reduced costs by removing manual work and handovers and improving re-usability. This has also eliminated duplicate entries and provided a simple way to find and share parts across the ecosystem. 

By building a PLM foundation, Volvo CE is breaking down silos and realizing operational improvements across engineering, production, and supply chain teams. 

Committing to Collaboration

Volvo CE's leadership is dedicated to initiatives that are committed to collaboration at its core. When they decided to use Windchill to improve efficiency and performance across the organization, they established a best-of-breed IT solution that was able to motivate its employees and increase global collaboration and process optimization from planning/requirements management, to product development, sales configuration, production, aftermarket, and phase-out. 

By implementing a PLM-enabled digital thread, Volvo VE could more easily manage increasing product complexity and focus on innovation and collaboration. Learn how they did it in this digital innovation case study.

Digital Transformation as an Executive Priority

The success of any major initiative is heavily reliant on buy-in from the entire company—starting with the executive team. For Volvo CE, digital transformation was an executive priority that was demonstrated repeatedly throughout many recurring meetings with cross-functional teams, encompassing employees from sales, marketing, IT, manufacturing, and aftermarket services. Employees of all levels, from senior VPs to operational experts, were involved in developing a strategy and value flow.

The leadership team knew the importance of nurturing the initiative across both technical and change management obstacles. Weekly meetings focusing on the value flow helped define team-level goals and align implementation procedures. Volvo CE also used lean principles to encourage change from the bottom up, empowering each team to contribute to defining the vision and value in making the change—thereby anchoring the foundation for long-term success. Get an in-depth look in this digital innovation case study.

Digital Transformation for Future Differentiation

As a global, heavy equipment manufacturer, Volvo CE faces numerous pressures in the market—from rising costs to increased customer expectations. In a fast-changing marketplace, digital transformation plays a key role in empowering companies to rise to new challenges. 

Windchill has been adopted organically into the workflows of the entire organization, covering all of Volvo CE’s fundamental product lifecycle needs, and has quickly become the only source of truth related to its products and architectures’ lifecycle. See how they did it in this innovator spotlight.

With the PLM foundation as a backbone for the extended enterprise—enabling 24-7 global product development and a concurrent way of working—Volvo CE can implement changes faster, speed up new product introduction, and create design variants more quickly.

Volvo CE has laid the foundation for broader value across the entire organization, giving employees access to capabilities that allow them to better contribute to the company mission of building a better tomorrow. By the end of 2021, Volvo CE will have trained over 3,000 users and successfully implemented Windchill in 15 sites. 

Moving forward, the PLM foundation will supercharge Volvo CE’s efforts across its product offerings, production, and supply chain. Volvo CE has positioned itself to keep unlocking benefits into the future—and you can too.