Customer-centric innovation model a big win for tire supplier Kal Tire


The largest mining trucks in the mining industry can easily handle loads of over 500 tonnes, which means that these trucks need reliable tyres to drive on. The tyres have to be resistant to rocks and possible punctures, since repairs or changes to the tyres are very expensive and time-consuming. Mining Tire Group Kal Tire though they could do much more than simply supplying tyres and providing service for tyres. The company possesses decades of global expertise, that could be used to develop innovative solutions to improve performance and safety (Topf, 2017).

What is customer co-creation?

According to Prahalad and Ramaswamy (2004), co-creation is defined as ‘’the joint creation of value by the company and the customer; allowing the customer to co-construct the service experience to suit their context. In other words, it means that new ideas are produced by the company and the customers working together. Mostly, this increases the customer satisfaction because customers feel the company really listens to their feedback, and uses it to improve their products or services. If customers feel the company is delivering to their specific needs, customers want to be even more engaged with the company (Topf, 2017).

Customer co-creation at Kal Tire

Innovation and R&D manager Nilsson said Kal Tire is asking their customers for feedback as to how it can expand into other areas and become more innovative (customer value proposition) (Topf, 2017). As a result, the Innovation Centre was born in 2015. Kal Tire can develop new tools and processes to increase productivity and safety. Nilsson stated ‘’we are generating ideas from the operations on a regular basis which we then evaluate and see how we can start these ideas”. When looking at innovative servicing, Kal Tire made improvements to service contracts, which are generated from customer feedback or from within.

“Customers are looking for products or solutions that will solve their problems and make their life easier, so customers’ expectations will continue to drive innovation,” Nilsson said. As a result, all members of Kal Tire are encouraged to contribute ideas for projects for the Innovation Centre, in order to promote safety, performance and add value for customers (key resources and process). Finally, this innovation is going to give Kal Tire and their customers a competitive edge (Topf, 2017).

The success of customer co-creation for Kal Tire

Co-creating is very successful for Kal Tire. They use decades of knowledge in the mining/tire industry, to improve customer engagement, as well as customer satisfaction (joint profitability). This structure leads to an influx of new ideas while lowering R&D costs. Currently, the Innovation Centre is comprised of four truck bays with electrical and pneumatic outlets. The Innovation Centre is a way for Kal Tire to develop new tools and processes to enhance customer productivity and safety in the field. Examples include a ram mount tool and a remote-controlled service trolley.

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They develop ideas in the Innovation Centre, engineer it, certify it, and perform a three-month field test. After this, the Innovation Centre will get videos, pictures and reports. If successful, Kal Tire will make the new product available to the entire Tire Group. Thus, the feasibility requirement is met since the co-creation concept is implemented and turned out to be successful. The institutional environment is not as relevant, because customers only interact with employees of the Innovation Centre to share ideas (Topf, 2017).

References:

Topf, A. (2017). Customer-centric innovation model a big win for tire supplier | MINING.com. [online] MINING.com. Available at: http://www.mining.com/customer-centric-innovation-model-a-big-win-for-mining-truck-supplier/ [Accessed 4 Mar. 2017].

Prahalad, C. K., & Ramaswamy, V. (2004). Co-creation experiences: The next practice in value creation. Journal of interactive marketing18(3), 5-14.

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