The term "partnership" is tossed around a lot in the corporate world, often meaning little more than "doing business with each other."
But for First Student and Thomas Built Buses, their partnership hinges on a level of collaboration and transparency that goes far beyond a typical supplier relationship.
"We don't just buy buses and then hang up the phone till the next year," says Linda Burtwistle, president of Cincinnati-based First Student. "It's an ongoing relationship."
The partnership — which involves executive-level meetings, joint committees and sharing of confidential data with each other — is helping both companies to become more efficient and to make safety improvements that could benefit the entire industry.
"We share our best practices with one another, ask some tough questions and ultimately improve our relationship," says Kelley Platt, president and CEO of High Point, N.C.-based Thomas Built Buses.
New procurement strategy
In 2010, when First Student went out to bid for new school buses, the company decided to take a different approach than it had historically. The shift: focus on lowest total cost of ownership instead of lowest acquisition cost.
The company — which is the largest school bus contractor in North America — also decided to seek a procurement agreement that would integrate vehicles and parts.
"With 50,000 buses in our fleet, we spend millions on replacement parts," Burtwistle says. "This is about more than hammering down the initial price of a bus. This is about the entire cost of ownership."
First Student developed a matrix to determine the total cost of ownership of a bus, with factors including purchase price, warranty, fuel economy and financing terms.
Based on those factors, the contractor awarded its Type C school bus business to Thomas Built, which had already been supplying its Type D buses. Since then, First Student has also shifted its Type A business to Thomas Built.
"We wanted to standardize our fleet," says Kevin Middleton, First Student's executive vice president of engineering and fleet, citing the benefits of standardization in such areas as driver training and maintenance. "We have one manufacturer now that supplies our full range of vehicle requirements."
Middleton gives an example of a door switch that was located to the left of the driver, making the driver look away from the door when opening it. "By including team members from various disciplines, we identify and address improvements at a very early stage," he says.
Another key transparency in the companies' relationship: First Student shares its maintenance schedules and records with Thomas Built, which aids in efforts to increase parts longevity and to drive down maintenance costs.
The two companies are also combining their knowledge to come up with better models and processes for school bus replacement.
"We are looking at ways to help fleet managers better assess when their buses may need to be replaced," Platt says. "This will help fleet managers better manage their budget and future plans, but also help us to gain visibility into when new buses are needed in order to maximize the efficiency of the procurement cycle."
Making a better bus
One of the goals of the partnership is to find ways to make school buses safer and more efficient. Here again, communication comes into play. For instance, First Student gives Thomas Built an extra layer of "eyes and ears on the ground," as Platt puts it.
"First Student provides us with additional insight into what customers are saying, what they are asking for, major issues that are arising and overall trends in the industry," Platt says. "This insight, along with our own internal expertise, helps us pinpoint ways to improve and to ultimately provide even better, safer and more efficient buses."
In addition to executive-level meetings, Thomas Built and First Student collaborate on what they call a "cab committee," in which experts from both companies sit down and discuss vehicle issues, such as the ergonomics of the cabin and where the driver switches are positioned.