Scania to drive customer profitability through sustainable transport solutions
Scania intends to play a leading role in the inevitable shift towards a sustainable transport system and its business model is evolving to meet that objective by identifying activities that drive value, removing costs that aren’t contributing to business goals and reinvesting in strategic growth initiatives that improve competitiveness.
“Sustainable transport is all about moving people and goods while contributing to economic and social development without jeopardising human health and safety or endangering the environment. For Scania it is evident that sustainability and profitability go together, here and now and increasingly so in the future,“ said Scania Group President and CEO, Henrik Henriksson.
“I think businesses that are not part of developing solutions to the sustainability challenges of our time will struggle to survive. For us the question is not whether a future of sustainable transport will come, but when. It is towards this future that we are working in close cooperation with our customers and customers’ customers.”
One of the most encouraging area for Scania, said Henriksson, has been Asia where he says the Scania business model – which focuses on total operating economy and vehicle uptime – is starting to resonate with customers.
Henriksson, who was in Malaysia recently, said Scania’s business model is about understanding and improving the revenue and cost aspects of its customers applications or industries.
To do that, Scania tailors solutions that eliminate waste and improve efficiencies in the entire transport flow based on its three pillar approach to sustainable transport – Energy Efficiency, Alternative Fuels and Electrification, Smart and Safe transport – which includes vehicles and services, optimised for its customers’ operations to improve fuel efficiency and maximise the vehicles’ time in operation.
Its sustainable transport solutions also include driver training and coaching, that are aimed at better fuel economy and reducing the impact on the environment, thus creating value for its customers and making their businesses resilient for the future.
Driving customer profitability through sustainable transport solutions and pursuing responsible business, stresses Henriksson, are complementary, long-term perspectives to continuing to be a profitable company.
That approach saw Scania’s net sales rising to a record high for its 2017 financial year – during which it intensified its efforts to drive the shift towards a sustainable transport system – with an increase of 15 percent compared to the previous year along with increases in operating income and revenue while vehicle orders surpassed the level of 100,000 for the first time as order bookings for trucks rose by 30 percent compared to the previous year.
“Our success is built on our ability to provide our customers with profitable and sustainable transport solutions that contribute to the success of their businesses. Scania’s business model, our principles, working methods and approach to sustainable transport will continue to be the platform for how we create value for our stakeholders.”
This includes initiatives in Malaysia where Scania has been the first to introduce an enhanced and industry-leading 3-year warranty with unlimited mileage together with 3-year Scania Assistance and 10-year Scania Fleet Management for the trucks sold for operators to get the best Total Operating Economy.
Demand for sustainable transport solutions is also increasing from the customers of Scania’s customers who are the buyers of transport services with urban authorities -already prompting a switch to transport that uses biogas, electric or other fossil-free energy sources.
“We work across boundaries with cities, operators and their customers too, taking the whole transport system into consideration in a systematic way. The world can’t wait for a ‘one size fits all’ solution; the conditions and issues vary so much from place to place that there is no silver bullet. We urge authorities and institutions to enable and simplify the use of them all. We have solutions here and now!”
“Our aim is that wherever in the world you go to buy a Scania solution, you should be offered an alternative to a fossil-fuel vehicle. We are committed to making sustainable solutions our standard offer and fossil-fuelled the alternative. We have decided to take the lead in the shift towards a sustainable future of transport and logistics and we stand by it.”
Henriksson noted that accelerating urbanisation is putting huge strain on cities worldwide such as Kuala Lumpur where traffic congestion, environmental challenges and safety issues are facts of life.
“The huge growth in cities is driving innovation in both logistics and public transport, as cities tackle congestion, pollution and road safety by turning to partnerships to provide new transport solutions.”
“The world urgently needs to break the correlation between increasing demand for transport, and increasing carbon emissions, noise, congestion and accidents. We are approaching a tipping point, where the convergence of new technology and business models will result in a state where sustainable transport solutions will take off and become the “new normal” and the current unsustainable solutions will be phased out.”
“By being at the leading edge of this change journey Scania is better positioned to help our customers maintain and improve their profitability in a fast changing world. At Scania, we believe that there is no single solution that will take us to a sustainable transport system. Rather a holistic approach is called for, considering the specific transport assignment and the maturity of the logistics and infrastructure in different parts of the world.”
The good news, he added, is that Scania’s customers do not have to wait to adapt their businesses to a sustainable transport system because the solutions are already available.
Scania offers a broad range of platforms and services now, to support our customers businesses today and tomorrow.
“No matter where our customers are on the journey to sustainable transport, regardless of which type of driving is involved or what the local conditions are, there is an alternative solution from Scania to order, here and now. We know that sustainability has to go hand-in-hand with profitability and the good news is that additional cost from some measures taken can be offset by others that reduce waste and increase efficiency.”
“For our customers today, environmental and social impacts are prompting their customers and consumers to demand more responsible business, adding to the constant pressures of just-in-time deliveries and tight profit margins. By continuing to offer relevant sustainable transport solutions, Scania can provide our customers with the right tools to meet their customers’ needs.”