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AUTOMOTIVE: Volvo Invests Over $700 Million in a New Factory for Heavy Mack and Volvo Trucks in Monterrey

The proprietary product database KOLA and PTC's solutions CENTRAL IN VOLVO'S PRODUCT REALIZATION SET-UP. The Volvo Group will build its new Mexican factory for heavy trucks in Monterrey, Mexico. The company says so in a press release. As announced on April 11, the plant will complement the group's US production and provide additional capacity to support the growth plans for both Volvo Trucks and Mack Trucks in the US and Canadian markets, additionally also for Mack truck sales in Mexico and Latin America.
The Swedish truck manufacturer further writes that Monterrey provides significant logistical efficiency gains to support sales to the Southwest and West regions of the United States and to Mexico and Latin America. With its proximity to the US border and its well-developed infrastructure, the Group considers Monterrey an ideal location to build a mature supply and production ecosystem.
In general, it can be noted that Volvo Group's growth in North America is a strategic priority for the group. In light of this, today's announced investment should be seen as part of a comprehensive effort to increase the strength and flexibility of the group's industrial footprint and supply chain in the region. This includes an agreement to acquire Commercial Vehicle Group's (CVG) production facility in North Carolina, which makes cabs for Mack's heavy-duty and medium-duty trucks, for about $40 million. The deal was announced on August 1 by CVG and is expected to close in the second half of this year.
The factory in Monterrey is estimated to cost around $700 million, and will focus on the production of heavy conventional vehicles for the Volvo and Mack brands. It will be a complete assembly plant for conventional vehicles including manufacturing of cab body in white and other colors. The plant is expected to be operational in 2026.
Regarding PLM and industrial IT support, it can be noted that the Volvo Group has a policy decision to mainly within the group–which includes brands such as Volvo Trucks, Renault Trucks, Mack Trucks, Volvo Construction Equipment, Volvo Buses–use PTC's PLM /PDM suite Windchill, including the CAD solution Creo, and other software. How it will apply to the production support in the Monterrey plant has not been communicated. But centrally and in terms of PLM, Volvo Group has several parts of IT support that already sail under a common flag, of which KOLA is the most important. KOLA can be described as "the heart of the group" and is the company's proprietary product database that contains product structures and acts as a backbone for product configuration.

But there is more on the PLM agenda: As PLM&ERP News previously reported, in addition to the decision to consolidate operations on PTC software, that the group also has installations with software from Dassault Systèmes, SAP, Ansys, ESI and Siemens.

Regardless of what happens with the software setup for industrial IT support in the Monterrey facility, it is generally true that PTC on the PLM side and in parts on the production side has ended up in something of a ”pole position.” This is also reflected in Volvo Group’s position as one of PTC’s largest global customers.

3D model driven development
This can, among other things, be traced back to PTC’s ability to create and manage 3D digital twins of manufactured products as well as this PLM player’s development of, or purchase of (such as the German Codebeamer), software capable of deriving manufacturing and service information such as mBOMs (manufacturing Bill of Material) and eBOMs (engineering BOM), routing plus manufacturing and service work instructions – even in immersive 3D augmented reality environments – from the digital mockup. PTC calls this concept ’3D model driven’.
But the company has also in recent years developed a special PLM-related adaptation for companies, such as Volvo, that rely on configure-to-order or platform strategies. Newer versions of PTC software can automatically configure 3D digital twins to match the variant configuration ordered by Volvo’s customers and then generate variant-specific 3D manufacturing and service information to match this. ”The approach enables an efficient approach for any build-to-order company and is the only practical way for such a company to leverage 3D data for manufacturing and service,” former PTC exec Jim Heppelmann said in a previous PLM&ERP News- interview.

KOLA’s central role
But none the less: KOLA is there as a foundation in the PLM setup. What is the role distribution between this product and configuration database and the PTC cPDm system Windchill?
One aspect here is that Volvo has long relied on KOLA to generate order configurations and then drive related sales and manufacturing processes. It has been the key to Volvo’s high growth and profitability. But as Heppelmann pointed out in the same interview as above: ”The common goal of PTC and Volvo has been to connect KOLA to Windchill in a way that KOLA can continue to own and process the configuration logic that drives each variant, but then Windchill in turn can generate 3D engineering models plus manufacturing and service deliverables to match the order configured in KOLA.”

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