Every aspect of trucking was affected by the COVID-19 pandemic. That includes the truck parts aftermarket, which had to make adjustments so fleets had access to parts and to maintenance and repair information while keeping em-ployees and customers safe.
Before the pandemic hit, this year was shaping up to be flat from a freight perspective, according to Avery Vise, vice president of trucking for industry forecasting firm FTR.
An average year was also what FTR was predicting for Class 8 equipment sales, according to Don Ake, vice presi-dent, commercial vehicles. “We anticipated the market would be at replacement level for 2020. When the economy fell apart, the forecast for new equipment went down 36%.”
Fleets largely paused buying new trucks, focusing on keeping their current fleet up and running.
We talked to several parts and service companies to learn how they have helped fleets keep trucks moving through the pandemic, and what changes may be long-term.
Keeping the Parts Flowing
Keeping parts on shelves and available for fleets was one of the first challenges the aftermarket faced, as many manufacturing plants had to shut down during the COVID-19 stay-at-home phase. Here are a few examples of what manufacturers and suppliers did to keep parts flowing.
Uptime parts: Both Navistar and Volvo Trucks North America took steps to ensure that their dealers had plenty of parts on hand. “We concentrated on parts that keep a truck running where the repair can be done in four hours or less,” says Todd Shakespeare, director of parts marketing at Volvo Trucks North America.
Josef Kory, senior vice president of parts, Navistar, says, “We did some targeted inventory, pulling from suppliers where we thought there was risk of shortages. We made sure to carry some extra safety stock on those parts.”
Communication: “We had strong communication repetitively throughout the entire supply chain — whether that was upstream to our top tier suppliers or downstream to our dealers and customers,” Shakespeare says. “We had good communication flow from the beginning of the crisis that is continuing today.”
Production facilities: Phillips Industries shut down operations for seven days in order to completely reconfigure its manufacturing facilities worldwide.
“We looked at everything, from the way our employees enter the facilities, changing the way they clock in and the way they work on the production line,” says Rob Phillips, president and CEO.
Plexiglass was added between each workstation, and every hour production stops for five minutes in order to clean everything within 10 to 15 feet of every operator.
When it came to order management, Phillips says, “There were normal orders and then there were what we are calling ‘toilet paper orders’ — customers who placed massive orders.” He says the company was very careful not to just build and ship, but instead worked with the customers that had placed larger orders to schedule shipments over a longer period of time.
Technology: “We used a lot of existing tools for data visualization, dashboards and data portals so we could get real-time information from one side of the company to the other and really understand what was happening,” says Aaron Bickford, vice president North American aftermarket, Meritor. “We determined what the implication would be for the customers and immediately had people work on mitigation strategies. Throughout this entire process, we have had improvements to key customer metrics like order fill rate.”
Online ordering: Many suppliers saw upticks in ordering via the e-commerce platforms of their dealers and distributors. Existing e-commerce parts providers saw orders increase. Dave Seewack, founder and CEO of FindItParts, says his company saw record sales in the first quarter. “I think [the pandemic] is opening peoples’ eyes and they are open to doing things differently.” He says the company saw an increase in new customers as well as in order count and revenue. However, he says, “we did not see anything like hoarding of parts.”
Having the right parts is only part of the equation for keeping trucks on the road. Ensuring that fleets and outside service providers have the troubleshooting and repair information they need also is critical. Here’s how the companies we talked to made this happen.
Existing resources: “Luckily the majority of that information was available online in our Impact Catalog, which dealers and customers can access for not only parts but also service procedures, wiring schematics, etc.,” Volvo’ s Shakespeare says.
Transparency into repairs: Kory says Navistar made its International 360 system available free to fleets for six months. “It is a tool that allows fleets to monitor their trucks and their repairs remotely, to connect to our cataloging and our e-commerce system, to diagnostics, to our fault code action plan — all things that can help them to both manage repairs internally and communicate with dealers remotely.”
Online training: Over the past several years, Bickford says, Meritor has focused its resources on its training capabilities. “We tried to build a balance with regional training, on-demand training and virtual training.” Prior to COVID-19, the take rate on the virtual training was not as high as the company would have liked, but the pandemic has changed that. “I was on a call recently where finance people said they have seen five to 10 years’ worth of growth in digital banking occur in two months. I think we have seen the same with our virtual training.”
New ways to communicate: “It was not appropriate for our sales force and technical advisors to be calling on customers in person. Frankly, those customers did not want to see them,” says Tim Bauer, vice president, aftermarket, North America at Eaton. The company had to determine how to leverage technology to make sure its people — who were now providing support via phone or online meeting programs — had access to the information and data they needed to help customers.
Lessons for the Future
As the economy begins to return to “normal,” many aftermarket companies are taking lessons learned from these COVID-19-induced changes and incorporating them into their day-to-day operations.
Find balance: “We have to figure out the right balance for the customer and for the company in terms of electronic vs. face-to-face communication,” Eaton’s Bauer says.
Embrace technology: “One of the lessons learned is where those areas of opportunity exist to use the technology to not only help the fleets self-diagnose but to deliver training, information and knowledge,” Bauer says.
Be flexible: “We have had to be very fluid, because we had to move labor from one part of the operation to the other in a much more dynamic way,” Meritor’s Bickford says. “Operational flexibility, and the ability to manage much more dynamically, is something we have learned to do and have gotten much better at.”
Don’t go backward: “Everything we have done is 100% here to stay. We have had our eyes opened to just how unaware we have been about the spread of diseases and viruses,” Phillips says.
Better management of the supply chain: “The increased scrutiny and ability to monitor key parts for uptime is something we will take forward with us. It allows us to ensure that we have better parts availability both on our shelves and on our dealers’ shelves to support our customers,” Navistar’s Kory says.
Have the right mix of products: Dealers and distributors will be paying even more attention to having the right mix of parts on hand and determining the correct level of safety stock to carry in case there is any kind of a supply chain disruption. “Specifically, around uptime parts, it is better to have a little extra inventory,” Shakespeare says.
Diversify the supply base: “A globally diverse supply base is important,” says Kory. “It allows us to not have all our eggs in one basket in terms of suppliers. We may also consider more dual sourcing of parts in the future to ensure that a certain region or a certain supplier can’t shut down the supply chain entirely.”
Always be prepared: “You can’t take things for granted,” Shakespeare says. “Always be prepared for what could be. Make sure that your suppliers are strong and that they are financially healthy.”
When Will it Get Better?
“I do not think there will be a very clearly defined post-COVID market, because at the minimum the direct effects of this will not be over for 36 months,” says Bill Wade, managing partner, Wade & Partners. He has concerns about a big spike in new COVID- 19 cases this fall. “If you didn’t know what you were doing for the first [wave], how are you going to know what to do for the second one?”