IVECO – Workshop Development Maximiliano Cascini Workshop Development Manager Turin, 09/09/2008.

Turin, 09/09/2008

IVECO – Workshop Development

Maximiliano Cascini

Workshop Development Manager

Turin, 09/09/2008 IVECO 2Data classification: internal

IVECO History

1997 Iveco Fiat do Brazil

1996 NAVECO 2006 Yuejin2006 SAIC-Iveco-Hongyan

1992 Iveco Truck Australia Ltd.

1991

1986

1991

1986

1999-2001

1975

2007 Samotlor Russia

Industrial VEhicles COrporation

Turin, 09/09/2008 IVECO 3Data classification: internal

Customer Service – What we are supposed to do

•To give IVECO customers To give IVECO customers an excellent service at an excellent service at

competitive costs in order competitive costs in order to ensure maximum to ensure maximum

customerscustomers’ ’ loyaltyloyalty and and Iveco profitabilityIveco profitability

•To give IVECO customers To give IVECO customers an excellent service at an excellent service at

competitive costs in order competitive costs in order to ensure maximum to ensure maximum

customerscustomers’ ’ loyaltyloyalty and and Iveco profitabilityIveco profitability

Turin, 09/09/2008 IVECO 4Data classification: internal

C.V. – Iveco Service Points network

Western EuropeService Points: 2035

Eastern EuropeService Points: 204

Africa & Middle EastService Points: 261

South & Central AmericaService Points: 135

Total Service pointsTotal Service points 3.7663.766

Update data June 2008

Asia PacificService Points: 103

ChinaService Points: 1028

Turin, 09/09/2008 IVECO 5Data classification: internal

Workshop Development

OUR MISSION

To create, develop and maintain

a SERVICE NETWORK assuring

the highest level of service

quality to guarantee a profitable

partnership with Iveco while

satisfying customer

expectations.

Turin, 09/09/2008 IVECO 6Data classification: internal

CUSTOMER SERVICECUSTOMER SERVICE

SSTTAAFFFF

AACCTTIIVVIITTIIEESS

SALE

MARKETING

SUPPLY

CHAIN

SERVICE

CUSTOMER SATISFACTIONCUSTOMER SATISFACTION

WORKSHOP DEVELOPMENTWORKSHOP DEVELOPMENT

LINE ACTIVITIESLINE ACTIVITIES

CUSTOMER SERVICECUSTOMER SERVICE

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AACCTTIIVVIITTIIEESS

SALE

MARKETING

SALE

MARKETING

SUPPLY

CHAIN

SUPPLY

CHAIN

SERVICE

SERVICE

CUSTOMER SATISFACTIONCUSTOMER SATISFACTION

WORKSHOP DEVELOPMENTWORKSHOP DEVELOPMENTWORKSHOP DEVELOPMENTWORKSHOP DEVELOPMENT

LINE ACTIVITIESLINE ACTIVITIES

Workshop Development role in a Matrix structure

Designing a proper coverage network, equally distributed in the country at an international level;

Defining quality standards to ensure the same services in every workshop in the European area;

Managing workshop development;

To customize the level of service

Turin, 09/09/2008 IVECO 7Data classification: internal

TAS – Top Assistance Service

Our goal: to identify the necessary actions to

improve the service offered in terms of:

• Capillarity/covering of the Authorised Repairers Network in Europe

With specific reference to the main European long distance routes

▀▀ more presence long distance flows

▀▀ less presence long distance

flows

1. Identification of the intervals

and relative flows

• Service Quality (in particular 24h)

Turin, 09/09/2008 IVECO 8Data classification: internal

2. Capillarity/geographical

covering analysis

The TAS analysis is conducted both for Trucks and Buses

TAS – Top Assistance Service

S.P.

3. Analysis of the results and

action plan

Turin, 09/09/2008 IVECO 9Data classification: internal

Investments Vs Customer satisfacion

• Our aim is to “improve our knowledge on how much value and importance customers associate to the supplied services.”

• The knowledge of the “value for customer” of our different services will help our company “to develop services trying to reach customer satisfaction.”

• “We will be able to measure the return on the investment done by Iveco Customer Service to increase our customer satisfaction – and our Customer loyalty.”

Turin, 09/09/2008 IVECO 10Data classification: internal

The knowledge on the value perceived by the customer can be considered related to the wishes and expectations that supplier should satisfy.

Our assumption is that life time value is the end outcome of the ability of the enterprise of satisfying customer expectations.

The value perceived by the customers is the cause and life time value is the fact.

Major Objective of our frameworkUnderstand what is the source of the value perceived by

the customer in order to focus investments on it.

The Customer Lifetime Value Evaluation Framework - Introduction

Turin, 09/09/2008 IVECO 11Data classification: internal

The Customer Lifetime Value Evaluation Framework – Qualitative analysis

• We assume cause-effect relations between the variables.

• Cause-effect chains represent causal relations between KPIs and they show the causality.

• Subsequent quantitative analysis should confirm causal links that may drive the return on the investments on customer

Turin, 09/09/2008 IVECO 12Data classification: internal

The Customer Lifetime Value Evaluation Framework – Quantitative analysis

• The quantitative model estimates the causal relations.

• The model identifies which investments really influence customers behaviour and profitability.

• The quantitative model includes two statistical tools: – Granger’s causality model

to validate the causal relations

– Latent Variables Structural Equations (LVSE) to quantify the implicit variable of customer experience

Latent VariableStructural Equations

Granger’s causalitymodel

Regression Model

>> WAIT ALL KPI

Phase I

Phase II

CausalModel

LVSE Model

Latent VariableStructural Equations

Granger’s causalitymodel

Regression Model

>> WAIT ALL KPI

Phase I

Phase II

CausalModel

LVSE Model

Latent VariableStructural Equations

Latent VariableStructural Equations

Granger’s causalitymodel

Granger’s causalitymodel

Regression ModelRegression Model

>> WAIT ALL KPI

Phase I

Phase II

CausalModelCausalModel

LVSE ModelLVSE Model

Turin, 09/09/2008 IVECO 13Data classification: internal

Conclusions

• Customer lifetime evaluation framework can allow substantial improvements in customer service and ultimate profitability – The qualitative framework is highly beneficial since it allows to surface

customer experience.

– Quantitative analysis tests qualitative assumptions

• Specifically quantitative analysis allows – To discover the behavioiur of customers and service structures that may

be disguised by efficiency biased measures

• Good boys / bad boys

• Real return of loyalty campaigns in terms of higher sales

• Etc

– To identify the improvement actions really needed

• E.g. service bottlenecks

• Organization drivers

• Etc.

Turin, 09/09/2008 IVECO 14Data classification: internal

The analysis framework includes two analysis stages:– Qualitative: a cause-effect chain that links some input variables

(investments) and output variables, that describe customer experience, and finally financial outcomes that describe the business impact of the customer experience.

– Quantitative: based on statistical models that identify and estimate links between variables.

The Customer Lifetime Value Evaluation Framework - Overview

Model &

Qualitative Analysis

Model &

Quantitative Analysis

Customer – Supplier interaction model Sample Data KPI

Correlazione / Causality

Causal chain customization

Investment Variables

Process & System

Behavior

Customer’s value

variables

Financial Variables

Turin, 09/09/2008 IVECO 15Data classification: internal

The Customer Lifetime Value Evaluation Framework – Qualitative analysis

• Customer's Value variable:oCustomer’s value

oNew Customers

oChurn

oCustomer Loyalty

oProfitability

• Financial Variables:oAsset

oLTV

oAGP

• Investment Variables:oHR Educational

oTechnology capability

• Process & System Behaviour:oPromise

oTA e TR

oContact duration

oCustomer’s incurred cost

Turin, 09/09/2008 IVECO 16Data classification: internal

IVECO PRODUCTS

With such a diversified range, Iveco is capable of satisfying the needs of all customers and contribute to making their business more

profitable. Our range is constantly updated to offering the right, most reliable and best quality vehicle for each mission.

Innovation and high technology constantly contribute to more effective environmental protections.

Turin, 09/09/2008 IVECO 17Data classification: internal

IVECO PRODUCTS Light Commercial Vehicles

Daily Daily 4x4

The Massif is the first IVECO off-road vehicle. It is a true off-roader for any terrain, able to offer top level specific performance and tackle extreme off-road routes with aplomb.

Massif

Turin, 09/09/2008 IVECO 18Data classification: internal

IVECO PRODUCTS Medium and Heavy Vehicles

EurocargoStralis AS

Stralis AT/AD

Trakker

Turin, 09/09/2008 IVECO 19Data classification: internal

IVECO PRODUCTS Buses and coaches

Irisbus Iveco is a leader in the passenger transport segment.

Established in January 1999 from the merge of the passenger transporting divisions of Iveco and Renault, Irisbus is today entirely owned by Iveco.

CITY BUSES

INTERCITY AND TOUR BUSES

MINIBUSES

Turin, 09/09/2008 IVECO 20Data classification: internal

IVECO PRODUCTS Special Vehicles

Iveco Defense Vehicles

Iveco Astra

Iveco Magirus Fire Fighting