Whether it is one of several models or their sole product, manufacturers of Type A and B buses are feeling similar economic after-effects
Since the start of the 2008 production year, the manufacture of Type A buses has dropped approximately 20 percent, and that’s not including a 17 percent decrease the year prior. Although part of an overall trend due to the economic recession, many small school bus manufacturers are looking to stay ahead of the curve with strategies that will help keep costs down and profits up.
Keeping Control on Costs
For many companies, being one part of a much bigger corporation is part of staying afloat in the industry. The financial and purchasing power of some large conglomerates can help reign in the production costs.
“As an affiliate of Navistar International, IC Bus is able to leverage large purchasing economies of scale, design capabilities from around the world, and a global manufacturing foot print to control costs,” said Keith Kladder, the company’s marketing manager.
According to IC Bus, its BE series school bus felt the same pinch related to rising commodity prices. Since January 2008, steel prices have jumped over 150 percent, while platinum, palladium, and copper all seeing similar, dramatic increases. “Rising commodity prices have impacted our price to our customers, as the continued increases have out paced our ability to absorb or offset the increases,” added Kladder.
To keep production as lean as possible, IC Bus has worked closely with its suppliers and is attempting to identify new potential suppliers who can offer products and services at a more competitive price.
“Additionally, we have looked at all aspects of our manufacturing process to streamline the operations to maximize our cost controls,” said Kladder.
Upgrading to Improve
Jeff Allen, vice president of operations for Thomas Built Buses, said he believes streamlining the production of the Minotour by changing from a snake production line to a straight line system has helped cut some of the overhead during production. The company also improved its facilities in Jan. 2008 after outgrowing its previous Type A plant, a $10.3 million renovation that included the Type D Saf-T-Liner.
“We were able to close it and move its production to a new optimized line in Plant 1,” said Allen. “After investing $10 million in Plant 1, the Type A line is highly efficient with new paint booths, lighting, conveyors and tooling.”
Thomas’ Truck Operating System (TOS) is another way in which the company is attempting to improve every step of the manufacturing process.
“It applies to every station on the production line, empowering each person at each workstation to achieve that station’s goals while providing continuous feedback so the process is always improving. These improvements impact all areas of the business, starting within the plants and with the employees, we are able to cut out extended lead time,” added Allen.
Concentrating on Type As
Unlike OEMs IC Bus, Thomas Built and Blue Bird — the latter unavailable for comment despite several attempts by STN to obtain information — Collins Bus Corporation has its sights set solely on the Type A market, which has allowed it to concentrate exclusively on body design and construction for its Collins Bus, Corbeil and Mid Bus lines.
“This focus has allowed us to continually improve our production methods and respond faster to customer demands,” said Collins Bus President Kent Tyler. “Also, a significant portion of our production is dedicated to the non-yellow bus market, which has not been subjected to the same specification complexity of the large school bus market.”
Type A production does come with its own set of challenges. Weight limits and weight distribution restrictions for Type A chassis are more stringent or limited than Type C and Type D, and the company spends an extensive amount of engineering and operations time to make sure it meets all of the weight ratings. But, as the largest builder of Type A buses in North America, it is better positioned to counter these challenges.
“We have the engineering staff, chassis inventory/availability, and relationships with the chassis builders that give us a leg up in our efforts to overcome these disadvantages,” added Tyler
But, concentrating on the small bus does not change the effects of commodity cost, with the company seeing a 25 percent increase since the beginning of 2008.
“As much as we’ve tried to avoid it, some of these costs have to be passed on to the customers,” said Tyler.
Other small bus manufacturers are also trying to soften the final costs impacts. Trans Tech Bus had to adapt to the ever-changing costs as has virtually every other manufacturing vendor and supplier.
“We are very fortunate to have several hundred combined years of automotive manufacturing experience working together both behind the scenes as well as directly on the manufacturing floor,” said Beau A. Marksohn, director of sales and marketing. “As a result, we are able to quickly adapt to the ever changing market as well as constantly improve both the build process and our products.”
This process can be further strengthened by keeping conflict off the production line, according to Normand Paquet, vice president of sales and marketing for Girardin Minibus.“It is easy to realize that we have a privileged situation compared to multi-function manufacturing,” added Paquet.
Reprinted from the January 2009 issue of School Transportation News magazine. All rights reserved.
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