From tire supplier to global service provider
Michelin is engaged in an approach centred on Performance and Responsibility which aims to limit the environmental impact of its products and its locations, sharing a target of sustainable development. Tires play a major role in fuel efficiency, which places them at the heart of truck fleet economics. There are a number of technical means one can employ to reduce rolling resistance and fuel consumption. These include optimising design and compound and reducing tire mass to decrease friction. Mass reduction has a direct impact on tire cost as it reduces raw material consumption. It also has an economic impact for the truck fleet as it frees up space for goods and improves payload given the current regulatory constraints on the size of trucks.
However, the core issue remains that if less transport emissions is what we need to reduce carbon emissions, how can a business such as Michelin improve its turnover while selling fewer tires? The answer is by replacing sales of tires and services and invoicing the kilometres travelled, in other words by proposing the full outsourcing of the tires of a specific fleet. Michelin was the first to propose this model in 2001 and is the European leader for outsourcing truck tires. Michelin’s interest is then to limit the consumption of tires and this has significant environmental and economical impacts, such as:
- Reducing the consumption of raw materials and the number of used tires by optimising the tires’ life; by working on the product (inflate, permutations, repairs); regrooving (90%); REMIX retreading (90%); and a traceability and valorisation of definitely used tires.
- Reducing the fuel consumption by product innovation: Energy and X-One tires reduce fuel consumption of 5 to 6%, services performance; systematically regrooving and better follow up of inflation pressures; and increasing safety through better tire care (pressure, tread depth).
- Simplification for the fleet owner who gets a fixed price per kilometer whatever the reality
The logistics industry is experiencing a major change, and one of the trends is for increasing consolidation and professionalism of the industry characterised by the emergence of large fleets in Europe and North America, with some players experiencing faster growth than the rest of the market.
One of the consequences of this increasing professionalism is the increasing focus of players on their core business, which is logistics, and a tendency to outsource the rest, such as tire-related issues. Another consequence of the trend is increasing standardisation of processes with greater emphasis on total cost of ownership and operating costs than on purchase cost. That is why, to meet these new expectations from fleet owners, Michelin is now positioning itself as a service provider as opposed to a tire vendor, and develops a complete solution-based offering including comprehensive tire management services for Michelin tires only.
The logistics sector should be better reflected in European transport policy as it holds a critical place amongst European industries in optimising supply chain services. It is crucial for political, regulatory and legislative stakeholders to see logistics not only in the limited sense of goods transport and warehousing, but also in the wider context of the complex macro-economic role it plays in helping deliver a competitive European industrial base.