The U.S. commercial vehicle aftermarket is $53.1 billion dollars, according to Dave Fulghum, vice president, MacKay & Co. This figure includes, light-, medium- and heavy-duty trucks as well as construction and agricultural equipment.

Speaking before distributors at Heavy Duty Aftermarket Week, Fulghum talked about the size of the aftermarket, where service work is being performed and where parts are purchased.

In 2006, truck dealers captured 43 percent of aftermarket parts sales, while heavy-duty distributors took 26 percent and independent garages, 13 percent.

According to Fulghum, dealers are not growing their parts and service business, distributors are losing share points and independent garages have more than doubled their share of the business in the last 10 years.

When looking at who specifies the brand of part purchased, he found that more often than not, the truck dealer decides whose brand goes on the truck. Less than a quarter of customers who purchase parts from distributors specify brand, and 11 percent of customers specify brand when purchasing from a repair garage.

The service labor market, according to MacKay, was 484 million labor hours in 2007. Thirty eight percent of that was in preventive maintenance and another 22 percent was in paint and body work. According to Fulghum, fleets are looking to outsource more of their service work. Sixty four percent of survey respondents indicated they would like to outsource their engine overhauls, for example. Some of the reasons cited for the desire to outsource more work include lack of capacity, cost and the technician shortage.

Stu MacKay, president of MacKay and Co., talked next about the opportunities available for distributors in the aftermarket. According to MacKay, there are 27 million Class 8 vehicles in use, 1.7 million Class 6 and 7 trucks and 3.6 million trailers. This translates into a $15.6 billion aftermarket at the retail level.

In addition, 1.6 million trucks are in the hands of the first vehicle owner, while 1.1 million are in the hands of the second or third owner. Used trucks are a $6.9 billion aftermarket opportunity that distributors can take advantage of. Dealers lose 10 share points of the parts and service business between the first and second owner of the vehicle.

By 2011, MacKay predicts there will be 1.7 million trucks in the hands of first owners and another 1.3 million owned by subsequent buyers. By 2016, those numbers could grow to 2 million vehicles being operated by the first owner and 1.6 in the hands of second or third owners.

As a result, MacKay see the potential size of the aftermarket hitting $20.3 billion, measured in today’s dollar.

MacKay asked distributors what things they were most concerned about. Almost 40 percent indicated the economy was a major cause of concern along with things like oil, business operations and personnel.

MacKay suggested that other issues distributors should be aware of include proprietary technology and components, distributor consolidation, over distribution and what he called “white box” products.

Today, according to MacKay, Freightliner and Sterling have 67 percent proprietary power on their vehicles, Volvo has 63 percent, International claims 22 percent, but the introduction of its own big bore engine this year will raise that number.

MacKay says, “This is going to give dealers a bigger edge,” and he predicted that by 2016, truck dealers could have 50 percent share of the aftermarket.

The Commercial Vehicle Solutions Network (CVSN) announced that beginning next year, the association’s annual spring meetings will be held in conjunction with Heavy Duty Aftermarket Week (HDAW). The next HDAW is scheduled for January 21 through January 28, 2008, at The Mirage Hotel and Casino, Las Vegas.

“The committee assigned to consider the various options for the CVSN spring conference did a great job,” says Robyn Spitzke-Kent, executive vice president, Fort Garry Industries and current president of CVSN.

Ken Duval, president, Canadian Wheel and incoming president of CVSN, headed the committee. “While our Fall Annual Business Forum will remain focused on industry initiatives, our spring meeting fits very well into the format of HDAW,” he says. “Everyone involved worked tirelessly toward a solution that both strengthens CVSN and helps HDAW achieve its goal of an all-industry, all-organization, independent heavy-duty aftermarket conference.”

The HDAW leadership team persistently pursued a CVSN partnership in the annual event. By bringing the group into the fold, HDAW leadership hopes to bring distributors, supplies, the media, education and solution providers together in one venue, creating a consolidated, comprehensive annual industry meeting.

“We have held strong HDAW conferences the past two years,” says Jerry Weis, president, Ott’s Friction and HDAW 2008 chairman. “But it’s time to beef-up our lineup by adding many of the real power-players in the heavy-duty aftermarket.”

CVSN members will join the conference in prominent leadership roles. The association will be a sponsor of HDAW 2008, and then will become an organizer in 2009, along with the Heavy Duty Distributors Association and the Heavy Duty Manufacturers Association. HDAW organizers own the event and are responsible for the overall conference and production.

CVSN was formed in 2006 by the merging of the Council of Fleet Specialists and the National Wheel and Rim Association. It is North America’s largest distributor-governed association.

Clevite

MAHLE Clevite has been involved the Heavy Duty aftermarket now for over 50 years and offers a wide range of replacement parts for Heavy Duty engines found in Agriculture, Construction, Trucking, Marine and Oil Field operations.

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Fontaine PartSource

Fontaine Trailer Company builds the best flatbed and lowbed trailers in the world. And now Fontaine PartSource brings that kind of quality and dedication in an aftermarket trailer parts supplier. No “knock- offs” or counterfeit parts; only original equipment design and quality, which will keep your trailers on the road and protect your investment.

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Heavy-duty technology provider Karmak, Inc., has released an update of its Legend business management system. The new software release includes many enhancements for improved management of parts inventory, service, accounting, sales, and lease and rental operations, says the company.

Designed for the heavy-duty truck industry, Legend Version 6.0 also adds new features to Karmak’s ProfitMaster line, including modules for receiving parts orders over Internet, viewing essential data in real-time dashboards, and creating mobile truck repair orders.

The Karmak Legend system provides heavy-duty truck and trailer dealers, parts distributors, service facilities, and lease/rental companies with a complete management system for single or multiple locations.

There are 1001 reasons why fleet managers buy a particular part based on its price, according to Bruce Plaxton, president of BGP Marketing. He chose to focus on four of these reasons-product, vehicle age, fleet size and operational situation-as he moderated a panel comprised of top maintenance executives from four fleets.

There are two categories of parts, predictive and non-predictive. Plaxton contends that the more predictive the part, the more price sensitive the fleet is. With items like filters, coolant, oil and brake shoes, the price of the product is a major determinant for where fleets buy.

Most fleets keep their trailers for seven to nine years, and the parts-buying decisions they make when the trailer is four years old are different than the ones they make when the trailer is eight years old.

Plaxton believes that the larger the fleet the more the fleet manager understands the cost of downtime and its influence on the real cost of a product.

When describing the role price plays depending on the operational situation, Plaxton used the example of a vehicle carrying frozen pizza through the desert in August when the condenser goes out. “Is price an issue,” Plaxton asked?

If the part is a non-predictive part, availability is the key to where fleets buy. “The person with the part on the shelf will get the sale,” he said.

Plaxton next used a real world example of how situation influences a vehicle repair. He said that two vehicles from the same fleet came into a truck stop each with a failed air conditioning system. One of the vehicles was heading east, the other south. The fleet manager made two different decisions. For the truck that was heading east, it authorized a $1300 repair, for the one heading south, the manager authorized a patch so the vehicle could get to a fleet maintenance facility a few hundred miles away.

Plaxton next invited his four panelists to talk about their fleets and the factors that go into their parts purchasing decisions. Steve Duley, vice president of purchasing for Schneider National Inc., manages a fleet of 11,000 tractors, 15,500 trailers and 23,000 containers. The company operates 30 maintenance facilities staffed with 600 technicians. The fleet performs 80 percent of its own tractor and trailer maintenance. It spends $45 million on replacement parts: 64 percent for inventory and 39 percent for repair purposes. Sixty percent of its parts purchases are through OEs, 10 percent through distributors and 30 percent through other sources. About 30 percent of the parts it purchases are proprietary.

When Duley considers a parts purchase, the first thing he looks at is if the part meets the specifications Schneider has set. Service performance, price, nationwide pricing and service, and central order and billing are some of the other things he looks at.
“We seek the best overall value, not just pricing,” Duley says.

Sid Gooch, managing director of vehicle maintenance and support services for FedEx Express, manages a fleet of 83,033 vehicles including ground support vehicles and operates 673 shops with 1659 technicians. There is a corporate organization in place to optimize supply relationships but FedEx Express has the ability to buy parts too.

“We are committed to total cost reduction through supply chain management excellence,” he said.

“We look for quality parts at competitive prices for a lower cost of ownership,” Gooch says.

Carl Lyth, fleet manager, Northwest Ohio and Toledo Divisions of Pepsi Americas, is responsible for 12,082 assets and 49 technicians operating out of 16 locations.

“Cost is the key to open the door. However, quality and support are the final determining factors,” he says.

Lyth expects its parts suppliers to demonstrate to him why their part is more reliable. “We keep our equipment a long time, so aftermarket parts are a viable option for us. We can’t always go to the OE for the second half of the vehicle’s life.”

He added, “We look for longevity. We don’t want a supplier who builds itself on price and then prices itself out of the market.”

He says he is not afraid to look at innovation even though he likes time-tested parts.
Kevin Tomlinson, director of maintenance for South Shore Transportation has a fleet of 200 tractors and 450 trailers that are primarily flatbeds carrying home building supplies.

Tomlinson mostly buys OE parts. “We buy branded parts. We can’t afford to have a truck go down because of a product malfunction.”

Tomlinson is not comfortable using unproven parts. He also does not carry a large parts inventory because he can get most of what he needs within a day.

Plaxton asked panel members how they decided to buy a branded product vs. a private label product. Duley says that he checks out the quality of the price, speaks to others who have used the product and then considers price. “Quality and availability have to be there. If the part is a critical one we put a lot of effort into this process.”

Lyth says he looks at what big fleets are doing to help guide him in his purchasing choices. “I do not like to lead the parade. Being the leader, you can get hit by the bugs.”

When Gooch is considering adding a part, he first tries it in a limited number of locations and monitors its performance.

Both novice and experienced technicians soon can gain expertise from the new, all-inclusive Brake Training School from Bendix Commercial Vehicle Systesm LLC, says the company.

The brake training school-conducted by the veteran, ASE-certified Bendix Service, Warranty and Training (SWAT) team-combines the former Bendix air brake and foundation brake training schools into one course. The course teaches technicians about description, operation and service elements for the total range of components found within dual air brake systems, says the company.

The brake training curriculum includes: Fundamentals of compressed air; tactics for air system failure mode diagnosis and troubleshooting; air brake system and foundation brake components, including air compressors, valves, foundation drum brake and air disc brakes, slack adjusters, brake chambers, shoes and drums.

Additional topics covered include, antilock braking systems and stability technologies. Various class exercises with hands-on activities are provided and participants receive a comprehensive workbook.

This year’s Bendix Brake Training School kicks off on March 11, in Springdale, Ariz. The course will be offered in almost 20 cities across the U.S. A full listing of locations and dates can be found at www.bendix.com.

Last October, BorgWarner Turbo & Emissions Systems conducted two On-The-Spot (OTS) warranty sessions for its aftermarket distributors. The hands-on sessions were conducted over a two-day period at BorgWarner’s turbo reman facility in Fletcher, N.C., with 29 representatives from more than 20 independent aftermarket distributors completing the course. They join more than 200 individuals who have been certified in OTS warranty resolution during the more than 20 years that BorgWarner has offered the program to its distributors.

The primary focus of the warranty program is to help distributors of BorgWarner products enhance their service offering by allowing them to analyze and process BorgWarner warranty hardware at their places of business. By resolving warranty issues “on-the-spot” BorgWarner distributors can offer their customers a clear idea of service or replacement options, says the company.

A geographic list of the company’s service partners can be accessed by visiting the company’s website www.turbodriven.com.

AxleTech International received an order to supply axles for BAE Systems’ RG33 6×6 Category II all-wheel-drive Mine Resistant Ambush Protected (MRAP) Vehicles. The 600-vehicle award for MRAP vehicles, when combined with previous MRAP axle contracts, brings the total value of AxleTech’s MRAP contracts to $70 million, says the company.

This new award from BAE Systems to supply its survivability-enhanced RG33 vehicles will use AxleTech’s upgraded 5000 Series 5G high-speed planetary axles. These axles have been designed and constructed with high impact resistant and energy absorbing materials. The design offers increased payload capacity for heavier, up-armored requirements and is capable of withstanding the high dynamic shock loads of the MRAP combat application, according to the company.

SKF released its all-in-one rebuild kit for PreSet hub assemblies. Each rebuild kit contains everything needed for servicing PreSet hub assemblies, including two specific and tightly tolerance half stand tapered bearing sets, an SKF Scotseal PlusXL wheel seal, an SKF TF hubcap (when applicable) and a precision machined PreSet bearing spacer.

ConMet introduced the PreSet hub assembly in 1995. In 2002, the SKF Scotseal PlusXL became the OE standard in the hub assemblies. Beginning in 2007, ConMet approved SKF specially toleranced tapered bearing sets for installation in its PreSet wheel end product line.

By installing the rebuild kit for PreSet, the hub assembly components receive an extended 3-year warranty from SKF.

What do you need to do to improve your business? According to Dr. Clint Longnecker, professor at the University of Toledo and author of Two-Minute Drill: Imperatives for Rapid Organizational Change, you need to use the same thinking applied by football teams when they execute two minute drills during critical games.

Most organizational change takes time and Longnecker says that it is time to think about change as a two-minute drill. “Any change worth making, is worth making faster,” he says.

There are a number of factors that make two-minute drills successful. These include great quarterbacks (leaders), a desire not to lose a sense of urgency, exploiting your opponent’s weakness, great individual effort and teamwork.

Longnecker suggests that the assumptions you have about change may not be true and that you need to understand what factors get in the way of change.

The first step to making change is to develop a plan. “Only 45 percent of the organizations we surveyed have improvement processes in place,” he says. But he cautions that having a process in place does not mean it is used, used well or used quickly.

No matter which type of improvement plan you decide to use make sure it contains the following steps: Problem identification, data collection and analysis, benchmarking and gap analysis, brainstorming, action plan, execution, measurement and follow up and adjustment.

“The quicker you get through the change process, the more energy you will have to implement the plan,” he says. Longnecker believes people spend too much time on the front end of the process and then lose energy for the implementation steps.

Longnecker’s research found that change efforts fail when they lack a clear focus, effective leadership, knowledge of the opposition, a sense of urgency, a game plan, the proper people, proper execution, performance measurement and feedback.

A key factor to the success of a change plan is strong leadership. Longnecker suggested that distributors ask themselves why would someone want to follow them. People need to believe that a leader knows what he is doing and can be trusted to take the organization where it needs to go.

Leaders need the following characteristics if they are going to be able to help their organizations change: be energetic, seize control, communicate, create ownership, demonstrate time management, make adjustments when things are not working, encourage team members and be confident.