Using IoT to extend the traditional business model and provide a more holistic mobility experience for customers
- Michelin¹ is a global player in mobility and one of the leading tyre manufacturers across the globe.
- Michelin has 107,000 employees and achieved revenues of €21 billion for period ending TTM 6/15 and an EBITDA of €3.4 billion; margins have increased from 13.8% in 2011 to 16.6% TTM 6/15.
- EFFIFUEL™ by Michelin Solutions was the first innovation in the market targeting increased efficiency in fleet fuel consumption.
- Michelin Solutions makes a contractual agreement to meet pre-defined targets, or otherwise provides a refund in proportion to expenses incurred.
- EFFIFUEL™ is a comprehensive ecosystem that includes sophisticated telematics, training in eco-driving techniques and the EFFITIRES™ optimized tyre management system.
- EFFIFUEL™ provides a “satisfaction or your money back guarantee” by providing the fuel efficiency service risk-free to truckers.
- EFFIFUEL™ encourages careful handling of the truck equipment, leading to extra savings for companies and a potential doubling of pervehicle profits.
- A reduction in fuel consumption of 2.5 litres per 100km represents annual savings of €3,200 for long-haul transport (at least 2.1% reduction in total cost of ownership and 8 tonnes in CO2 emissions).
- Business model shift from selling tyre as a product to a service guaranteeing performance, has helped Michelin achieve higher customer satisfaction, increased loyalty and raised EBITDA margins.
- Michelin initiated the digital transformation internally, but they soon realized that in some critical areas, such as big data analytics or infrastructure they needed to partner with external experts.
- Cultural change was another prerequisite to successfully manage the digital transformation journey.
- The risk of changing the business model was mitigated since Michelin Solutions was created as a standalone entity and the company decided to test the solution by launching several pilots.
Michelin Solutions is one of more than 100 case studies identified as part of the World Economic Forum’s Digital Transformation of Industries initiative. An overview of the DTI program can be found here.
1. Sources: Michelin, WEF/Accenture Analysis