On the ground floor at Volvo Penta

By |  May 17, 2018

Employees at Volvo Penta’s engine factory in Lexington, Tennessee, assemble an industrial engine. Photo courtesy of Volvo Penta.

While the next frontier of emission standards for industrial engines in the United States is likely years down the road, Stage V standards will be enacted in Europe in the next couple of years.

According to Volvo Penta, the Stage V standards were a key talking point at Intermat 2018, the trade show in Paris that took place earlier this year. Europe’s Stage V standards will put a limit on the number of particulates as a means to further reduce particulate matter and NOx emissions. Stage V will also drive the adoption of diesel particulate filters (DPFs) for engine manufacturers who have yet to incorporate these into their designs.

All of this will probably be coming our way in the coming years. Until then, Tier 4 Final remains the standard for new equipment and new engines in our industry.

During a trade press event this spring, P&Q had the opportunity to tour an engine factory in Lexington, Tennessee, where Volvo Penta is now handling the final assembly for the production of its industrial diesel engines. Final assembly of Volvo Penta engines shifted to Lexington to improve the customization of engine orders based on specific requirements, the company says, as well as to reduce delivery lead times for Volvo Penta customers in North America.

Historically, the Lexington factory assembled gasoline engines for the marine market. The factory underwent a transformation in recent years, however, to incorporate Volvo Penta’s industrial diesel engines, which represent a growth market according to the company.

According to Mac Rose, Volvo Penta’s vice president of operations at Lexington, about 25 percent of the factory is now dedicated to industrial products. The company’s industrial business has grown nicely over the past three years, adds Ron Huibers, president of Volvo Penta of the Americas.

“The decision to begin final assembly at our wholly-owned facility right here in the United States was made not just to improve flexibility and lessen lead times for our customers today, but also to put us in a better position to support future customer needs as we expand our business and enter new industrial segments,” Huibers says.

The transformation

Before the change at Lexington, Volvo Penta either had to maintain a stock of finished industrial diesel engines or order them from Volvo Group facilities outside of the U.S. with 12- to 14-week lead times. Now, a stock of base engines are maintained at the Volvo Penta facility in Tennessee, as well as all components for the company’s D5, D8, D11, D13 and D16 engines.

“We’d like to be able to offer a week’s lead time,” Rose says, adding that the Lexington factory turns its inventory about 150 times per year.

According to Volvo Penta, when a customer order is currently placed, the engine and components are pulled from shelves at Lexington and the engine is built, programmed and tested to the specifications required. Orders are typically delivered within two weeks.

“Catering to the versatility of our customers’ individual specifications, we’re now able to provide them with far greater flexibility to order exactly what they need while significantly shortening the window of delivery,” says Darren Tasker, vice president of industrial sales for Volvo Penta of the Americas.

Since introducing its Tier 4 Final range in 2014, Volvo Penta says it has experienced good growth in the industrial market, including segments such as materials handling, construction and power generation. Volvo Penta considers its selective catalytic reduction technology as a contributor to its growth. The lack of a DPF on its Tier 4 Final engines has contributed to Volvo Penta’s industrial engine growth, Huibers says.

Another facility tour

Volvo Group’s Central Parts Distribution Center in Byhalia, Mississippi, contains roughly 70,000 SKUs. Photo by Kevin Yanik.

In addition to touring Volvo Penta’s engine factory in Lexington, Tennessee, P&Q visited Volvo Group‘s Central Parts Distribution Center in Byhalia, Mississippi.

Measuring 1 million sq. ft., the facility supports the Mack Trucks, Volvo Penta, Volvo Trucks and Volvo Construction Equipment brands.

Those on the tour saw firsthand how employees complete thousands of orders by picking, processing, boxing, labeling and loading parts that are ultimately shipped to Volvo dealers. According to Volvo Group, about 18,000 orders ship from the parts distribution center every day.

“The work is non-stop here,” says Gavin Giwer, who supervises the service center. “All day, every day we’re locating and processing the aftermarket parts that our Volvo Penta dealers need and making sure they are delivered safely and on time. It’s hectic, for sure, and we work at a fast pace.”

Located 25 minutes from the FedEx SuperHub in Memphis, the Byhalia site represents a $70 million investment by Volvo Group. The company broke ground on the site in 2014 to establish a central distribution hub for Volvo Group in North America.

Nearly 500 people are employed at the parts distribution center, which contains about 70,000 SKUs – including about 21,000 specifically for Volvo Penta. About 35 percent of shipped Volvo Penta parts are considered “high-moving parts,” and an area of the distribution center is dedicated to high movers.

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