Volgren aiming high


As Australia’s most prolific bus body builder, Volgren has high standards to maintain and continues to do so by successfully adapting to market changes.

Volgren aiming high
A lot of work went into the design of Volgren's Optimus bus.

 

As our cities’ populations continue to bulge, Australian bus body builders are working hard to keep up with unprecedented demand for vehicles that help us get from A to B.

Volgren CEO Peter Dale says the bus is essentially a tool. And, because the company was founded by a bus operator – the Grenda family – that began making bus bodies because it wanted a better product for its own business, the needs of bus operators have always been its focus.

The Grenda family sold a majority stake in its bus building arm, Volgren Australia, to Brazil’s Marcopolo in 2012, following the sale of Grenda Transit to Ventura Buslines.

Volgren has launched two new products – the city-oriented Optimus and the school charter-oriented Endura buses – over the last few years, and is constantly looking at developing new bodies.

Volgren unveiled both Optimus and Endura at the BusVic Maintenance Conference and Bus Expo back in 2013.

The Endura was the first collaboration between Marcopolo and Volgren to create something new, and involved engineers from Brazil working with Volgren’s Australian design team.

The bus builder’s flagship city bus, the Optimus, was redesigned following a three-year research and development project costing more than $3 million, and was developed in collaboration with Monash University.

"The Optimus bus is an example of the kind of innovation manufacturers can achieve when employees are taught to think laterally," Dale says. "We had to completely rethink our manufacturing process and design a bus that focused on the customer. We looked at what a new bus could be and what it should be."

Built out of an aluminium frame, the Optimus bus is lighter, stronger and safer than traditional steel-framed buses, according to the company.

Volgren is now responsible for close to two in every three route buses sold in Australia and builds roughly 10 bus bodies a week, Dale says.

 

What do you value?

What bus operators want from a bus body builder – value – hasn’t changed, according to Dale. However, the range of value now provided has increased with the number of new players in the market.

"What they want above all is value, and that isn’t the same thing as price," he says. "Most operators are interested in the whole-of-life cost, as opposed to just the initial cost of a new bus. That value starts at acquisition and goes right through to disposal.

"That includes the cost of repair if the operator has an accident and the body needs repairing. Any special request you might get from an operator always relates to how they can get more value for the money they are spending. The question becomes: how do operators determine value in 2016?"

To answer this question, Volgren set Monash University the challenge to investigate life cycle cost differences between their buses and others in the Australian market. 

"Looking at a bus operator’s bottom line, it’s not about price, it’s about the lowest cost of total ownership," Dale says. "Our strategy is about producing safe, high-quality buses with the lowest whole-of-life costs, reducing the need for constant bus repairs and improving regular maintenance."

"Our internal data showed us that our bus bodies had the lowest whole-of-life cost compared to others on the market, so we turned to Monash University to firstly develop a model to quantify life cycle costs, and produce a comparative bus body report," Dale explains.

The research found that Volgren-bodied buses have lower life cycle costs of 7.3 per cent than that of comparative bus bodies.

"The partnership with Monash is mutually beneficial because it makes their research more practical and relevant to our industry, and their research helps us to improve what we do. It’s these kinds of partnerships, between academics and business, that our industry needs if we really want to make progress and be as innovative as we can be."

 

Change is good

A long-term view of cost aside, advances made in bus building technology and the manufacturing process itself have impressed Dale over the last couple of years.

"What we have been doing in the last five years is significantly different to what we have been doing in the five years before that. We have totally transformed the business by adopting smarter and more efficient manufacturing techniques, which have helped halve the time it takes to build a bus,"

Volgren Australia has had to adapt in order to remain competitive, especially with the influx of Asian competitors that have entered the domestic market.

Faced with the prospect of a five-fold increase in bus imports into the country, Australia’s largest bus body manufacturer not only needed to become more productive to survive, they had to completely rethink the end product.

The manufacturer set the goal of halving the time to manufacture a bus body while challenging staff to improve the overall safety, quality and delivery of their buses.

"Five years ago, it took us 1000 hours to produce a bus body," Dale says. "We could see that without dramatic changes we were going to be squeezed out of the market.

"We set the target of building a bus body in 500 hours, which at the time was hard for employees to conceive. But training people at all levels of the business to question process efficiency and to look for opportunities to save time or costs meant we were able to achieve the goal in just four years."

A 20-day build is possible now, something Dale says was unthinkable five years ago.

"If what the operator has ordered is a current design, and the chassis is readily available, we can commence a build six weeks from order and complete it within 20 days.

"We identified years ago that we could cut down on time wasted simply by making sure our staff had immediate and easy access to the tools they need. Also there are some parts that can be painted early before the whole bus reaches the spray booth.

"So there were a number of simple things that we have now changed that were previously holding us up."

"We are 75 per cent owned by Marcopolo now, and we have gained a lot by sharing our collective knowledge of the industry and adopting systems that work well for them.

"Going back five years, we could see that being competitive in Australia was not going to be good enough.

"That’s when we started really restructuring our teams on the factory floor – that has allowed us to become a lot more efficient and also achieve even better quality."

The first thing that Volgren set out to improve was the safety of the working environment for its staff on the factory floor.

Once that was addressed, it looked to improve the quality of its bus bodies, followed by a concerted effort to reduce delivery times and the overall cost of production.

Volgren has a number of manufacturing operations around Australia, which gives it the advantage of being able to cater to demand when and where it occurs.

The bus body builder is Australia’s largest, manufacturing about 450 buses each year at three facilities in Victoria, Queensland and Western Australia.

The manufacturing plant and nearby distribution centre at Dandenong in Melbourne’s eastern suburbs alone has 280 staff, and the organisation currently employs about 430 staff nationally.

 

Different strokes

While double-decker bodies are emerging as a popular option for route buses in Sydney, Dale says they are not suitable for public transport in all Australian metropolitan areas, and the number of double-decker bodies it has produced this year has not increased dramatically.

"The take-up of double-deckers hasn’t been as strong in Victoria. In Brisbane, they can’t fit in the tunnels. If passengers need to get on and off often and at different places, you still need something with a large passenger capacity – then articulated buses are a better option."

Volgren is in the process of building a large number of articulated buses for route service in Japan.

Dale feels the fact that an Australian bus body builder is producing buses that are destined for the Japanese markets speaks volumes about its ability to be a globally competitive manufacturer.

"We are proud to be supplying buses into the Japanese market. The ones we are building now will be used in the city of Nara, and should be in service there by March next year."

 

Co-Bolt system

Volgren differentiates itself from other body builders by using a Co-Bolt system that allows for sections of the body to be unbolted, replaced and then bolted back into place – rather than welded. Bolting replacement sections of the body has been shown to be better than welding in retaining the integrity of the structure.

"We’re also able to adapt our bodies to a wide range of different powertrain technologies and this is going to be very important because we are quickly moving into Euro 6, hybrids, fuel cell and electric buses," Dale says.

"Our partnership with Marcopolo gives us an even higher design capability. We are also the only builder to offer a full range of bus bodies and, due to the Co-Bolt aluminium structure we use, they often end up being up to a tonne lighter, which reduces fuel costs for the operator. These buses don’t need a mid-life rebuild."

Aftersales service is a major focus for the organisation, underpinned by 10 mobile support units that operate nationwide and dedicated facilities to support its customers in each state.

"If a bus isn’t on the road, that’s a big problem for an operator, so we put strong emphasis on our national service network," Dale says.

 

A better tomorrow

According to Dale, the main driver of demand for new buses in Australia is state government public transport investment, rather than the more moderate and gradual growth in charter and school services.

"Eighty per cent of our business are city buses, so it really is state government investment that drives our industry. We are reliant on that and we have been pleased with the level of investment we’ve seen this year, especially in Victoria.

Dale is confident that demand for bus services will continue to grow, and that governments are starting to see the efficient movement of people as vital to Australia’s economy, especially as our cities are growing at such a rapid rate.

He says the future looks bright for Volgren, and, with the support of their majority owners Marcopolo, who are based in Brazil, they plan on boosting overseas exports of Australian-built bus bodies and bus kits into Asia. 

"Marcopolo is one of the largest bus body manufacturers in the world, producing more than 30,000 bus bodies annually. For Volgren, that means we have access to the latest technology and designs and advanced manufacturing systems.

"We’re very much in an exciting phase, developing joint projects with Marcopolo and having their engineers and key executives spend time in our manufacturing plants and vice versa, with our staff spending time in Brazil."

In addition to the domestic bus market, Volgren is also increasing exports to Asia, including articulated buses to Japan’s largest bus operator, the Nishitetsu Railway Company.

"We see enormous potential throughout Asia and, with the backing of Marcopolo, we’re in great position to get more involved in global markets and value chains," Dale says. 

"The interest we’ve had so far says a lot about the quality and compatibility of Volgren buses, and Australia’s reputation and competitiveness within the broader bus building industry."

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