Case Study 1: Big Data and Volvo Corporation

Mary Gierszewski

CIS 500 – Information Systems for Decision Making

Fall Quarter 2012

Strayer University

Instructor: Dr. James Francisco

October 28, 2012

Volvo Corporation is an automobile company that uses IT resources to help give it an

advantage over its competitors. This paper will discuss how Volvo Corporation integrated the

cloud infrastructure into its networks. It will explain how Volvo Corporation transforms its data

into knowledge. The paper will also discuss the real-time information systems that they

implemented and how these implementations impact the company. Finally, it will discuss how

the Big Data strategy gives them a competitive advantage.

“An opportunity to launch a new marketing campaign presented itself with the release of

the popular Twilight series of books and subsequent movies, which featured Volvo cars.” When

the movies came out, they drove more traffic to the Volvo website than the site could handle.

The website had outages and slow performance due to the increase of traffic to their website.

Volvo Corporation turned to Microsoft Gold Certified Partner LBi to help them make on online

game and to help them deal with the issues that they experienced during the release of the first

few movies and books. (Volvo Cars Volvo Unleashes Creativity, 2011, para.3 & 5)

“Building such an infrastructure was not beyond the technical expertise of either Volvo

or LBi; however, to do so would be cost-prohibitive.” Volvo Corporation needed a system that

was cost effective and one that was able to handle an enormous amount of traffic to their

website. This is where Volvo Corporation decided to implement using a cloud based system.

(Volvo Cars Volvo Unleashes Creativity, 2011, para.8 & 9)

Volvo Corporation used a system called Windows Azure. This system helped them to

implement their online, interactive game. “That was no problem, however, as development was

simple with Windows Azure.” They used the Microsoft Visual Studio 2010 Professional

development system. “As needed, Volvo quickly added new web roles and scaled up to meet

traffic demands.” (Volvo Cars Volvo Unleashes Creativity, 2011, para.9 & 10) “Volvo took advantage of strategically placed Microsoft data centers across the globe, all

of which are SAS 70 Type II – the highest industry standard for data security.” Using these

systems, the company was able to handle high volumes of traffic and did not encounter any

security issues. This did this all while being cost effective. (Volvo Cars Volvo Unleashes

Creativity, 2011, para.13 & 15)

In 1999 they began to collect data to help in the performance of the vehicle and to see

what the mechanical failures were. Codes are stored in the engine control units and the codes are

then read when the vehicles come in for maintenance. The codes are then uploaded to a central

database at Volvo. (A Car Company Powered by Data, 2011, para.5 & 7)

“Volvo harvests their data aggressively as a resource for improving product design and

manufacturing quality.” In 2006 they began using a system called Teradata, that their now

former owner, Ford, was using. The Teradata system helps them to bring data together from four

different sources. Using this new system immediately increased the raw data available and

increased their response times drastically. (Car Company Powered by Data, 2011, para.9, 14-16)

This system helped them to improve their warranty reimbursements. It also helped Volvo

prioritize, target and expedite problem response efforts, to trace mechanical problems to the root

causes, model failure rates over time, to correlate mechanical failures with specific geographical

locations, and to resolve quality issues within current production. (Car Company Powered by

Data, 2011, para.27, 29-30, 33, & 35)

Volvo Corporation uses RFID technology for several different things. One of them is on

the painting and finishing for their vehicles. “RFID data carriers are built into or on workpiece

carriers, or are built into vehicles, mostly for production control. The latest efforts are in the

production logistics sector, where ekanban is used to ensure replenishment, or components

already tagged by the supplier are verified by RFID as they are installed…” Deister electronic

along with Volvo developed a special UHF reader for production control. (UHF Techology,

2012, para.2 & 4)

Volvo uses something called “one-way labels” as transponders. “At the start of

production an individual smart-label transponder is applied to each body; the reference number

on the label controls the body’s passage through production. This eliminated the high

recirculation costs for cleaning the data carriers used previously at the end of the line and

returning them to the start for reuse. In addition continual replacement of the low-cost labels

ensures that they are technically up to date.” Replacement of Volvo’s old system to this new

system was planned for mid 2009. (UHF Technology, 2012, para.6-7)

I believe that Volvo Corporation does have a competitive advantage compared to other

car companies because of the data that they accumulate. Their vehicles have hundreds of censors

and CPUs throughout them. This data gets transferred to a cloud system which in turn goes to

the Volvo Corporation. This data is then being used to help optimize manufacturing processes.

This in turn will make their vehicles safer. (Converting Data into Business Value, 2011, para.1 &

2)

Through the data, they are pre-warned about any mechanical issues that might have

shown up later on. Due to this data they receive, they are able to stop potential problems before

they occur as recalls to millions of Volvo owners. (Converting Data into Business Value, 2011,

para.3)

Volvo Corporation also receives data from their vehicles that have been in accidents.

This data lets them know how well the vehicles responded in the accidents. “This enables Volvo

to further enhance its market-leading safety record.” (Converting Data into Business Value,

2011, para.4)

How secure and safe a vehicle is, is one of the top reasons people purchase certain

vehicles. Volvo uses every piece of data that they receive to make improvements on their

vehicles while they are being made, after they are made and even when the vehicles are in

accidents. By using data, I believe that it definitely gives Volvo an advantage over other

car companies.

References

A Car Company Powered by Data. (2011). Retrieved October 26, 2012 from http:// www.teradata.com/case-studies/Volvo-A-Car-Company-Powered-by-Data-eb/.

Converting Data into Business Value at Volvo. (2011). Retrieved October 26, 2012 from http://www.i-cio.com/case-studies/volvo-big-data.

UHF Technology from deister electronic for Painting and Finishing. (2012). Retrieved October 26, 2012 from http://www.deister.com/us/info/press-release/press-release-view-detail/news/uhf-technology-from-deister-electronic-for-painting-and-finishing/.

Volvo Cars Volvo Unleashes Creativity, Engages One Million Visitors with Cloud-Based Campaign. (2011). Retrieved October 26, 2012 from http://www.microsoft.com/casestudies/Case_Study_Detail.aspx?casestudyid=400000849 0.