They may haven’t met before, but Dick Aalderink, a young man at the head of an aspiring Dutch suspension business, and corporate strategist Kenichi Ohmae share a common belief – both understand that creating real value for the client can be the most powerful business tool available.
In a 1988 article published in the Harvard Business Review, Japanese-born Kenichi Ohmae questioned the wisdom of a single-minded focus on rivalry and industry structure. At the time, the business culture of the United States was obsessed with Japan and the rivalry-based competitive model that had apparently given rise to that country’s world-beating economy. Ohmae, however, argued that a successful business strategy should be less about defeating the competition, but more about creating value for the client.
Now Aalderink, CEO of Europe’s only spring manufacturer who is also able to develop and manufacture its own air suspension system, has translated that lesson into a viable post-recession strategy. “Assessing a product’s true value to the client has become the most important aspect of our work,” he says. “Yet value is a variable that is far less conspicuous than price, because it often depends on the customer’s subjective assessment.”
As a result, Aalderink wouldn’t just trust in a standardised product when entering a new business environment – especially if it’s a marketplace as vast and volatile as crisis-shaken North America.
“Few companies go to the trouble of estimating exactly how much economic value the customer receives from a product. But we feel that determining economic value is such a worthwhile exercise that we have based our whole corporate strategy around it,” says Aalderink, who dared leading VDL Weweler out of a crisis-induced hibernation in spring 2011.
During the pre-GFC good old days, VDL Weweler was almost solely depended on the European market. “Europe is a very competitive environment and we have claimed our stake here, but now we need a second, big volume mainstay overseas – and we believe the US is the place to be.”
In fact, the Dutch brand has been eying the US market since early 2011, when the domestic economy showed first signs of recovery. “I realised that the key to expansion is not a technical one. After 80 years in the business, we have gained vast knowledge in axle clamping, which is the critical part of our Bolt-on® concept. The challenge is finding the right fine-tuning to create add-on value,” says Aalderink, referring to Ohmae’s ageless truth – to thrive, a company must deliver superior value to someone.
“After extensive research and development, we can draw on all the building blocks to create a competitive product, we just need to find the right combination for each market,” he adds. “The question is how can we source local expertise to help us find that unique configuration.”
Via Chinese brand Fuwa, VDL Weweler came across US axle expert AXN, who helped the company design a whole new version of the successful Modular Bolt-on Suspension range, or MBS. AXN will launch the North-American range as MARS, Modular Air Ride Suspension.
“The whole design process took us half a year, which is quite fast for developing a new suspension system,” says Aalderink. “The reason is that we already had all the ingredients at hand. The modular system enabled us to combine a range of existing building blocks, and AXN helped us find the right mixture.”
One alteration the Dutch company had to make was translating the concept into the imperial system – a challenge in regard to both patenting and tooling. “As a flexible company, you have to overcome a challenge like that and simply make it happen,” says Aalderink. “You can’t just present an existing product, especially a metric one, and expect the market to accept it. You have to listen first and then implement that knowledge into the production process. That’s the most important lesson you have to learn when you want to go abroad – don’t try to persuade the client into buying a product, but use your knowledge and competence to create one they truly value.”
During the design process, the Dutch engineering team also realised that US standards would require changing both length and height of the product. “For instance, we had to flatten the rear of the trailing arm to allow enough clearance for the air spring,” says Aalderink. “That process alone has generated two US-specific patents, which are currently pending. The result is a lightweight, non-integrated air suspension that is based on the proven Bolt-on principle. There is a stigma about U-bolts in the US that they need to be re-torqued. But with our Bolt-on design this is old news.”
According to Aalderink, welding is an inferior joining method because there is a whole variety of parameters that can influence the quality of a weld. “We want a flawless product that is based on a lean supply chain so you can get the perfect package in a short time and put it together at your convenience. All you need is the right tooling; it doesn’t require any special skill.”
Despite that perceptiveness, however, there still is a residual risk to the updated Bolt-on design. “We have designed something completely different to anything available in the US at the moment, and there is always a risk to a move like that,” says Aalderink, knowing that the market share of air suspension in the US fell from 75 to 50 per cent in the last decade. “That’s why we presented the design in separate room at AXN’s booth at the last Mid-America Trucking Show to see how the local clientele would react.”
Although hidden away in a secluded room off the exhibition space, MARS caused a stir in Louisville. There was no need to bring up a classic marketing pitch, according to Aalderink. “The advantage was so obvious we didn’t have to explain a thing. We all know that with an aging fleet, a suspension system has to be cost-efficient and maintenance-friendly at the same time. That’s why the integrated air suspension has fallen from grace – a repair basically means replacing the entire unit. Our system can now combine the finesse of an air suspension with the simplicity of a mechanical one. You can basically change whatever part you want, even the axle beam. In addition, MARS has hardly any pivoting element, which will make it even more reliable than a mechanical solution. In that sense, we have combined the best of both worlds – and it was our clientele who made us aware of it.”
A humble Dutch company, that encouragement has boosted VDL Weweler’s confidence to a new high. “Now we know that there is an amazing opportunity for us in the US, and that we can really make a difference if we do our job right and keep listening to the local clientele,” says Aalderink. “In a way, we almost had an additional value proposition handed to us, but we still like to believe in a more systematic approach. The first step, in our view, must be working out exactly which benefits potential customers want.”
In that sense, the Dutch CEO is at eye-level with business veteran Kenichi Ohmae. “What should come first is painstaking attention to the needs of customers and a close analysis of a company’s degrees of freedom in responding to those needs,” he said a quarter of a century ago.
In an economy that is still traumatised by half a decade of crisis management, Aalderink has now shown that 2012’s business elite is still willing to rethink a product and has the skill and courage to create a lean business system around it to best design, build, and market it.