The second industrial revolution began in the late 19^th century and continued into the early 20^th century. Their main drivers were the introduction of electricity and the assembly line in the automotive industry by Henry Ford in 1913. As a result, production became much faster, as each employee concentrated on only one work unit.

The third industrial revolution began in the 1960s and was significantly influenced by the development of semiconductors, mainframe computers (1960s), personal computers (1970s and 1980s) and the Internet (1990s).

The Fourth Industrial Revolution, also known as Industry 4.0, is the era of Digitalisation. The term itself was coined at Hannover Messe 2011. The fourth industrial revolution was significantly shaped by physical and digital trends. Autonomous motor vehicles (not only cars, but also trucks, drones, aircraft or ships), advanced robotics, (widely used from agriculture to health care) 3D printing, (suitable for medical implants and even wind turbines), and new materials such as graphene.

The increasing networking of people, objects and machines with the Internet is leading to the emergence of new business models. Sensors and other devices are used to connect objects of the material, physical world with virtual networks. The basis for digital production lies in intelligent (smart) systems, which refers to a combination of equally tangible or intangible goods with digital systems. These in turn are networked and able to communicate intelligently with each other, which ultimately results in added value for the user. Here, the goods sometimes expand their original range of services many times over. There are also three terminological specifications: Smart Factory, Smart Products and Smart Services

One can view with a sense of amazement awe, and respect, the remarkable achievements and breakthrough of modern management and the entrepreneurs, over the past 50 to 70 years, in making, a better world for mankind, through innovations in a diverse range of disciplines, which practically cover every aspect related to the successful survival of mankind in this planet and even beyond.

I recollect a poem of HW Longfellow, the US poet, which I happen to cherish in my early school days about 60 years ago, depicting the great feats of remarkable men.

“The heights by great men reached and kept

 Were not attained by sudden flight,

But they, while their companions slept,

 Were toiling upward in the night.”

While revering those pioneers and inventors for their breakthroughs, we cannot consider lightly the crucial importance of human potential in managing the corporate strategies as well as the day to day operations. We are tempted to consider labour and manpower as a resource, when business is thriving and as a reducible or expendable cost, at times of peril. This fact was amply demonstrated during the crisis months of the COVID 19 pandemic. Ironically it was the same crisis, that brought home the reality of the vital importance of the “human touch.”

 During the late nineties, John Carlzon wrote book titled “Moments of Truth,” when he was the CEO of Scandinavian Airline Systems (SAS). It was about his experiences in helping the company to reorient itself to become customer driven. In his own words, a company that its only true assets are satisfied customers, all of whom expect to be treated as individuals, and who won’t select them as their airline unless they just dis that.

I feel that this concept with have greater implications in modern day management if we consider it in its wider scope, instead of restricting it to the organization and customer interaction and consider the humanistic interaction of personnel within an organization more holistically. To give a few practically demonstrable situations:

1. While the ISO 9001:2015 Quality Management Standard, emphases by Clause 4.2, about considering the expectations of interested parties, very few companies go beyond considering the job security, career prospects and safe working conditions.
2. When applying the tools such as the Fish Bone Diagram, 5 Why? Root Cause Analysis, FEMA, Fault Tree Analysis, to name few, how many of us consider that all faults or non-conformities can be ultimately traced back to the first of the traditional 4M, namely Man.
3.  At time that we are overly dependent on on-line bank transactions, we seldom get an opportunity to go to our bank, and have a friendly chat with the cashier at the counter.
4. We are so much used to downloading an e-book and studying the contents that most have lost the common touch with printed copies, which is a way of interaction with the author.

In its race for accumulating wealth as a floodgate to prosperity, health and contentment, the World has embarked on a vicious cycle, driven by extreme greed and hatred (aversion), two strengths that nature has endowed humans, purely for adapting to survive in its hostile environment in the path of its evolution and not for exploitation, in its quest for supremacy.

The recent experiences have amply demonstrated that myth of the developed, developing, and the under developed countries is fallible.

It was Mahatma Gandhi who remarked in his Autobiography “My Experiments with Truth” that I have nothing new to teach the world. Truth and Non-violence are as old as the hills. All I have done is to try experiments in both on as vast a scale as I could.

• PP Perera is a Colombo-based tyre/rubber industry veteran and management consultant

Bridgestone Americas announced the launch of Firestone Direct mobile vehicle service for car owners and fleet operators. Firestone Direct brings Bridgestone’s automotive services directly to vehicle owners’ homes or workplaces to offer maximum convenience with safe, contact-free service.

This service uses specially equipped vans operated by certified technicians to perform a wide range of maintenance services, including fluid and filter changes, tire repair and replacement, battery check and replacement, and more. 

Through 2021, Firestone Direct will continue to grow into additional markets across the southeastern U.S., with plans to expand nationwide by 2023. The new service launched first in Nashville and Atlanta and expanded into Orlando and Tampa in March.

Angie Oleson, director of Firestone Direct, said, “Customers are increasingly turning to online shopping and at-home services for convenience and safety, and Firestone Direct is at the forefront of this movement for at-home car care. By bringing trusted vehicle care featuring the latest automotive technologies directly to the customer, Firestone Direct can leverage the expertise of our trained technicians with the ease of online booking and at-home service for maximum convenience.” (TT)

The global electric vehicle (EV) market has taken a tremendous leap forward, with new registrations reaching record market shares in nearly all countries. For the tyre development landscape, the accelerating growth of the EV market means a pervasive transformation.

Boosting circular economy

At Black Donuts, the impact of the EV trend can be seen everywhere, from the tyre designers’ desks to the new practices of tyre testing. Beyond meeting new demands of the EV sector, the procedures and practices are tuned to serve the company’s strategic goal: to spearhead the industry’s shift towards a circular economy.

Black Donuts launched the first EV tyre development projects with its tyre manufacturer customers in 2018. The internal research on EV tyres was initiated even before, at the time of the first EVs entering the market. “The first research project addressed the primary technological challenges: rolling resistance and noise,” says lkka Lehtoranta, Head of Tire and Material Development at Black Donuts.

In tyre design, it is essential to focus on specific aspects to ensure optimal performance for electric cars. Compared to combustion cars, tyres for Evs must carry a heavier load withstand high instant torque – and be efficient and quiet. 

Lately, the focus on tyre technology has shifted towards more comprehensive sustainability. Bio-based materials and compounds are opening new possibilities, and the rapid growth of the EV market accelerates the pace of development. ”The EV trend has highlighted the sustainability of tyres. The demand for bio-based materials and tyre recyclability has significantly increased,” says Jarkko Mällinen, Technology Development Manager of Black Donuts.

In cooperation with its partners, Black Donuts is investigating new possibilities to replace fossil-fuel-based raw materials with bio-based or renewable materials in all products, including studded tyres. The company is currently testing the use of bio-based plastics in stud bodies.

Also, end-of-life tyres are a hot topic in the industry, and Black Donuts is researching how the waste tyres can be recirculated and recycled back into the process. Even the tyre development process is undergoing a renaissance. New design tools for faster tyre development are being introduced, emphasising the key features of sustainable, future proof tyres.

Comments (0)

ADD COMMENT

European PCLT (passenger car and light truck) tyre manufacturing capacity has risen over the past decade to meet increased demand, but there has been a major shift from plants in Western Europe, towards Central Europe and Russia. The move eastwards reflects substantial differences in operating costs between the two regions, specifically in terms of labour costs. Hourly labour rates in Central and Eastern Europe can typically be half to one quarter of those in the highest cost Western European countries. In particular this significant differential has resulted in the transfer of production of lower priced non-premium tyres to larger plants in Central and Eastern Europe. Numerous PCLT plant closures and downsizings in Western Europe have either been announced or enacted during the past 18 months.

In 2019 Cooper Tires ended PCLT tyre production at its small plant in the UK, and Michelin recently closed the PCLT tyre plant in Dundee that manufactured tier-1 brand tyres in lower rim-diameters (≤16”), a shrinking segment of the European market. These closures leave just the two PCLT tyre facilities operating in the country: the Pirelli plants that focus on low volume but high-margin premium tyres.

In Germany, Michelin has announced plans to close its Bamburg plant that also focused on lower-rim -diameter tyres, whilst Goodyear is restructuring operations at its PCLT tyre facilities located in Fulda and Hanau. Total capacity there will fall, but there will be an increase in production of premium tyres.

Pirelli has recently ceased production of car tyres at its Bollate plant in Italy, its only facility in Western or Central Europe that was manufacturing non-premium car tyres. Apollo Tyres plans to downsize PCLT capacity at its plant in the high-cost Netherlands, focusing the facility on high value tyres with short production runs. Management had stated that the company lost money on 70% of the PCLT tyres that it sold from the facility.

Despite these closures in Western Europe, expansion to the east is expected to result in the net addition of 30 million units of PCLT tyre capacity across Europe* by 2026. New plants that have been recently opened, or are currently under construction, are located in either central and eastern Europe or Russia. In 2017, Apollo Tyres opened a greenfield plant in Hungary, with first-phase capacity increasing to 5.5 million PCLT tyres and almost 0.7 million TBR tyres. Supply from the facility has substituted imports from India and now permits the planned downsizing and specialisation of production in the Netherlands.

In 2018, Hankook announced plans to add production of TBR tyres at its plant in Hungary, however this expansion was put on hold in late 2019. In phases, the company has already expanded PCLT tyre capacity until it is now one of the largest such facilities in the world. Meanwhile, Nexen has begun the ramp-up of capacity at its new plant in the Czech Republic; this will have added substantially to the country’s capacity by 2023.

In addition to further investments across Central and Eastern Europe by Continental Tire, Bridgestone and Pirelli, an expansion of premium tyre capacity in Slovenia has also been announced by Goodyear.

In mid-2019 Toyo Tire announced its intention to build a new tyre plant in Serbia, consolidating the country’s position as the leading location for new PCLT tyre manufacturing capacity in Europe. This follows Linglong’s decision to build its new European plant in the country and Cooper Tire’s plan to double the size of its facility. Based on analysis by Astutus Research of all announced capacity actions (plant opening and expansion net of closures and downsizing), Serbia will account for over 40% of planned capacity additions between 2019 and 2026.

Toyo expects to invest €390 million in its new facility that will have a capacity of 5 million units. It intends to start production in early 2022 and reach full capacity the following summer. Linglong’s facility will have a capacity of 12 million PCLT tyres, alongside truck and radial agricultural tyres, built in three phases and representing a total investment of over €800 million.

Serbia as new hub

Although there is demand for both replacement and original equipment PCLT tyres in Serbia, the domestic market is amongst the smallest in Europe and production will be export focused. The country has already emerged as a key source of budget tyres to the European Union and to Russia, predominantly from Tigar Tyre, Michelin’s low-cost tyre subsidiary, that has significantly increased capacity and production in the past decade.

Geographically, Serbia is well located to supply the major markets of the EU and Russia, and benefits from free trade agreements with both. Labour costs in the country are significantly lower than in the Czech Republic or Hungary, and labour availability is good, with a higher rate of unemployment.

At present Toyo imports tyres to Europe from its facilities in Japan and Malaysia; Linglong utilises its PCLT tyre plants in China and Thailand. Both companies aim to develop their presence in Europe, and local production should help them in this quest, particularly in the original equipment segment where the significantly shorter lead times will improve the competitiveness of their offer. Similarly, the opportunity to increase their share of the OE business was one of the motivations for Nexen and Apollo to replace imports to open a plant in the region.

Whilst the influence of the Covid-19 virus may slow the pace of some planned investment in central and eastern Europe, it has already accelerated the pace of closures in the west. Furthermore, we expect that it will result in further plant closures there, as the decline in European tyre demand dramatically reduces plant utilisation rates.

*Europe refers to Western, Central and Eastern Europe, including Russia and CIS, but excludes Turkey which we include in the Middle East & Africa region.

For capacity data: ‘Western Europe’ includes plants in Germany, France, Spain, Italy, the UK, Portugal, the Netherlands, Finland and Luxembourg. ‘Central Europe’ refers to Poland, Romania, Hungary, Czech Republic, Serbia, Slovakia and Slovenia. ‘Russia and CIS’ refers to Russia, Ukraine, Belarus and Uzbekistan.

• Simon Hodson is Research Director at Astutus Research shodson@astutusresearch.com

The WHO has said that the outbreak is now officially a Pandemic. People/ companies/ organisations are still coming to grips on how to address the situation. Government heads of various countries are trying to curb the situation by restricting entries of people who are affected by countries that are affected the most. Thus, airlines would have only diplomats and other certain levels of people allowed to fly.  Many airlines have suspended a good number of their flights.  Many companies will be looking to take a hair cut on what they take back with them, just to see that business can be sustained during the trying situations. 

The virus has led various markets to crash, courier services have been curtailed in certain countries. All types of cancellations, be it sport, expositions or business, have affected the business world over. The transaction value in the losses may be difficult to gauge currently, however, it could be in the millions. Contracts would have to be reworked, and companies may have to come with new strategies. 

However, in every situation, there would be also a business opportunity, if you work your strategy right. The sale of masks, gloves, hand sanitisers, medical devices would be able to generate good business. Though it is seen that the outbreak is from China, you also got to give to them as to how they are trying to contain the situation by building hospital/s within 10 days. In other countries, this would easily have taken a much longer time period. 

It is a given that the business scenario is not going to be the best for most of the companies; Therefore, companies may have to think and reevaluate the way they are currently running their company. Companies will look to get leaner in every possible way. Cut down on unwanted expenses. Many companies have started asking their employees to work from home. Some may look to have lesser number of people and look to automate some of the work, especially in the factories.  Commercial properties being an expensive asset to maintain, some companies may look to perhaps go on rented co working spaces. Use less of one time use items like plastic and use more renewable/ reusable substitutes. Use of more environment friendly methods going forward will be the mantra. 

This hit on our social system in a way will make us pause, think and have better suggestions as to how to look after ourselves and our environment at large.