Going with the flow

Supply and demand is a proven part of our free enterprise economy. As supply dwindles or demand increases, price usually escalates. Price increases can be frustrating if they aren't accompanied by improved product performance. But fleets really suffer when they can't get the parts they need to replace worn or damaged components regardless of cost. Their ability to maintain uptime standards is crippled

Supply and demand is a proven part of our free enterprise economy. As supply dwindles or demand increases, price usually escalates. Price increases can be frustrating if they aren't accompanied by improved product performance. But fleets really suffer when they can't get the parts they need to replace worn or damaged components — regardless of cost. Their ability to maintain uptime standards is crippled and freight delivery schedules are impaired.

Temporary shortages of products such as anti-freeze, wheels, tires, axles, and brakes have become more common over the past several decades. These shortages can be a supplier's worst nightmare, in spite of the fact that they're selling all they can make. Most first-tier component suppliers service OEMs using direct sales and shipping programs. Typically, products move directly from manufacturing plants or are stored in warehouses near the OEM plants. Emphasis is placed on consistent supply to ensure that truck and trailer production lines don't shut down due to lack of components.

Aftermarket supply lines typically involve local servicing, dealers and multi-tiered distribution channels. They are generally more complex, costly and subject to disruption when OEM demand escalates.

Many industry gurus are predicting a strong surge in new-truck build rates from mid-2004 through at least 2005 or 2006. Fleet managers should not overlook the effect this could have on aftermarket availability of essential components, such as tires.

To eliminate costly excess capacity, most component suppliers have worked diligently to match manufacturing capacity to overall industry demand. This strategy serves the industry well in terms of efficiency and cost containment, but it can also create temporary shortages when market demand changes rapidly.

Let's explore some steps fleet managers can take to make sure they have an adequate supply of desirable replacement components. Factors that make a product “desirable” include the following:

  • Brands/models with known and acceptable performance levels;

  • Components from manufacturers and/or suppliers with whom you have an existing relationship;

  • Usage compatibility with your first-choice brands/models;

  • Warranty and pricing comparable to your preferred components;

  • Components that will move through your system, e.g., retreading, rotation, repair, disposal — with minimal disruption.



Many of these issues cannot be addressed on a moment's notice. Normal product development cycles may result in alternate suppliers having newer products that you're not familiar with. Paying attention to information about new products is worth your time over the long run.

Alternate suppliers may also have very different geographic availability of parts for on-the-road purchases. Warranty terms and procedures may be different. Since some suppliers offer both first-line and second-line product models, it might be more expedient to purchase a second-line product from an existing supplier than to demand another brand from a new supplier.

And don't expect products from different suppliers to perform equally. Surprises, both pleasant and unpleasant, may await managers who fail to research product performance and prioritize their alternatives.

The bottom line is to get reliable information. Fortunately, our industry has many reputable suppliers more than willing to help fleets make informed decisions. Taking the time and initiative to ask them the right questions is a good place to start.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish