PACCAR Revs IT Innovation Amid A Brutal Recession
Heavy truck maker, the No. 1 company in our 2011 InformationWeek 500 ranking, makes its mark with in-vehicle electronics.
PACCAR, a 105-year-old, publicly held company with descendents of the founder still at the helm, is known for a conservative management style that has let it deliver 70 straight years of profit in the cyclical business of making semitrailer trucks. And yet, in the teeth of the worst recession in decades, PACCAR took a risk on a major IT project. The results can be seen inside its newest trucks, part of the company's effort to claw back from a nearly 50% plunge in sales during the downturn.
PACCAR, a name derived from the former Pacific Car and Foundry Co. located just outside Seattle, isn't a household name, but you'd be hard-pressed to travel a U.S. highway without seeing one of its Peterbilt or Kenworth brand trucks.
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Ten years ago, the IT leadership at PACCAR set out to craft a vision for how electronics would change the trucking and freight hauling business, and what PACCAR trucks would need to compete. IT staffers circulated among the other disciplines of the company--from truck designers to parts engineers--and talked about the growing importance of in-vehicle electronics.
From that process, the company's business and IT leaders formed a consensus that PACCAR itself should be the one to develop the electronics--even though it had no expertise in wireless, consumer electronics, or consumer-friendly computer interfaces. This was too big an opportunity to drive sales by differentiating its trucks (which also include DAF in Europe) to leave to makers of aftermarket electronics.
"IT functioned in the role of setting a vision of what might be possible," says Kyle Quinn, PACCAR's CIO, whose unflappable nature would be tested by the project's ups and downs. The vision was an onboard network collecting data from sensors to warn of performance problems, plus a navigation system crafted to truckers' needs. Using pervasive wireless links to send that data back to dispatchers, companies could be constantly updated on a truck's location and performance--something that had been too costly for all but the most specialized truck fleets.
At a company that produced the first aerodynamic semicab design in 1985, a breakthrough that changed the industry, this felt like the right road forward.Top management, right up to Mark Pigott--chairman, CEO, and great-great-grandson of company founder William Pigott Sr.--bought into the idea. Once work began, lest the IT team forget the strategic importance, there was the monthly call with either the chairman or vice chairman, asking how the project was progressing.
Quinn, the CIO, looks like the sort to walk a tightrope over a chasm and step down on the other side without fanfare, as if it were just part of the job. Turns out, that was close to what he'd have to do.