The heavy-duty aftermarket is hardly known as a bastion of innovation. By its very nature, the business is reactive: when a component breaks down it must be repaired or replaced.
The mechanic or truck owner checks his stock to see if he has the materials he needs and, if he doesn't, calls a distributor.
The process is the same whether you have a broken truck or covered wagon.
Where is innovation in the heavy-duty aftermarket?
It's in the execution.
"We deal with more than 240 different suppliers across a range of product categories-from anti-lock brakes to water pumps," said John Minor, Vice President and COO, Midwest Wheel Companies, in Des Moines, Iowa. "They all supply good products and, for the most part, they do a good job with order fulfillment and product support. What separates the best suppliers is their ability to do all of these things consistently. Someone may have a great product but they can't get it to us on time. Or they may have a great salesman but the parts arriving at our dock don't match up with what he promised.
"We know a supplier is committed to us as a distributor and to the aftermarket as a whole when they deliver great products, on time, all the time. We don't have to question whether they're going to come through. We can say to our customer, 'It's a great product, the supplier backs it up, and it'll be here when they need it'."
With customers raising their expectations for performance and value, distributors are gravitating to suppliers who consistently come through with the broadest possible selection of products, a rock-solid order fulfillment process that includes technologies like vendor managed inventory and EDI, and, when necessary, help from smart, experienced human beings.
Is it too much to expect?
"For a component supplier, the commercial vehicle aftermarket is vastly different from the original-equipment side of the business," said Terry Livingston, general manager-Americas, for ArvinMeritor Commercial Vehicle Aftermarket (CVA).
On the original-equipment side of commercial vehicle manufacturing, heavy-duty component suppliers have a deep understanding of their customers' processes, technologies, and plans. They're involved with demand forecasts, changes in product designs, and requirements for component quality and price.
It's a great position to be in, particularly when you're the preferred or standard supplier for a truck or trailer manufacturer. With a quantity and a due-date in hand, you can get to work building products and generating revenue.
The commercial vehicle aftermarket offers no such assurances.
Once a truck or trailer is in the field, it's tough to predict when components will need to be replaced. Different vehicle owners can operate the same make and model yet have wildly different needs depending on how the vehicle is used and maintained. Warranties, service agreements, geography, and urgency influence who performs the work, where parts are sourced, and at what cost.
While the nature of the demand for aftermarket parts is unpredictable, Livingston said, the required response is almost always ASAP. Keeping up requires all kinds of resources that OE suppliers don't have to contend with: more SKUs; more people for the call centers and field support; distribution infrastructure; information systems; and reverse logistics to handle the return, repair, and disposal of failed components.
Today, these challenges are compounded by three factors:
First, truck and trailer owners are holding on to equipment longer, with the average age of a commercial truck approaching nine years. Dealers and distributors are looking for products that will appeal to cost-conscious customers, including all-makes parts and remanufactured components. They're trying to sort through the increasing number of available parts sources, including suppliers they've never heard of before.
Second, the shortage of qualified technicians continues. The U.S. Dept. of Labor estimates that 205,000 diesel technicians will be needed between now and 2014 to fill new jobs and replace workers exiting the field, many through retirement. Currently, vocational programs in the United States graduate about 35,000 technicians per year, including auto, collision, and diesel mechanics. This dearth of trained technicians is a potential threat to shop productivity and, ultimately, the volume of parts and service business.
Third, when demand for new trucks rises at the same time as demand for aftermarket parts, the predicable result is a tug-of-war. Suppliers who aren't firmly entrenched in the aftermarket will channel their resources to their customers on the OE side, creating a shortage of service parts for their components.
At the same time, we will see that committed aftermarket suppliers have been strengthening their product portfolios and enhancing customer service and support. We're seeing daylight separating organizations that invest in the commercial vehicle aftermarket and those who view it as a place to cut costs.
The management team at the company's Commercial Vehicle Aftermarket business has identified three areas where this separation is clear:1. The Broadest Possible Choice of Products
Aftermarket parts distributors will need a complete portfolio of products in order to capitalize on a growing number of potential customers with speed and efficiency.
Ideally, you want to focus on giving the customer what he wants instead of having to calculate in the back of your head, "Who am I going to call for that?" For example, if a truck owner or repair shop needs brake hardware, you'd like to offer a choice of linings and brake kits for his vehicle and vocation-and the ability to confirm price and availability from a single aftermarket supplier.
Increasingly, it's important to align with aftermarket suppliers who go beyond providing replacements for their own OE products. This includes a range of quality and price points, including genuine parts, all-makes parts, and remanufactured components.
In the case of ArvinMeritor Commercial Vehicle Aftermarket (CVA), it doesn't only manufacture and supply products for the aftermarket, it develops and engineers them. One example: the company's PlatinumShield coating was developed to protect against corrosion and rust-jacking on remanufactured Meritor brake shoes.
One marketing director said the investment and resources in ArvinMeritor's OE business allowed CVA access to the necessary testing, engineering, and laboratory resources for a project of this scope. How many aftermarket businesses have an in-house metallurgy laboratory? But it is the scope of its brake remanufacturing business that allowed CVA to make the investment necessary to develop and implement the PlatinumShield coating at its Plainfield, Ind., remanufacturing facility. (Todd Kindem, senior director of sales and customer care at ArvinMeritor CVA). The PlatinumShield coating has performed as promised and will soon be available on its OE side of the business."2. Seamless Fulfillment
At ArvinMeritor, roughly 80 percent of orders are placed through its Xpresswayplus.com e-commerce site, which allows up-to-date views on product availability, pricing, and delivery status. It also provides dealers and independent shops alike with equal access to general service and repair information for ArvinMeritor products. Xpresswayplus.com is part of a suite of electronic services-including EDI and vendor managed inventory (VMI) - to make sure dealers are stocked efficiently.
Most aftermarket suppliers offer some form of online ordering. The key to fast response and customer satisfaction, however, involves the basics: the supplier's ability to physically pick-pack-and-ship, and to strategically stockpile products within its distribution network.
One recent example is the company's Mascot Truck Parts business. When ArvinMeritor acquired Masc