PARTNERING FOR PARTS

Trucking suppliers from OEMs down the line to component and subsystem suppliers are always hot to serve the lucrative aftermarket for truck parts and services. As essential as parts are to keeping trucks rolling, they are a valuable and steady revenue source for suppliers not to mention a channel for remaining in touch with customers between major equipment purchases. What is news is the greater willingness

Trucking suppliers from OEMs down the line to component and subsystem suppliers are always hot to serve the lucrative aftermarket for truck parts and services.

As essential as parts are to keeping trucks rolling, they are a valuable and steady revenue source for suppliers — not to mention a channel for remaining in touch with customers between major equipment purchases.

What is news is the greater willingness of suppliers to deploy advanced information technology to further lift the burden of managing parts off fleet managers while at the same time increasing their parts and service sales.

All this assistance comes in various forms. In many cases, thanks to their built-in IT prowess, suppliers are providing a higher degree of no-extra-cost “value-added” service to fleets, which may not even be aware they are benefiting.

But there are also opportunities for fleets of all sizes to more directly leverage the IT power of suppliers by being willing to pay separately for stand-alone fleet management systems — offered on all-makes/all-models platforms — that only the largest fleets could hope to create and put into place on their own.

In the case of truck OEMs, these pay-to-use systems may be provided in partnership with participating authorized truck dealers and present offerings scaled to various fleet sizes. In addition, at least one major component supplier offers a fleet-management system as a distinct product line.

According to Todd Kindem, director of sales & marketing for the ArvinMeritor Commercial Vehicle Aftermarket (CVA) business, the component supplier's XpresswayPlus.com web site is a “one-stop aftermarket shopping solution for truck dealers, warehouse distributors and other parts outlets that ultimately also benefits their end-user customers.”

He says registered site users can obtain product price and availability, place orders, check order status, print invoices and track shipments while a complete and up-to-date online aftermarket parts catalog can be viewed by all site visitors.

“Using customer account numbers,” Kindem explains, “we can basically transmit parts orders and other information ‘live,’ thanks to this web-based system. The business connection occurs behind a firewall, but anyone can access the front end as an electronic parts catalog.”

Doug Dole, senior director-worldwide operations for ArvinMeritor CVA, points out that in addition to having the parts path smoothed by XpresswayPlus.com, a distributor can benefit its end-user customers by signing up for the manufacturer's value-added Vendor Managed Inventory (VMI) program that is run by an “invisible third party that's expert at forecasting” parts usage.

According to Kindem, IT is also being brought to bear to make ArvinMeritor's aftermarket customer-care centers more responsive. He says the goal now is achieving first-call resolution — answering customers' calls within 20 seconds — and if follow-up is required, resolution that takes place within 24 hours. “We understand our customers need and deserve quick and accurate answers,” he notes.

Dole says he's looking ahead to when parts suppliers can get “visibility at the point of sale,” that is, right from when a part is required by a fleet. “That way we'd get a ‘preview’ as parts come off the shelf, and that would help us smooth demand out throughout the entire supply chain. We don't know at this point if that is something [the industry] will have in five years or longer. We do know smoothing the flow of parts will reduce costs.”

LAYERED APPROACH

Paccar, parent of both Kenworth and Peterbilt, was an early convert to leveraging IT resources to go well beyond enhancing back-office functionality. Ten years ago it released an online-based fleet management system — branded PremierCare Connect when offered by Kenworth and its dealers and as TruckCare Connect when provided by Peterbilt and its dealers.

The web-based management system allows a direct connection to a KW or Pete dealership and includes such features as automatic reordering when parts fall below fleet-set levels. That amounts to a low-cost way to outsource parts management — and let a dealer carry most of the inventory cost.

In addition, the system can generate reports on parts inventory and parts usage by work order or vehicle, giving fleet managers much greater visibility into their parts and overall maintenance operations. These systems are now offered in four distinct packages, enabling fleets to pick the amount of functionality they need and are willing to pay for.

“At the highest level, the fleet is getting a full enterprise system that can manage everything from work orders to PM scheduling in one package,” points out John Wisdom, director of customer assistance for Paccar Parts.

On the other end of the scale, he says a brand-new “express” program that was rolled out in January differs from the usual OEM Internet parts ordering systems by being a “universal” ordering system that can seek parts from any supplier.

“Our program also has such bonus features as warranty tracking and the ability to check out parts to a specific vehicle,” says Wisdom. “It does not provide inventory, work order or PM management as the ‘higher’ systems do, but we plan on adding on those modules by the second quarter of this year.

“The sponsoring Kenworth or Peterbilt dealer will set the customer up with the system and provide the web training, which takes about half an hour,” Wisdom continues. “There's a flat yearly fee for this system, as well as the others we offer. The express version will pay for itself in a year if a fleet uses it on a daily basis and with the warranty-tracking feature turned on,” he adds.

Wisdom notes the more elaborate versions of the two Connect offerings have a “variety of options for managing parts inventory that work much like a dealer business system: parts can be checked out with a bar-code reader, and reordering can be set by minimum/maximum levels or based on parts tied to work orders.”

He points out that the express parts-ordering system was designed with fleets that run from roughly 10 to 50 tractors in mind. “Above that level,” he remarks, “they probably should be managing their shop operations with a full suite of management tools.”

CALLING AHEAD

Eaton is another trucking supplier that has moved beyond improving parts processing internally to also offer fleet-management tools in its case as a separate product line.

“Our Fleet Resource Manager [FRM] system uses telematics to report what is happening on a vehicle so that service can be scheduled, and that, of course, determines what parts are needed when by the repair shop,” points out Phil Warmbier, marketing manager for Eaton's Vehicle Solutions business unit.

Warmbier says this still means parts acquisition is handled as a separate issue from scheduling PMs and repairs unless they are tied together by fleets' back-office systems.

“However, looking a little further down the road,” he says, “we are looking at using VMRS codes to tie these two actions together [in one system]. All vehicles already collect fault codes so the idea would be to use telematics to also ensure the needed parts are available where the truck is headed or send the truck to where the parts are.”

Warmbier figures that even though this would require tying “almost two separate front-end systems plus back-end systems together, it is how you will realize the most cost savings for fleets themselves. Certainly, it will end up cheaper than what it costs to tow trucks and expedite parts today.”

Summing up the state of things from Eaton's perspective, Warmbier says that right now “the parts piece is not part of FRM, it's part of shop systems. So the next step as we see it is to have systems like ours interface with parts management systems.

“The issue is there are some 200 providers in this arena,” he continues, “and many different approaches being taken. The good news is VMRS codes are becoming more standardized, which makes them easier [for software engineers] to work with. All this is on the road map, but it is challenging for providers.”

JOINING SILOS

Decisiv Inc. is an implementer of IT solutions for truck services, albeit no household name among fleet owners.

According to company president Dick Hyatt, Decisiv works with major OEMs — including Volvo, Mack, International and Freightliner — on a private-label basis to supply them with IT solutions that amount to what he calls a web-based “service management platform.” It's designed to form a bridge between truck and component manufacturers, dealers and other service locations, and fleets that delivers “information needed to make more informed and timely service management decisions.”

Hyatt says Decisiv “pulls together historically separate silos of information with advanced technology and unparalleled access to critical service information from source providers. Our platform responds by delivering real-time integration and access to vehicle-specific information including part numbers, fleet-specific part pricing, in-service dates, etc.”

According to Hyatt, the MV Preferred parts-and-service management program offered to Volvo and Mack customers via their respective dealerships is a very evolved version of what Decisiv offers in various forms to OEM dealers, independent shops and even directly to fleets.

“All OEMs now have programs like MV Preferred,” Hyatt states. “And most, if not all, fleets have pre-negotiated [national account] parts pricing in place — a basket of prices, if you will — that is honored anywhere in the given OEM's dealer network. But the second part of what MV Preferred does is allow the dealer to route a service charge through and direct-bill the fleet customer.

“What we've done,” continues Hyatt, “is build a web-based service management platform designed for front-end service initiation at the dealer. The goal is to greatly increase workflow at the dealer — cutting the writing of estimates down to three to five minutes. This is enabled by having intelligent access to information instead of having it ‘siloed’ away.” In a nutshell, he explains it as “navigating different systems” to break down silo walls.

Hyatt states that accessing the vehicle serial number at the transaction's outset means an exact parts price “to the penny” — based on their national account agreement — as well as the agreed upon labor rate can be given to the customer right at the point of sale.

“The system is delivering a very accurate cost to the customer each time at the front end — so no one has to negotiate costs at the back end,” Hyatt remarks. “And all told, the fleet might save two to four hours of downtime in one instance.”

As Hyatt sees it, what Decisiv has to offer is a “very integrative approach” to driving costs out and customer satisfaction up in the parts and service realm. But besides software, he says it also requires a “total mind-set change” about how communications can benefit all parties.

“As a service location is building a repair estimate, it can be placed in a ‘portal’ we've created within the Mack and Volvo system that enables the dealer and the fleet to interact about the repair. This way other work and parts can be added to the ticket via email and no one has to play telephone tag either. You're working with enhanced communications in real time.”

Indeed, it's a win-win approach benefiting fleets, service providers and manufacturers when IT delivers on the promise to boost efficiency and drive down costs up and down the parts supply chain.

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