A new chapter for VMI

A new chapter for VMI

In the past 20 years, VMI of the Netherlands has established itself as the world leader in high quality, automated tyre building machines. Now it is starting a new phase of its development, and that includes a stronger focus on the Indian market than ever.
To explore future plans in greater depth, we talked to the new Chief Commercial Officer (CCO), Mike Norman, and some of his senior colleagues. Together, they have given us a detailed picture of a company that is definitely not resting on its laurels, but is pursuing ambitious plans for the future.
Mike Norman is well known across Asian markets. He has spent a decade as Sales Director for Asia at VMI, and has overseen the remarkable growth of the Chinese market, with further growth in Korea, Japan and other Asian countries, as well. But what lies behind the Board Room changes?
“Our CEO, Harm Voortman,” he tells us, “has recently been appointed to the Executive Board of TKH, the major industrial group that is the ultimate owner of VMI. Now responsible for integrated activities across a range of companies, he has decided to hand-over his Commercial role within VMI to ensure the strong and dedicated focus this critically important task requires.”
CCO certainly is a broad and significant job. It covers not just sales and marketing, but also project management, service and delivery, for the tyre and non-tyre businesses of VMI. Isn’t this an unusual combination of capabilities?
Mike Norman agrees with that assessment. “It’s rare to combine all aspects of business development with projects and delivery,” he says, “but our decision to bring these disciplines together is deliberate. It ensures that the same executive is accountable not simply for selling products but also for long-term customer relationships.”
VMI appoints a dedicated Customer Services Advisor to work with customers when machines are accepted. These advisors are responsible for service support, working as part of an integrated team with the Project Managers, who work closely with customers to address their long-term needs.
Close team work between sales, service and strategic development is an integral part of the VMI go to market approach. The leadership team at VMI believes that integration across these disciplines is essential for long-term success, and other developments within VMI management confirm this impression.

Stronger focus on Asia

The Asian marketplace, and especially the Chinese market, has been a key part of VMI’s growth strategy over the past 20 years and more. The recent appointment of Chen Xing Chunjing as President of VMI Yantai confirms that both China and the wider Asian market will remain extremely important to VMI. As Yantai directly supports activities within India, its higher profile is significant for VMI’s Indian operations.
A true business leader. Chen Xing has spent almost his entyre working life within often very large global companies, normally with US ownership, including United Technologies, Bucyrus (now part of Caterpillar) and John Deere, the world’s largest agricultural products corporation. Over the past 30 years, Chen Xing has managed production, global sourcing, sales and marketing, procurement and all of these roles together as country General Manager.
VMI’s Chinese operation, based at Yantai in Shandong Province, is on a slightly smaller scale than any of these industrial giants, but Chen is excited by the new challenge offered by VMI. “VMI is the acknowledged world leader in its field,” he says, “with an extraordinary ability to design, build and deliver the products that customers really want.”
Chen was drawn to VMI by three key differentiators: outstanding engineering capability, proven by the ability to customise products to meet precise user needs; a creative, positive culture, which keeps the Chinese operation extremely competitive; and a relentless focus on R&D, fostering confidence in future success. “I have always been struck by the great respect for VMI in the market,” Chen Xing says. “Growth potential is outstanding, even in turbulent times.”
Chen has set himself a number of priority goals for the next two to three years.
Three key priorities. The first is to accelerate and fine-tune production and delivery to ensure that the engineering teams continue to match continued growth in sales. The second is bring new levels of agility to every aspect of operations, using Lean techniques and advanced analytics to drive operational efficiency.
The third, perhaps most significant, is to continue Yantai’s strategic development to give it a truly global business dimension, with India as a special area of focus. As more and more Chinese companies expand operations to neighbouring Asian countries, and then to the world at large, including Europe and North America, VMI will go with them as their trusted partner, with Yantai playing a lead role.
Global ambitions. Today, the Yantai business operates as an integrated part of the wider VMI, and this level of integration will become stronger in the future, as centres of excellence are created, not just in China but right around the world.
“This job is not just about being the Chinese arm of a global business,” Chen Xing confirms. “The most exciting challenge, and area of greatest potential is to ensure Yantai continues to evolve as a key part of a truly global company.”

New services, global reach

The ambitious plans for VMI in China reflect a growing emphasis on extending the business, both in terms of offerings and in global activities. As Mike Norman tells us:“We decided to develop the services business considerably in the past three years. We appointed a senior Vice President for services and have expanded rapidly.”
Focus on services. The leader for Services in VMI is Riaan Diener, who had already built a strong reputation for driving higher levels of customer loyalty and for creating entyrely new service lines at his previous company. Today, services form an essential aspect of the VMI offer, and reflect the growing importance of data, collaborative working and long-term partnering within the Industry 4.0 concept.
“Services play an essential part in helping customers gain maximum benefit from our technology,” says Riaan Diener. “That helps customers to become more successful, gives them better return on investment from purchasing our equipment, and enables us to help them move ahead as the market develops.”
Stronger support for stronger partnerships. Today, VMI Services cover a growing range of options, from training operators and other personnel on customer sites, to retrofitting vision and control technologies, ensuring that customers always have the latest versions of VMI equipment in place and to make use of remote support and applied data analytics.
“We are more proactive than ever in helping customers get the best out of our machines,” says Riaan Diener, “but the emerging world of big data and real-time partnering online has the potential to deliver game-changing advantages to customers.”
VMI’s MAXX technology remains the most important single element within the business, but the growing emphasis on partnership means that success can be measured more in real-world outcomes (tyre quality, productivity, numbers successfully built) rather than on technical specifications.
Global footprint. Changes in portfolio are also being matched by continuing growth in the company’s physical presence internationally. By early 2017, VMI was present in the Netherlands, Germany, China, Malaysia, Russia, the USA and Brazil. Since then the production plant in Leszno, Poland, has opened, significantly building advanced components for VMI’s own machines, while also enhancing collaboration with other TKH companies. VMI’s Brazilian and German businesses have recently moved to larger premises, required to keep up with continued growth.
In addition, VMI has almost doubled the number of engineers based permanently in India, ready to service customers on their own sites across the country, while the new service centre in Chonburi, Thailand, provides a fully-equipped regional hub for overhauls, service support and upgrades. In particular, this regional centre of excellence delivers an essential service in fast, high quality build, upgrade and repairs to tyre building drums, making VMI more responsive to regional customer needs.
Chonburi was created in response to rapid growth in the Thai market, but has the capability to service Indian customers, as well, supporting VMI’s permanent presence in India.

Future vision

VMI’s management team believes that the next few years will be extremely important for the development of the company. “The past decade has been all about MAXX,” says Mike Norman. “We have developed an industry-leading technology for tyre building, and we continue to develop and upgrade it. But the market globally is changing fast, and we have been working intensely to ensure that we stay competitive in the face of both technology and market-driven change.”
So what are the new developments that will shape the market over the next decade?
Changing market demands. The drive to reduce weight, both for environmental and safety reasons is leading to use of new materials in tyre building. Machines now have to deal with materials that have different characteristics, compared with those they were originally designed to handle. Material input to automated machines will be thinner and have higher tensile strength to compensate for loss in weight.
VMI responded to this trend a few years back by designing a breaker cutter machine, known as EDGIQ, better suited to handling lighter, tougher materials, using a circular blade in place of the traditional “guillotine” approach. Now redesigned to include advanced vision technology and more sensitive, flexible controls, EDGIQ is based on methods that break from the past and also moves us one step closer to improved integration within the tyre building factory.
Greater integration. As Mike Norman comments: “most factories contain islands of automation, in which highly efficient processes are mixed with other process stages that still involve a lot of human intervention, where operators still have to do things by hand. That slows down the process, leads to inefficiencies and also allows errors to creep in.”
VMI’s ambition has always been to foster enhanced integration, and step by step we can see this vision starting to become reality. EDGIQ’s rotary cutting system and controls based on advanced vision systems are now being combined with the calendering process within an experimental single-stage breaker cutter, now in test with a view to market launch in the next 18 months. This will permit compound and wire to be input at one end, with completed breaker rolls as output. Human intervention from one end of the process to the other will be minimal.
Meeting new customer priorities. Other systems now in development focus on the growing need for customers to build larger varieties of tyre in smaller batches, without losing any of the operational efficiency that MAXX provides.
“So far,” says Mike Norman, “we have focused on quality, quite rightly. We have enabled companies at every level of their development to build tyres of the highest quality, very efficiently and with full audit information to prove it. Yet inevitably, this approach requires comparatively large batches, leading to storage and logistics issues.”
As the market moves to smaller batches, and the vision of small scale, “local” plants to supply specific market segments becomes reality, new methods will be needed, with more integrated tyre building systems now in preparation for future launch. Quite separate from this new concept, we are likely to see further advances in retrofitting existing products with new capability, including a flexible, multi-size drum, enabling multiple tyre specifications to be built faster and more flexibly on a MAXX tyre building machine.
The tyre market goes through major change cycles every decade or two: the next period of rapid change is now in view.

The Indian market

VMI also expects the next few years to be very significant for India, which has been an important business location for the company throughout the past thirty years. “For us, India is becoming one of the most strategically important of all national markets,” comments Mike Norman, citing a range of factors that are coming together to drive growth.
New opportunities for the Indian market. Current difficulties in importing directly from Chinese factories makes it more attractive both for domestic Indian manufacturers to increase local production and for external players to create Indian subsidiaries and plants. At the same time, the demand for higher quality products is rising fast. Automated radial truck tyre manufacturing is becoming more attractive as truck operators understand that total cost of ownership is actually reduced by moving from cross-ply to radial products, especially when retreads are used.
VMI has worked closely with more than one Indian manufacturer as they expand their operations abroad: to Europe and the US. That trend is set to continue and potentially accelerate as Indian companies increasingly seek to become strong international players.
India-focused solutions. Yet the Indian market remains in many ways unique. In many ways, VMI’s position within the Indian market is defined by its unique Retrax machine, which has brought safe, low environmental impact, integrated retread technology to a market where the demand for quality retreads continues to grow.
“We’re proud of the Retrax,” says Mike Norman, “because it demonstrates what we are all about as a company. It delivers exactly what the market wants and needs, and it is continuously improved, using our most advanced technology, to deliver better performance.”
The core technology of tyreRetrax is based on application of hot gum to a prepared buffed tyre, with the new tread applied automatically on top of the gum. This approach is not only simpler than alternatives, it is also much more efficient. Hot gum automatically fills in all but the largest holes in the tyre body, avoiding air inclusions and making a better seal.
In addition, MAXX-based vision systems are increasingly used to ensure that the gum is evenly spread and the new tread is applied with precision and with minimal operator intervention. In this way, the updated and improved Retrax machine continues to do what it has always done: reduce environmental impact, increase operational efficiency, ensure higher quality products and safeguard the people working on the process.

Mike Norman’s last word on this?

“Retreads are very important in the Indian market,” he says, “and will become even more important as the move to radial tyres continues. We set ourselves to use the technologies and insights developed in other parts of our business to make the retread process as fast, efficient and safe as it can possibly be.”
VMI’s business is to supply its customers with products that meet their exact needs today, while helping them to take the next steps towards their future. For India, that could be an exciting journey.

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