Opportunity in crisis

“In our experience,” Norman said, “Companies respond to a crisis in one of two ways. They either stop everything and just try to survive. Or they continue to invest and hope to come out of the crisis in a relatively better position than their competitors. We have taken the second approach.”

VMI did the same thing over a decade ago, after the 2008 – 2009 financial crash. During this period, VMI invested heavily in additional R&D and that led to the fast-track development of the MAXX tyre building machine. The recession, in other words, prepared the way for VMI’s greatest commercial success. During the past few months, the R&D team at VMI has again been working hard on new concepts, improvements to existing products and capability enhancements, moving into such comparatively new areas as software and data analytics.

All manufacturing companies depend on their Intellectual Property (IP) to differentiate themselves in the market, and VMI is no exception. VMI’s patented technologies are at work across the Asia Pacific region: in China, Japan, Korea, India, Thailand, Taiwan and Malaysia. VMI works hard to safeguard its IP in all the countries where it operates. India is a key market for VMI because the independent judiciary there has an excellent track record in protecting the innovations of overseas companies entering the Indian market.
 

“Returning to ‘normal’,” comments Mike Norman, “may not be a realistic option, because our market in the next few years is likely to be very different from the recent past. You will not move from survival to growth by doing the same old things. The companies that stay successful will need to think and act differently.”

Recovery roadmap

So, what exactly will the future look like? And how can businesses in the tyre industry build a roadmap out of the crisis and towards a more confident, successful future? The Covid-19 crisis, after all, has just accelerated trends in the market that were already evident will not go away when the virus is contained.

The industry was in a state of rapid change long before the virus struck. Demand was dropping, globalisation had stalled, the industry was facing much stricter environmental regulations, while electric vehicle growth was rising fast, with a need for more tyre variants in smaller production runs… It is not possible to be certain of what other long-term changes might happen as a result of the Covid-19 crisis, but it’s pretty clear there will be many of them. This means that being more agile is not a “nice to have”: it’s a basic necessity.
 

“No-one is likely to recover entirely on their own,” as Mike Norman puts it. “We need to look for ways we can work together, support each other and rebuild as partners.” How to do that? Norman suggests three ways to accelerate recovery and build a stronger, more successful future, no matter how uncertain the market seems. First, work smarter and be more agile. Second, optimise everything. Third, focus on Total Cost of Ownership (TCO).

Work Smarter, be More Agile

No-one accurately predicted the economic impact of the Covid-19 crisis (even though potential pandemics were seen as a priority risk by most governments). The moral of this? We need to be ready for anything and everything. There will probably be a major crisis of some kind every decade and the industry must respond better to the next one. The best advice is to make your whole business more agile and resilient: easy to say but a lot harder to do!

Dealing with Change

“You don’t make a business agile overnight,” says Mike Norman, “but you can start to gain the benefits from carefully planned change pretty soon. And the benefits grow as you make more progress in the right direction.” Becoming more flexible and ready for the unexpected depends on the strategic choices you make. In particular, two factors will define how ready for the future your business becomes: Platforms and Data.

From Machines to Platforms

When VMI launched the MAXX tyre building machine over ten years ago, it was the first step towards building production platforms, rather than standalone machines. Platforms are the key to future-proofing a business, because they can stay up to date, no matter how fast and unpredictable market and technology changes may be. Every major production platform is built from components that are constantly being worked on, improved, upgraded, replaced and added to with new capabilities. By investing in a platform, your equipment can always stay at best practice level, so your investment need never become obsolete.

Updating the MAXX

With VMI’s MAXX machine, for example, in the past 10 years 7 major upgrades have been taken to market and many customers have simply replaced (for example) the original vision technology with the hugely improved PIXXEL system.

PIXXEL includes a greatly improved camera, now built in-house to meet a very precise specification and higher protection against dust and even water. As an integrated system designed from the ground up, PIXXEL also removes the need for a separate PC and transforms performance in such key areas as component guidance, breaker and tread splice monitoring and carcass drum monitoring. It enables more proactive intervention, can enhance process efficiency, and contributes to better use of machine data and management insights through analytics.
 

This is one example of how the platform approach, enabled by intelligent retrofitting, helps make investments go further, while improving agility. No company can afford to rip out and replace its existing investments, just because a hot new technology is being introduced. It’s about evolution: always being competitive with, or preferably, ahead of the market.

Making Better Use of Data

Production machines of every kind generate vast amounts of data, but our industry has not traditionally been very inventive about using this for competitive advantage. If you are going to build a more agile business, then data is going to make a very important difference. Data in the future will enable:

• Predictive and proactive maintenance, reducing unplanned downtime and leading to more efficient management of production equipment.
• Analytics to spot emerging trends, from faults to potential process optimisation opportunities.
• Managing groups of machines from a central control area, reducing human touch points and speeding production.

Data is not a magic ingredient, of course, and neither is it new. The big change here is the ability to apply analytical tools and create insights for action in real, or near real time. This means the tools to enable greater flexibility are available now. We just need to use them more effectively than before.

Optimise everything

Change on a large scale can cause anxiety and, let’s face it, by now everyone has suffered enough disruption to last them for a long time. As Mike Norman puts it: “We don’t want to suggest anything that makes life harder at a difficult time, so the key to moving forward, we think, is step by step, keeping risk as low as possible.”

Process optimisation should be carried out on an incremental basis. As you work to analyse and improve all aspects of your production processes, you begin to find that complete stages can be cut out, time will be saved, resources used (energy, materials, people…) will be reduced and every saving goes straight to the bottom line. These are the tactical changes that drive immediate improvements, while buying time for longer-term, strategic changes.
 

Optimise Core Processes

Nobody tolerates inefficiency or poor-quality processes willingly, but sometimes it is easier just to let things stay as they are to avoid difficult decisions and potential disruption. Now is the perfect time to rethink processes and optimise them.

Places to look include materials storage and handling, transportation through the plant, improved testing to identify faults early in the process… This is all about organising the people and assets you already have, to make them more efficient. VMI’s experience is that you can remove over 10% of costs from production processes before you need to do anything disruptive. That’s additional profit every company needs to bank.

Optimise Service Options

Service within the tyre industry has traditionally been about break fix, supply of spares and providing engineers on site fast. These remain important and necessary, but service can and should mean a whole lot more, especially now we are using data to identify emerging trends and manage production equipment more effectively.

Rich data flows and new analytical tools enable you (and your service provider) to identify issues before they become faults and redefine policies to make routine maintenance more agile, responsive and proactive. This helps ensure that assets run as efficiently as possible, with minimal downtime.

“We at VMI,” Mike Norman said, “are becoming more ambitious about how we define Service. We think it is about helping customers be more successful in a strategic sense, often by fine-tuning their assets and processes to be more efficient.”

This goes beyond maintenance. Data analysis, backed by responsive service, helps tyre building companies respond to market needs more flexibly, constantly making their production environment more flexible. It’s not just about the machines, therefore, but about how you optimise technology across their entire life cycle for better response to changing patterns of demand.

Optimise People Management

In the end, all businesses depend on the quality of their people, and we believe this difficult period gives manufacturers a much-needed opportunity to look at who they employ, the skills they possess, the training they receive and how they interact with production equipment. Here, as well, expert service support can prove valuable.

“We possess a huge resource in the form of expertise, domain knowledge and insight,” Mike Norman comments. “This is at the disposal of our customers and we encourage them to make more use of what we can deliver in human terms.” The aim is to transfer skills and knowledge in order to help customers improve the quality of their own human expertise.

The future is likely to be more about extremely flexible, extremely smart systems, delivering precisely to the ever-changing needs of the market. Maximising the potential of these systems is going to need smarter people, with improved training and access to specialised expertise.

“We respect people too much to treat them without due care and attention. We assume our customers feel the same way.”

Employees have many of the right answers to tomorrow’s problems in their own heads. We need to maximise this human capital.

Solving the cost equation

Every company in our industry has taken a financial hit. Sales have been stopped in their tracks in many cases, so cashflow projections are no longer relevant and income streams have dried up. At times like this, nobody makes friends by suggesting that the right option for investment could be the one with the highest capital cost.

Why is TCO so important? It’s about getting into production and turning investment into profit as fast as possible. VMI’s engineering approach is designed to ensure that each machine works out of the box. It does not require long months of fine tuning and commissioning work on customer sites to reach peak efficiency. Installation leads to delivery right away- that’s the idea, ensuring that your investment leads to profit as fast as possible.
 

Yet, for businesses that believe in their own long-term future, all the investment decisions you make in this, the worst of times, will be critical in defining how well you compete once the crisis is over. Mike Norman’s view: “The three points we think you should always bear in mind are Total Cost of Ownership (TCO), Quality and Value.” Here is why.

Total Cost of Ownership

Production assets, such as VMI’s MAXX machines, are designed to stay fully operational for around 20 years. By the time owners get to year 5, the key to profit will be productivity and efficiency day by day, month by month, year by year.

The machine is designed to work efficiently, with planned maintenance and regular upgrades as new options appear. “Our customers can make promises to their own customers with confidence,” said Mike Norman. “They know they will be able to deliver as planned, on time, meeting contracts every time.” You cannot operate successfully with demanding end users unless you have this assurance.

If you buy a machine that does not work at once, you need to consider the major hidden costs due to being slow into production once it is delivered. These should be added to the true investment cost. So should downtime, scrappage, extra power usage, extra employee time through the entire product lifecycle… It mounts up. If you believe your company has a long-term future, then TCO is the only financial measurement that counts.

Quality as the Key

Tomorrow’s market will almost certainly require shorter production runs of high-quality products, with many more variations. We won’t be able to afford the scrappage levels that have been normal in the past. High product standards must go hand in hand with higher levels of environmental efficiency, lower energy usage, near elimination of waste and new levels of production flexibility. Assured quality will be the key to staying competitive in this new reality.

Moving up the Value Chain

In an uncertain market, ambitious companies need to aim for higher value products and prove they deserve to charge premium prices to meet their profit targets.

VMI machines can create auditable data that will show, not only what the product is, when it was produced and where, but also full operational conditions at the time. This can go into such fine detail as the materials used, cuts and splices made, length of storage, when and how the compounds were mixed: the entire life cycle from design to delivery.

Tyres have their own pedigrees, that is already taken for granted, but now it is possible to review all relevant data in much greater depth than before. Those companies able to prove their own quality standards will move up the value chain and maximise their profits. Those that can’t, will not.

Facing the Future

Where does all of this leave us as we face the task of rebuilding economies, our industry and our businesses? Especially in countries that are strongly dependent on a globalised marketplace and are facing real concerns about the future of free trade?

South Asian companies will continue to find opportunities in the global market, but they may need to rethink their strategies to maximise these. There is a model in other industries for the changes that need to happen in our own. For example, India has developed from being an offshoring centre for low cost IT processing to becoming home to global leaders in quality and innovation. VMI expects to see tyre producers in Asian countries follow a similar path, from cost competition to quality leadership. We are ready to help in this process.
 

Mike Norman’s view is that companies need to build their own road to recovery, and keep their nerve as they move forward. “The market will come back,” he says, “but it will take time and there will be some rough patches ahead.” But there are plenty of actions that can be taken here and now to bring recovery closer and help secure the long-term future of dedicated and ambitious companies.

“Being more agile, more flexible in everything we do is a non-negotiable requirement,” he emphasises. “It’s not enough to talk about unpredictability, or expect the unexpected: you have to build the capabilities that lead to true agility.” The good news is that it is possible to take short-term action, without high cost and improve performance relatively fast.

“Flexible production platforms, more and more creative use of data and analytics, straight through production with minimal stops for materials handling, building to precise market needs; these are the big prizes that ambitious companies need to aim for.”

There is no “either-or” about this. By making small-scale, rapid improvements, companies make space for the larger changes that will transform their long-term prospects. Will it be easy? Probably not, but, as Mike Norman says: “We have to face up to the challenges of our own times, whether we like them or not. If we believe in the future of our companies, we will accept the challenge and be successful.”

 

Apollo Tyres Ltd has secured a one-season shirt-sleeve sponsorship agreement with AS Monaco, one of French football's most successful clubs, to increase awareness for its premium Vredestein brand.

This partnership will leverage Ligue 1's ranking as the fifth most watched football league in the world to raise awareness of Vredestein's award-winning products among a large audience in France and abroad. On November 22, AS Monaco's home league game against Brest will have the new sleeve branding for the first time. The Vredestein brand will be heavily promoted at Stade Louis-II for the 2024–2025 season, including on player sleeves and LED screens around the field. Exclusive social media initiatives will further help make the brand prominent, reaching a large and interested audience.

Yves Pouliquen, Vice President – Commercial, Europe, Apollo Tyres, said, “This partnership is an exciting opportunity to strengthen Vredestein’s presence in one of our key markets. AS Monaco’s rich history and commitment to excellence mirror our focus on performance and innovation. We look forward to building a successful relationship with the club and celebrating its achievements this season.”

Thibaut Chatelard, Marketing and Revenue Director, AS Monaco, said: “We are delighted to welcome Apollo Tyres and its Vredestein brand to the family of AS Monaco partners. This collaboration makes sense in view of the values we share, such as the constant pursuit of performance and excellence. There’s no doubt that this new support will be precious for the rest of our season, which promises to be thrilling.”

Nexen Tire, a leading global tyre manufacturer, has launched the Nexen N´Blue S tyre, adding to its range of summer tyres and providing drivers with advanced safety, energy efficiency and superior driving stability in wet and dry conditions.

Developed using highly dispersed silica and equipped with an optimised structural design, the Nexen N´Blue S tyre provides reduced road noise and improved driving stability. The tyre features an innovative tread compound, formulated with hydrophilic fillers and microstructure-controlled polymers, and provides lower rolling resistance and exceptional dry and wet grip. The tyre also excelled in test results by demonstrating an 11 percent improvement in wet braking distance compared to its predecessor.

Apart from providing excellent performance, the Nexen  N´Blue S also scores high on the sustainability index. The tyre provides an eco-friendly solution for environmentally conscious drivers by minimising fuel consumption and CO2 emissions. The Nexen N´Blue S summer tyre is available in 58 sizes, which makes it compatible with different types of vehicles.

Kumho Tire Vietnam Co., Ltd. is all set to expand its investment project in Binh Duong province of Vietnam, with the phase 3 of expansion commencing in early 2025. This was discussed at a recent meeting between Vo Van Minh, Deputy Secretary of the Provincial Party Committee and Chairman of the Provincial People's Committee (PPC), and Kim Hyun Ho, General Director of Kumho Tire Vietnam Co., Ltd.

The meeting was held on 13 November at the Administrative Centre of Binh Duong province, as per an official statement. Apart from the company’s investment till date and the planned investment for phase 3, the two also discussed about the challenges and obstacles regarding procedures and processes to have more land funds to expand the manufacturing plant, along with taking measures to tackle the obstacles. Kim Hyun Ho also conveyed to the PPC Chairman that Kumho Tire Vietnam Co., Ltd. belongs to South Korea's Kumho Tire Group and is currently ranked 10th in the car tyre manufacturing industry.

The company had invested in a tyre manufacturing plant in My Phuoc 3 Industrial Park in 2007 with a total initial investment of USD 308 million, which was supplemented by another USD 300 million in 2021. This extended the factory scale to six hectares and increased the production capacity to 12.5 million tyres annually. With the expansion in early 2025, the company will raise its total investment to USD 908 million and increase the factory's production capacity to 17 million tyres annually. The expanded capacity is expected to be operational by early 2026.

Yokohama-ATG, a leading manufacturer of all-terrain and off-the-road tyres, has expanded its Galaxy MFS 101 SDS range of forklift tyres with the launch of white, non-marking tyres.

The Galaxy MFS 101 SDS range consists of puncture-proof SDS tyres with extended wear limits designed for high-intensity working shifts and long durability. These are premium, solid rubber tyres developed for tough demands, a long service life and high driving comfort. The addition of white, non-marking tyres is specifically aimed at clean working environments.

Marked by a 3-stage construction process, the forklift tyres feature reduced heat build-up, effective shock absorption and minimised vibrations. The pattern design guarantees a smooth ride and good steerability thanks to its continuous centre lug and circumferential grooves. Furthermore, the flat walls and wide flat profile offer excellent stability when using a forklift for vertical stacking. The tyres are also equipped with anti-slip steel beads for improved rim fitment

In a case study on a CAT 2.5-tonne forklift that was used for handling heavy pallets on asphalt, the Galaxy MFS 101 SDS outshone the competitors with impressive performance. The tyre delivered an approximate 900 working hours before replacement against competitors’ 500 working hours.