Over the past year, Blue Bird Corp. has continued its push to re-energize its school bus division. At the helm, President/CEO Jeff Bust has weathered the loss of key dealers and believes that the turnover has created a stronger and more committed sales force. The changes have also helped him to better appreciate the dealers who’ve remained in the fold.

Bust is never satisfied with the status quo. He pushes for continuous improvement in all areas — manufacturing, sales, financing, service, support and, especially, quality. The key reason for the emphasis on improvement is expectation, specifically, the customer’s. “School bus customers have greater expectations every year,” he says.

One of Blue Bird’s top strategic projects is the development of a conventional school bus that will be better positioned for the contractor market as well as for state bids. This initiative, dubbed Project Victory, has entered the prototype testing phase and shows great promise.

Bust recently spoke about these and other Blue Bird initiatives with SCHOOL BUS FLEET Editor Steve Hirano.

SBF: How is Blue Bird doing today versus a year ago, when we last spoke?
Jeff Bust: When we spoke last year, Blue Bird was in the midst of launching the 2005 Strategic Initiatives. These were strategic sourcing, Project Victory, service parts growth, Coachworks growth and process improvement.

Strategic sourcing has had far-reaching effects on Blue Bird. Our supplier base has decreased from more than 2,000 to about 1,000 suppliers in the past 12 Novembers, and we have made significant modifications, including the changes with Cummins just announced in September.

In other areas, Project Victory has progressed smoothly to prototype testing. Service parts fill and availability have made large improvements over the past year. Coachworks (non-school bus segment) has ramped up production and made substantial improvements year over year.

In addition, process improvements have been made in all functions: manufacturing, engineering, purchasing and finance.

We have had an unprecedented number of customer visits at our facilities over the past year, and the consistent comment is, “Blue Bird is energized, active and making huge improvements.” We love to hear our customers say those things, but the Blue Bird organization knows that the only way to escape arrogance and complacency is to keep making improvements every day.

Tell me about the changes you’ve made to the manufacturing processes over the past year.
We are making changes and improvements every day. Most of them are small, common sense improvements that come straight off the shop floor. We are blessed with a talented, experienced and engaged workforce. Other improvements are larger in scale. We combined our rear-engine and forward-engine chassis lines into one line early this year. We moved all of our non-school bus production to the Coachworks facility during 2005. And, we reconfigured our Canadian facility in Brantford, Ontario, into a dedicated small bus (Type A) production location.

Two of your plants — in Lafayette, Ga., and Brantford — were recognized recently in Industry Week’s best plants competition. To what do you attribute their success?
Both locations have great leadership. Kevin Wood in Lafayette and Tony Kerwin in Brantford are dynamic, high energy and extremely committed individuals. Both locations also have great management teams and outstanding workforces. Beyond that, it is mainly a focus on process improvement, including 5S, throughput reduction, delivery performance and, most importantly, quality. Behind everything that is happening at Blue Bird, there is a relentless drive to improve quality.

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You’ve made changes to your dealer network over the past year. How is that transition coming along?
It has been both a tough and beneficial process for us. The dealers that left us in the Midwest and Arizona at the beginning of 2005 represented about 12 percent of our 2004 sales. As we put new distribution in place, we found significant opportunities in those areas to improve customer service and support. We got much closer to our end-users. We also developed a much greater level of appreciation for our loyal Blue Bird distributors.

The Blue Bird Distributor Advisory Council has been re-energized, and I have visited a good number of dealers throughout the year. While the first part of the year was challenging, Blue Bird is a much better company now than before the distributor network changes we experienced in 2005. Our sales volumes will be more than 10 percent higher in 2005 than they were in 2004, and I am looking forward to 2006.

Last year at the National Association of State Directors of Pupil Transportation Services’ annual meeting, you discussed Project Victory. What is the status of that initiative?
Project Victory has moved smoothly into the prototype testing phase. It has not only been a successful project, but one of those efforts that improves teamwork and brings organizations together. We have driven ourselves hard to stay on schedule and not take any shortcuts. The Victory design is being rigorously tested. We are aiming for a flawless introduction. At the moment, we are completing shaker testing, durability testing, roof crush testing, side intrusion testing and the Colorado racking test. Later this year we will have sales demo units on the road. We not only want those units to be completely wrung out design-wise, we want to have the service and parts manuals sitting on the seats. When we put a Blue Bird logo on it, we have to know it’s right.

Beyond Project Victory, are you planning any changes to the product line?
Blue Bird is making significant design improvements to our small bus line (Type A). We will show many of these changes during the National Association for Pupil Transportation trade show in Austin, Texas. Some of the design improvements we have developed in Project Victory are also being migrated into our Vision and All American products. Working with Cummins, we are also getting a big jump on installing 2007 EPA compliant engine packages.

What prompted Blue Bird to enter into the deal with Cummins to supply its ISB engine? Will that have any impact on customers who might prefer the Caterpillar engine?
Cummins has always been a supplier to Blue Bird. In the past few years, we have only offered Cummins in the rear-engine models. Our agreement with Cummins will broaden Cummins engine availability to all our large school bus models. I believe Cummins is a better fit for many of our school bus customers, but Caterpillar makes more sense for some. I think the right thing to do is give our customers a choice.

How do you see the market in 2006 for school bus manufacturers?
I think it will be another good year. School bus volumes will be up slightly. Customer expectations will continue to increase. Quality, consistency and doing what you said you would do will be even more important for manufacturers.

What do you see as the biggest challenges facing school bus manufacturers?
Product quality, service and parts support must get better. School bus customers have greater expectations every year.

If someone asked you why they should buy a Blue Bird instead of one of the other manufacturers’ products, how would you answer them?
I would first want to know about their application and requirements. Of course, I believe Blue Bird builds a better bus, but that only means something to a customer if I can put it in terms of value to that specific requirement. If I am so busy telling someone why a Blue Bird bus is better, I am probably not listening to what they need in their application. If they have any doubts about the difference between a Blue Bird product and someone else’s bus, I would ask them to contact a Blue Bird distributor and make arrangements to drive a Blue Bird bus and compare. Then I would ask them to visit our facilities. They would get a chance to meet the Blue Bird team, see consistent, well organized production processes, and understand the advantages of working with a supplier that listens and performs.