Russia: Racing ahead?

Have you noticed the press articles about how many other economies are doing better than the Euro zone countries and even the UK? We certainly have.

It has been part of our strategy even to investigate these large growing markets. Last week I attended a Russian Aerospace and Automotive sector event organised by the UKTI.  Although this did focus on the passenger car market and commercial aircraft market, it was clear that the expectation of Russian indigenous manufacturers are intending to compete with foreign imports, as the impending admission of Russia to the World Trade Organisation, will open up this market to foreign manufacturers imports. The standards being adopted are akin to those in Europe and equivalent to ISO or DIN, and in some cases almost copied. We were however warned that it is essential to check that we meet necessary legislative requirements which are and will remain local, even if the requirements are the same, approvals still need to be sought.

I have seen reports for also that suggest that the Russian Government has to invest heavily in transport, and that Truck builders need to make 1000’s more trucks, just to be able to deliver the ever increasing amount of construction and agricultural vehicles that this market will be demanding over the next 5 years.

With events such as the Winter Olympic Games in 2014 at Sochi, and the World Cup after Qatar, there is a huge investment in infrastructure. This is driving the demand for new construction equipment, and the manufacturers are quick to react, designing new vehicles to compete for their slice of the market.

The Bus market too is on the rise, and according to Truck and Bus Builder, the Russian Bus market is up by 9.3% overall with some builders reporting a 47% increase in sales. And these vehicles are no longer the stereo typical old fashioned vehicles years behind the west in terms of technology and design. They are up to date, modern looking vehicles, packed with the latest technology in transmissions, retarders, and even Hybrid vehicles. This is one of the reasons that we are exhibiting at Busworld Russia this year. We believe that the Russian builders have advanced so much in the last few years, that foreign imports will find it hard to compete, and the fact that so many manufacturers are putting out new vehicles, means that the opportunities for companies such as ours that can offer design as well as rapid turnaround, will definitely have an advantage over some of the home grown competition.

We are very excited about the opportunity to enter this market. Are you thinking about Russia as a target? What are your fears or concerns?

Extending Vehicle Life

There has been in the last 12 months a trend towards extending vehicle life, in particular in the bus industry. The bus industry in the UK and across Europe was not affected as quickly as the car industry as far as reductions in orders was concerned, when everyone else was feeling the economic crisis bite. It took longer before operators reigned in their spending on new vehicles, but consequentially it bit harder and deeper and will take longer to recover. With extra orders for London 2012 bolstering the bus industry in the early part of the year, hopes are high for a continuation of the recovery. However, during the economic down turn, a burgeoning refurbishment industry grew up, and is now an attractive alternative to new vehicles. Bus operators are extending the life of their vehicles buy refurbishing the interiors with new seats, ceilings and even LED lighting, and repainting the outside with new livery. To the customers using the bus they look like new buses. What lurks underneath however? We have noticed an increase in aftermarket sales over the last 18 months, which bears out the extension of the vehicle life, but along with a demand, come profit opportunities, and we are aware that there are many imported products from low cost countries floating around the aftermarket. Purchasing OE spares may seem a bit against the grain as we all know they are expensive right? OE parts however, have been tested specifically for that application, and in some, in fact many applications especially from us, have even been designed specifically for the loads the part is expected to carry. The same cannot always be said for some imported pattern parts, which may look the same in size and shape, but the material specification and design of the internal components may be nothing like the same.

As our products are safety critical, we spend a lot of time making sure they are fit for purpose, and stand by our products performance. If a ball joint were to collapse due to fatigue, it could literally be fatal. If you are extending the life of your vehicles, be sure to continue to fit OE parts for safety critical items, you won’t regret it.

Design your own products?

Here is an interesting idea from Agco Design the Tractor of your Dreams.
They are running a competition whereby you design either the whole tractor or elements of it, and the winner gets to go to the Valtra factory, meet the designers, and take part in a customer clinic to help develop the next generation of tractors.
You could take this one of two ways, the Agco designers are all out of ideas, or it is a very clever way of inviting the end user to offer up ideas that they would pay extra for.
I am not so sure we could do the same for steering. I wonder how often our customers (vehicle builders), talk to the end users about what they would like to see. What if we were to ask Bus drivers what they find most infuriating about the steering on the buses they drive every day, or tractor drivers what adjustments they would like to see on the steering column to make their life easier, then design products around those requirements, instead of those that our direct customers tell they want. I guess a lot of businesses just assume that their customers will do that work, but what if they did it instead?
The Chartered Institute of Marketers will tell you that the most successful companies are those that make and sell what the customer wants. B2B companies regard their customers as other companies, because that is who they sell to. But at the end of the day, they are not the end user. Someone told me once that if Henry Ford had asked his potential customers what they wanted, they may well have told him, a faster horse that doesn't need to eat, sleep or go to the toilet. Not that they wanted a car. His solution was to develop a way to make cars as cheap as horses to own, with all the benefits outlined above. For B2B companies, the hard bit would be to sell the fact that the customer is willing to pay more for the benefits. I think that this is a great way of testing the market to gain competitive advantage. Does anyone know of any other such schemes where companies are asking their customers to design their products, or know of any in the past that were successful?

Trade Shows, Marketing opportunity or pain the rear?

For years (from 1969 till 1996) Pailton grew organically without ever attending a trade show. About 16 years ago, Pailton exhibited at the IAA commercial vehicle show in Hannover. We have been exhibiting at this Bi Annual event ever since. If you ask around within the company, if it is worth exhibiting at this show, you will most likely get the same mixed response you would get form most SME’s.

One of the biggest issues is tracing enquiries that lead to new business or expanded business back to the show, or to a particular event to justify the return on the investment in going there in the first place. Our last expedition to this show was somewhat disappointing, which could well have been attributable to the general economic downturn. However after a review of the meetings that did take place, and one definitive new customer gained from the show, we have decided not only to go again, but indeed to several other shows this year.

Trade shows are one of those things that if you are going to do, then do it properly or not at all. Budget stands are perfectly functional, but will they attract passing trade and make you stand out from the rest of the Chinese and Turkish component manufacturers all doing the same? Also, if you don’t bother telling anyone you are there, how will you ensure footfall to your stand? If you don’t differentiate yourself, how will anyone know your USP?

This year we are extending our budget for the stand design and build, planning on a campaign to promote our presence, including an enhanced entry in the show guide.

A previous post talked about Social Media, and the opportunity to use social media to promote your presence at a show can be a pretty powerful tool, if you spend the time researching your targeted customers.

We will also be exhibiting at FDIC 2012(Fire service Training forum and Exhibition) in Indianapolis. We only have a small stand, but we have splashed out on a reusable pop up display stand with US specific roller banners. We have created an event on face book, befriended all the manufacturers on Facebook and followed them all on Twitter. We frequently mention them all in posts and Tweets to promote their presence and ours as well as the event itself. Think about it, would you mind if one of your suppliers advertised your presence at a show for you? No body minds you mentioning their name to all your followers. We have also used Linked in to invite specific contacts to our stand, and will be using our YouTube channel to post videos of the event before, during and after, all the while posting and tweeting about the show. We will also be encouraging the visitors to the stand to like us on Facebook and follow us on Twitter, so that subsequent posts and tweets have a wider reach.

We will also be exhibiting at Busworld Russia 2012, and will be doing the same things. Russia is a whole new market for us, so the benefits should be easily measureable. We are planning to make sure we find and invite as many of the target customers as we can, just hoping that they will stop by is like playing roulette with your mortgage money.

If done correctly then trade shows can pay off. The cost however is not just the stand space and build, someone has to book hotels flights, stand space, order parts, order promotional items etc, quite a lot of administration, in addition to the cost of travel, hotels, and the personnel manning the stand and not actually doing their normal jobs, then the recovery time to catch up on the work not done when at the show. It all sounds pretty horrific and those of you that have done trade shows know just how tiring and stressful it can be, especially for an SME. Others in the company see it all as just a big jolly, almost like a week’s holiday, eating out every night on expenses. Well it really isn’t.

So, trade shows, Excellent marketing opportunity or pain the backside? Well it depends, done properly it can produce great contacts, provide new business, open new markets, and even develop new suppliers, and working partnerships.

That’s why we are at FDIC in American Fire Truck market, Busworld Russia (surprisingly) in the Russian Bus market and IAA Commercial vehicles, extending our global reach and developing new markets. What do you think about trade shows and exhibiting?

Apprentices, are all schemes equal?

We don't think so. A number of apprenticeship programmes have recently been slated in the press for being ineffective and not offering the necessary training required to develop the skill sets needed. 

Pailton Engineering’s Managing Director John Nollett is resolute in the belief that many apprenticeship schemes fail because employers are not providing a sufficiently rounded programme to inspire interest.

Pailton has been running a successful apprenticeship scheme for over 17 years and leads by example.  Many of Pailton’s apprentices are still with the company having grown and developed to become managers, team leaders etc all of whom share an infectious enthusiasm for both the company and their employers.

It is a view which is shared by the company’s three latest recruits – Daniel Baker, Ellis Thompson and Lewis Brennan all of whom are still studying at the Training college MGTS for their first year’s BTEC training before moving into the business for their hands on training. 

All share a keen interest in engineering and a desire to succeed.  Whilst at school Daniel studied an Engineering Diploma although was also tempted by a career in sport.  Engineering however won through as the practical option and he is enjoying all aspects although lists design as a favourite at the moment. 

Daniel commented:  “This is a great opportunity.  I love practical things and to be able to learn on the job whilst getting paid at the same time is great.

“Having had the opportunity to look round Pailton I am really looking forward to working my way around the departments.  I like design at the moment but it could be that I enjoy something else more once I get the opportunity for some hands on training.”

At 16 Ellis, whose Grandad was a toolmaker, is the youngest member of the group.  He had his sights set on an engineering career from a young age and he too studied for an Engineering Diploma as well as Graphic Design, Resistant Materials and IT.  He is excited by the prospect of joining the Pailton operation when he finishes his first year at college.  He commented:  “When I first walked into Pailton and saw all the steering systems I knew that was where I wanted to be.”

Whilst engineering wasn’t Lewis’ initial choice of career he now knows he has made the right decision.  Having studied a Uniform Service course at school, all Lewis wanted to do was join the army and fight for Queen and Country but his family had other ideas and he was forced to look at other career options.  His next choice was to become a fireman although was not really what he wanted and so took the decision to look for an apprenticeship.  He was quickly successful and was taken on by Pailton in the summer of 2011.

“I am really enjoying it – Turning at the moment is my favourite module  – although I am looking forward to developing further skills and getting the opportunity to put the theory I have learned at college into practice.  I just really like getting stuck into what I do.”

HR Director Andrew Lancashire not only keeps a watchful eye on the three new recruits but on all the apprentices as they work their way through the programme

It is an approach which clearly works and what is clearly evident amongst all the apprentices is not only the commitment but also loyalty to Pailton – qualities not often found in industry today.

Two apprentices now in their third year share the same level of enthusiasm as their younger counterparts.

Both are now studying for their HNC on a day release.  Sean Reynolds, 21, joined the apprenticeship scheme having left school after his first year of A levels.  “I was debating whether to go to university but didn’t really know what I wanted to do.

“I thought engineering would be a challenge and when the opportunity came up for me to go to MGTS I took it.  I enjoy the machining side but still want to keep my options open.  The fact that I have been able to work around the departments has been really helpful as it has enabled me to see each stage of what Pailton does and how it all knits together.”

Dean Reeves, also 21, joined Pailton having originally studied plumbing at college. He was unable to get a job and was recommended to MGTS.  Having already worked on the shop floor, production and quality, Dean is now in the design department where it looks as though he will stay.  He commented:  “I have thoroughly enjoyed the scheme to date.  To be able to apply our college work in a practical way has been hugely beneficial.

“Design without doubt is my forte -  I like being creative and using my own initiative and the design department lets me do just that. “

Getting Social, is it for Businesses or just kids?

There is a lot of talk in marketing circles about the buzz around Social Media. There is also a lot of misunderstanding about what Social media is. Of course everyone knows that social media is Facebook and Twitter right? Well yes, they do come under that banner, but the fact that they grew up being used by people to chat to their friends, does not mean that that businesses cannot use them to communicate with their customers, suppliers, and even just fans. Social media is also a lot more than just Facebook and Twitter, which are really social networking sites. Social media is any digital space, where the content is created and shared by the users. There are many places that this happens, Wikipedia, YouTube, Picassa, Flikr, Vimeo, Google Plus, Linked In, Blogs, Forums, Trip Advisor, Redit, Revoo, to name just a few.

Many people do not believe that there is any benefit for business to business companies in social media, but there may be for Business to Consumer organisations. It may be true that the is more scope to reach consumers, but don’t be fooled that you cannot reach your target markets with Social media, in some cases, your customers are already active in these media, if you don’t get active your competitors could steal a march on you!

The main issue from a marketing perspective is that social media is not a place for traditional advertising. It is not a broadcast media, it is a place for people to engage with each other, and that includes businesses. Many companies, and even bands, or charitable organisations, do not allow fans to post to their wall on Facebook. Why not? You are preventing your fans from interacting with you and your other fans, blocking up the viral flood.

The trick is to find out where your target markets are active, and meet them there. We now have Facebook, YouTube, Twitter, Google Plus, Vimeo, Picassa, Flickr, Wikipedia articles, Linked In, and a blog. We make a concerted effort to write, share and tweet information that will interest our fans, followers, and people in the industries that we serve. We always try and pick related areas, but don’t just bleat on about us. We try and stimulate conversations and discussions and you would be surprised about who joins in, so why don't you? Re-tweeting someone else’s content might go against the grain, but it costs nothing, and could encourage the re-tweeted to re-tweet you. You end up positioning yourselves as thought leaders and through that build your brand in ways you may only have previously dreamed of. Don’t be impatient, unless you have a very funny or shocking video; don’t expect to be a viral hit on day one. It takes time, keep at it and build your fan base slowly, it is like networking, but with people you may never meet in person.

Will Electric Steering ever make it to Heavy Commercial?

As the trend for passenger cars and light commercial vehicles is toward electric power assisted steering (EPAS) and ever heavier vehicles are converting to EPAS such as the Ford F150 Pick up truck, how much longer will it be before Heavy Commercial Vehicles get EPAS?

EPAS was always discounted for heavier vehicles due to the electrical current requirement to assist the steering effort for vehicles with such a front axle weight, even though they are all 24v as opposed to 12v for passenger cars and Light Commercial vehicles.  The Ford F150 above and the next generation of Range Rover are already finding 12v sufficient; the advances in motor technology are already making it possible to put EPAS on heavy 12v vehicles. For some time there has been talk that trucks will need to go to 48v due to the ever increasing load on the battery with all of the electrical systems, and recent articles in the commercial vehicle press suggest that 48v is only “just around the corner” (interesting steering connection) due to ever increasing number of electrical systems requiring heavier current draw. Add to that the increasing number of Hybrid vehicles, especially in the light of Government initiatives in the bus market, with the Green Bus Fund in the UK being mirrored in other EU countries to meet governmental commitments to the Kyoto agreement, more current will become available to enable EPAS on heavy vehicles.

However, EHPAS (Electric/Hydraulic Power Assisted Steering) is a halfway house, where an electric motor is driving the hydraulic pump, but all the rest of the system remains the same. Some small fuel savings are possible as the pump only draws current when there is a steering demand.

However I believe that the cost of development for EPAS for such vehicles and the number of production vehicles that can carry the development cost will delay its introduction until there is another driver.

One of the drivers for the passenger car industry to take up EPAS has been fuel efficiency and emissions. In passenger cars, significant fuel savings can be realised due to the power for the assistance only being required when the steering wheel is actually moved, and the amount of power required is directly proportional to the effort, whereas traditional hydraulic power assist requires an engine driven pump to be pushing fluid around the system even when the vehicle is stationary. This fuel saving of course immediately translates to reductions in emissions.

The savings that could be achieved in heavy commercial vehicles is similar, but as a percentage of the current fuel consumption of such vehicles is small beans. A further driver however could be the introduction of steer by wire (SBW). The latest revision of ECE R79, the European regulation of steering in motor vehicles, makes provision for steering systems that have no mechanical connection between the steering wheel and the road wheel. New electronic architecture is required to provide for sufficient redundancy in the event of failure, but agricultural equipment has been using auto steer on tractors and harvesting machinery for about the last 10 years, and a report by the Steer By Wire working group www.ttagroup.org suggests that steer by wire will have reached 25% of the agricultural vehicles by 2015 and 100% by 2018. Currently the off highway market has more drivers for SBW as it is easier to integrate auto steer, but that would become even easier with EPAS.

I believe that the heavy commercial vehicle industry will not go to EPAS until such time as SBW is proven in off highway vehicles, 48v becomes necessary and the increase in hybrid vehicles and the development of them reaches a level that makes good economic sense. Increases in fuel prices and the drive for more efficient vehicles will speed up the process, but I remember 15 years ago when everyone was talking about electric steering being the future. It has taken this long for the car industry to build confidence in electric steering, and the drivers for it to become financially viable to change, so therefore, although I would expect to see both steer by wire and EPAS to become reality, I would not expect to see it prevalent before 2020. What are your thoughts?