After two years of growth, things still look good for the aftermarket. There are plenty of opportunities, however there are a few potential obstacles.

Last year proved to be a fairly good one for most heavy-duty distributors, dealers and repair garages. In fact, 93 percent of Truck Parts & Service readers responding to a December 2011 survey say they expected to be profitable in 2011.

Part of the reason most aftermarket firms did well is that “the average age of heavy-duty trucks on the road has crept up over the past few years, and many pre-2007 vehicles are beginning to hit their prime years for major component replacement and repairs,” says Tim Kraus, president of the Heavy Duty Manufacturers Association.

He adds, “Mileage on trucks causes parts to wear and those parts need to be replaced, or the truck is replaced.” In 2011 many fleets chose to do repairs rather than replace their vehicles.

As a result, Kraus says HDMA members saw a 10 to 15 percent increase in their aftermarket sales.

Vehicle utilization rates also were up, according to Tom Otter, vice president of OE sales, Bendix Commercial Vehicle Systems. “As utilization rates go up, there is going to be the need for replacement components in the marketplace.”

Do you expect to finish 2011 profitable?

However, according to VIPAR Heavy Duty’s CEO Steve Crowley, there was some regional weakness. “Construction-based economies like Florida, Arizona and Nevada, especially Las Vegas, have been hurt by the lack of development.”

Bill Wade, partner, Wade & Partners, concurs. “I talk to as many guys who say, ‘We had the best October ever’ as I do to guys who say ‘Our October was a disaster.’ Looking into that further, what comes out is the entirely local nature of the heavy-duty parts distribution business.”

Positioned Well For 2012

Don Purcell, partner, Stone Truck Parts, believes distributors are facing 2012 with “more optimism and with our eyes on the ever-changing customer base.”

How did your company's normal parts inventory change in 2011? -- Gray -- Normal inventory levels have dropped, Blue -- Normal inventory levels have not changed, Red -- Normal inventory levels have risen

Don Reimondo, CEO of HDA Truck Pride, expects solid growth in 2012 of five to six points. “We are anticipating GDP to be 2.5 to 3 percent and that consumption will grow another 2.5 to 3 percent.”

The age of the truck fleets is one of the reasons Terry Livingston, Meritor’s general manager, aftermarket for the U.S. and Canada, sees distributors and repair garages well-positioned for success in 2012.

“They are very well set to get that second and third generation vehicle owner,” he says. “As long as they are able to pass along commodity price increases and keep their margins up, they should do well.”

Surviving the recent recession has left distributors strong, according to Tina Alread, director of sales and marketing for HDA Truck Pride. “Those who survived came out stronger. They have more efficient operations and have figured out how to do things differently,” she says.

“The folks who survived are on very solid ground going forward. They have learned how to either expand the services or products they supply or hold their margins,” she adds.

But it is still a buyer’s market, says Dave McCleave, director of aftermarket/technical services for Hendrickson International. “If you go back a few years fleets were saying ‘I don’t care what it takes, get me going.’ Today it is their marketplace and they can pick and choose who they do business with, so there is still going to be some pressure on margins.”

Opportunities Abound

The recurrence of the technician shortage may bode well for the service side of the aftermarket, according to Purcell. “Fleets are not looking to set up repair and service facilities especially with it getting harder to find service technicians.”

How did your company's employment levels change in 2011? Gray -- reduced personnel, Blue -- No net change in personnel levels, Red -- Added personnel

Livingston says Meritor has seen a trend of more fleets outsourcing their service work and not adding technicians. “This is a strategic opportunity for the independent service garage and warehouse distributors who offer repair to talk to fleets about outsourcing.”

For distributors adding some kind of repair service to their operation can be a way to grow. For service operations having locations close to fleets can be a bonus. According to Stu MacKay, president, MacKay & Co., a recent study of 1,500 fleets indicated they want to spend less time or drive fewer miles to get service work done.

“The limit used to be about one hour for paint and body and engine overhaul,” he says. But MacKay’s most recent fleet survey shows a 20 percent reduction in that figure. “Fleets are looking for more readily accessible, closer and easier to get to service points,” he says.

Technology also brings some opportunities to the market, according to Bill Gryzenia, vice president, aftermarket for Dana Corp. “The distributors, even the small and medium-sized companies, who are customers of Dana are starting to explore e-commerce opportunities.”

He says they are doing this as they look for ways to compete with bigger companies. “I think we are going to see interesting things happen with regard to e-commerce in the coming year.”

Duff Bell, software applications specialist at Karmak, says his company is seeing a lot of its customers move in the direction of parts sales over the Internet.

“If you can make it easier for customers to buy parts from you without calling in and waiting on hold, if you can make it so they just go click, click, click, you can make a sale before your competitor even knows there was a sale to be made.”

Taking a close look at basic aspects of their business also can yield some benefits. According to Bell, a distributor’s inventory strategy is one area that can be improved.

“Distributors need to look at their turn and earn report, which is just shorthand for gross margin return on inventory,” he says.

“The distributor needs to find out that for every dollar he invested in a company did he get $1 back or did he get $1.10 or did he only get 90 cents?” Bell says.

McCleave says distributors who have the proper inventory are positioned best. “Inventory was king during the downturn and that is even more true now,” he says.

“Everyone wants to makes cuts and get their working capital back out of inventory and put it into cash. The people with parts on the shelves are the ones who will win,” he adds.

It is not often in the trucking industry that regulation provides an opportunity; however CSA may do just that. “CSA could present opportunities for more maintenance activity to ensure the vehicles are in compliance from a safety standpoint,” Otter says.

Another way to grow is to branch into ancillary businesses.

“There are guys out there who have figured out that the standard approach is not going to work,” Wade says, citing Midwest Wheel as one company that has taken an alternate route to growth by building a significant business in light-truck accessories.

He says the company realized that many of its customers used pickup trucks when coming to the distributorship to pick up parts, so it added items like tool boxes, bed liners, running boards and auxiliary lighting to its product mix.

Beware Of Lurking Threats

While most industry experts expect 2012 to be a good year, there are a few areas that are causing some concern.

The growth of large fleets may be troubling to many independents, Kraus says. “The independent’s typical sweet spot is with the smaller fleets and owner-operators,” he says.

“While the growth in the number of large fleets is troubling, the number of small fleets still is a substantial percentage of vehicles on the road.”

The uncertainty of economic activity and government regulation may be preventing expansion by a lot of small distribution businesses, not just independent truck parts distributors, Crowley says.

During 2011, which of the following actions did your business take? Blue -- We have not made nor are planning any changes in locations, Red -- We have expanded locations, Purple -- We are examining an expansion of locations, Brown -- We are examining a reduction of locations, Gray -- We have reduced locations --- Blue -- We have expanded product lines, Red -- We have not made nor are planning any changes in product lines, Purple --We are examining an expansion of product lines, Brown -- We have reduced product lines, Gray -- We are examining a reduction of product lines

“There is hardly a week that goes by that something is not popping up in some form of regulation — either on the customer base or on small business — or there is the threat of a new tax. This really keeps people’s money in the bank,” he says.

Crowley believes there are opportunities for expansion, but that everyone is approaching them cautiously.

There also is some concern over the economic situation in Europe and its potential impact on the U.S. market, according to Dave Schultz, director of marketing and strategic planning for Bendix.

“Europe has had a big impact on our financial markets, but I don’t see a European impact on our freight movement,” he says. “However, consumer confidence could be affected.”

Europe’s economic situation is not the only way the aftermarket can be impacted by other countries.

“There always is the specter of offshore parts,” says John O’Leary, senior vice president of service and part for Daimler Trucks North America. “People still care about quality, and the quality of offshore parts is still suspect — especially with things like engine parts. It is not a huge issue, but it certainly is looming and is making inroads in certain areas.”

On the repair shop side, MacKay says in certain areas of the country there has been a proliferation of service businesses that are operating under the radar. “There are little shops that do work on a cash basis. The labor is cheap, the parts are cheap and the work is acceptable.”

He adds, “It is not a recognized channel, but it is starting to bite into the business that the recognized channel enjoys.”

Another potential threat is the encroachment of companies from the passenger car and light-truck markets into heavy-duty parts distribution.

“As it gets tougher to make margins on the passenger car and light-truck side, we think those folks are going to come more into the commercial vehicle marketplace,” Reimondo says.

Alread says diversification is a way to combat that threat. “If you are not servicing medium-duty trucks, perhaps you should be. If you are not doing transmissions, should you get into that?”

Reimondo says, “If they are a wheel-end specialist that doesn’t do batteries and wiper blades there is an opportunity for them by adding those products.”

How do you expect aftermarket sales in 2012 to compare with sales in 2011? -- Blue -- Somewhat higher, Red -- About the same, Brown -- Much higher, Gray -- Somewhat lower

He adds that most independent distributors view truck dealers as their competitors. “Tell me what dealer does not install parts? We think this is a tremendous upside for the independent distributor to solidify, diversify and grow their business through the expansion into service.”

Market erosion is made worse by the growth of Internet only parts sellers, according to Wade. “These Internet guys can scrape the cream off of any territory without the expense of a physical presence,” he says. “And because the suppliers have done a good job of cataloging and instructing on how parts work, the expertise of the counterman is not in as great a demand as it used to be.”

On the service side, however, Wade does not think there will be margin pressure. “As the technician shortage continues to build, the margin on service will continue to go up. It is simple supply and demand,” he says.

For the independent service garage the challenge is on the technology side, according to MacKay.

He believes they are going to have to make a significant investment in technology-related items in order to be competitive with truck dealers.

Keys To Success

The first step to success in 2012 is to understand your customer base. “If the distributors and repair centers take a deep look into their market area and understand their market area, customers, customers’ equipment and what their equipment specifications are, and then calibrate themselves so they have the correct inventory and resources, they will be successful,” McCleave says.

One way to do that, according to O’Leary, is to have the proper breadth and depth of inventory. “Today with all the information at your fingertips, if you want a part you usually can find it. The density of parts distribution is quite high in most areas, so if a business does not have a part, the customer will go down the street or across town to get it,” he says.

Crowley says this means distributors need to focus on inventory utilization. “There is a move by large distributors and larger suppliers to vendor-managed inventory.”

He says, “It takes most of the guesswork out of the process and a lot of the emotion. VMI helps distributors utilize their assets better. An uptick in utilization of inventory certainly is welcome by any independent distribution point.”

The complexity and sophistication of today’s vehicles makes a trained staff more important than ever. “Trucks today have robust electronics so being able to troubleshoot and work on them is critical,” O’Leary says.

This complexity will continue to put pressure on dealers, distributors and repair garages to be solutions providers, according to Livingston. “If a customer has an issue you have to be the person he goes to for information. This means you have to be up to speed on technology, you have to understand product features and benefits and you have to be seen as adding value.”

He adds, “It is not just the price of what is in the box. Value added is going to make the difference. That is how customers choose who to do business with. They look at who can provide the greatest value — the total value — not just the piece price of the part.”

Bell believes customers are looking for business partners. “They want someone who is going to go into the trenches with them to share not only their gain but their pain as well.”

Ultimately, Otter says aftermarket companies need to stay the course. “They have to continue to add value to fleets and repair garages.” This could include inventory breadth, on-time delivery or technical services. “Whatever they use to differentiate themselves in the marketplace is what they need to sharpen and continue to improve.”

For Wade, the addition of service is critical for success. “Right now I can go online and buy a part without interacting with a distributor. To compete you have to put in some kind of service. I don’t care if it is hydraulics or drivelines, bench service, vehicle service or mobile service, distributors have got to find a way to get a service component into their businesses.”

Driver Shortage Will Cap Fleets’ Growth

By Avery Vise, executive director, trucking, research and analysis for Randall-Reilly Business Media and Information avise@randallreilly.com

Trucking analysts believe that growth in freight demand during 2012 will be good but not great assuming nothing truly bad happens.

Unfortunately, there’s plenty of bad stuff that could happen. The good news for the trucking industry, however, is that barring a true recession, capacity probably will lag freight volume, keeping freight rates healthy.

A shortage of qualified drivers is by far the top challenge facing trucking companies today. In November, 57 percent of trucking executives declared driver availability to be their top concern, according to the monthly Randall-Reilly MarketPulse survey.

More than 67 percent expect driver availability to be their biggest challenge in 2012, far eclipsing No. 2, freight pricing, at 9 percent.

Trucking companies face multiple labor challenges. For starters, they slashed more than 225,000 primarily driver jobs most of them drivers between the peak in January 2007 and the bottom in March 2010. Many of those drivers moved on or were marginal to begin with.

Then carriers faced new regulatory and enforcement challenges, such as the Compliance, Safety, Accountability program, that forced them to raise minimum qualification standards for drivers. Meanwhile, the flow of new commercial driver’s license holders shriveled to a trickle during the downturn.

So it’s hard to get good drivers, but is this situation really holding trucking companies back?

Apparently so. In the same MarketPulse survey, just 42 percent said they are consistently able to hire and retain enough drivers to haul all the freight available to them.

Trucking companies generally are optimistic. Business already is pretty good, and most think business conditions will be even better in six months.

Many carriers would like to grow, but about 45 percent expect to settle for replacing aging equipment. Although 57 percent of carriers say they will add trucks in 2012, the reality is that there just won’t be drivers available to do so.

Changing Relationships

By Denise L. Rondini, Executive Editor, drondini@randallreilly.com

No relationship is more important than the one between suppliers and their channels of distribution.

In general, how did your relationships with suppliers change in 2011? PRICING -- Blue --Less favorable pricing, Red -- No change iin pricing, Gray -- More favorable pricing, BUSINESS NEEDS -- Blue -- No change to our business needs, Red -- Greater attentiveness to our business needs, Gray -- Less attentiveness to our business needs, TRAINING OPPORTUNITIES AND MARKETING PROGRAMS -- Blue -- No change in training opportunities and marketing programs, Red -- More training opportunities and marketing programs, Gray -- Fewer training opportunities and marketing programs

Suppliers are beginning to feel pressure from private label programs, according to Tim Kraus, president of the Heavy Duty Manufacturers Association.

“Brands need to be supported, but branding also can include the reseller’s identity (private label programs),” he says. He thinks suppliers needs to do a better job of selling their overall value and distributors need to support suppliers that provide “great products, support, service and value.”

Terry Livingston, general manager, aftermarket U.S. and Canada for Meritor, thinks loyalty is going to be a key issue. “We are moving toward wanting loyalty. We do not want to rent the business,” he says.

Dave Schultz, director of marketing and strategic planning for Bendix, believes suppliers have a responsibility to improve their value back to the distribution network. “That includes providing appropriate data and training to keep people up to speed,” he says.

Bill Gryzenia, Dana’s vice president, aftermarket, says there is a lower tolerance for unacceptable operational performance “that includes availability, service levels and product offering. A lot of companies are offering not only the traditional genuine products, but a second tier product that focuses more on the second and third owner of the vehicle.”

Another trend is distributors buying directly in low-cost countries.

“Suppliers can’t sit idle and watch distributors pursue the highest volume components directly from low-cost overseas suppliers and only purchase the low-volume items from their current supply base.”

He adds, “At some point, suppliers will have to start addressing this. I think we are going to start seeing this happen in 2012.”

Dave McCleave, director of aftermarket sales/technical service at Hendrickson International, is seeing some niche suppliers trying to break into the market by-passing the traditional distribution model. “When you pass up traditional channels of distribution that means there is potential for margin collapse.”

Shrinkage Across The Chain

By Denise L. Rondini, Executive Editor, drondini@randallreilly.com

Consolidation has become a way of life in the heavy-duty aftermarket and most think that will continue in 2012 and may be aided by outside sources.

“There is a lot of interest by investors and well-heeled private equity groups in this industry,” Tim Kraus, president of the Heavy Duty Manufacturers Association, says. “This is mainly due to the value seen in this market. It is an historically profitable business.”

Bill Gryzenia, Dana’s vice president, aftermarket, says there is a great deal of talk about private equity and the aftermarket. “The saying ‘the aftermarket is an afterthought’ is not true today. As a result we will continue to see private equity companies try to enter the market.”

John O’Leary, senior vice president of service and parts for Daimler Trucks North America, says consolidation will continue because “it takes a significant investment in infrastructure to stay in the game these days. As a result, spreading that investment across multiple locations is critical.

Don Reimondo, CEO of HDA Truck Pride, shares this belief. “There is an enormous amount of money piled up in the marketplace and I think people are just waiting for it to break loose.”

He adds, “We are an aging community at least on the distribution side. From a market demand standpoint, you will continue to see strategic alliances because footprint is critical.”

According to Dave McCleave, director of aftermarket/technical service for Hendrickson International, the market has a need for consolidation. “Fleets are looking for national parts and service contracts. They are dictating that the market move, so consolidation will continue,” he says.

The following stories, while both horrifying and humorous, are meant to educate and help you keep repair demons out of your shop.

Most technicians want to do a good job, but even the best technician can lose focus, try to cut corners or just have a bad day. Other times even the best intentions are no match for outside forces or missing information.

We’ve reached out to the industry to collect repair horror stories to use as a way to reinforce important lessons.

The following tales from repair garages, manufacturers and suppliers should not be interpreted to imply a shop is bad, or that a particular manufacturer or supplier makes shoddy parts Instead, we hope to illustrate problems that can occur in any shop or with any part.

In fact, we thank the brave souls who conquered their demons and shared their terrifying tales with us so that we could pass them on to you.

The Perilous Path

Sometimes having the right authorizations or tracing a problem back to the original source can save your shop from a disastrous outcome.

Porretta’s Truck Services took delivery of a 2009 Freightliner with frame-related damage that was towed in following an accident. According to Tony Porretta, the truck was a rental from a major truck rental company and the customer was going to pay the bill.

After looking over the truck, his shop felt there were two repair options: straighten one frame rail and replace the cracked one or straighten both rails, weld the crack and sleeve both rails.

Even the best technician can have a bad day, and sometimes outside forces overcome the best intentions.

“Since the vehicle had less than 100,000 miles on it, my recommendation was to straighten the one rail and replace the other, because if we sleeved the rail it would lower the value of the truck later,” Porretta says.

He provided the customer with estimates for both procedures to turn into the rental company for review and authorization.

The customer called back saying the rental company had authorized the cheaper of the repairs, which was to sleeve the rails.

Once the work was completed, the truck rental company came to inspect it. According to Porretta, “That’s when the nightmare started.”

The rental company said the repair was unacceptable and added that it had not authorized such a repair — even though the customer told Porretta it had.

The truck rental company said it now wanted both rails replaced because of the additional holes drilled on the uncracked rail from the sleeving process.

“The repair turned ugly because this customer now had to pay for two frame rails,” he says. “The whole event almost came down to a meltdown between all three parties.”

Because the rental company was a good customer, Poretta agreed to absorb the cost of the first repair in order to resolve the issue and keep the truck rental company as a customer.

“The lesson learned is to always have written and signed documents from the owner of the vehicle and only take the owner’s word about what to do.”

He adds, “I learned that you have to maintain a paper trail and signed authorizations from the start of the job to the finish, along with photographs.”

A phantom vibration problem confronted the technicians at Botts Welding & Truck Service. A 15-month old tractor was brought to Botts after multiple trips to a dealership, which was unable to fix the problem.

The first thing Botts’ technicians did was road test the truck. “All indications pointed to the rear of the tractor so we removed all the tires and checked for proper inflation, tread pattern, diameter and determined that they had been mounted on the wheels properly,” says Gordon Botts, owner, Botts Welding & Truck Service.

All assemblies were found to be in tolerance and brake drums also were in tolerance and roundness.

Axle shafts were removed and checked for straightness and balance. This was followed by checking wheel bearing end play and torque. Again everything was in order.

Next Botts checked angularity of the driveshaft to make sure the differential matched the transmission angle.

“The next step was to check the frame for frame hop. Technicians set up wireless vibration sensors on the frame rail and drove the truck on the highway with a laptop in the tractor,” Botts says.

“The computer displayed a weird graph pattern indicating a ‘hog and sag,’ more like a banana,” he says.

This lead his technicians to conclude there was a frame flex problem, although that diagnosis did not make sense since it was a new truck that had never been overloaded or in an accident.

At that point, Botts decided to contact an engineer at the manufacturer of the axle and differential. He suggested there was a problem with the differentials so Botts removed the rear differential and checked the wear pattern. He discovered that the ring and pinion had a very unusual pattern.

He again contacted the engineer who suggested replacing the unit. Since Botts’ is not authorized to perform warranty work, he contacted the dealer’s service department, but was told unless the work was done in the dealership’s shop it would not be covered under warranty.

The customer did not want the vehicle to go back to the dealership so Botts sent the carrier to a rebuilder. The rebuilder inspected the unit and put it on a dynamometer where the carrier exhibited a bad shake.

“We purchased a rebuilt differential that came from the OEM and carried a two-year warranty,” Botts says. Thinking they had solved the problem, Botts installed the new carrier, took the truck for a test drive only to find the vibration still was occurring.

Another call was made to the engineer who this time suggested checking the front differential. The unit was removed and sent to the rebuilder who discovered the same unusual wear pattern.

“We made the decision to have the front unit exchanged and installed on the truck,” Botts says.

When entering the information on the work order, Botts’ office manager discovered that the rebuilder had billed the company for two different gear ratios. Botts immediately called the rebuilder to find out about the discrepancy. The rebuilder told him the carriers he had sent in had had different gear ratios.

At that point, Botts again removed the front carrier, installed a differential that had the same ratio as the rear end and the vibration was gone.

But alas, the problem was not over. The truck owner refused to pay for the repairs because he felt they should have been covered under warranty. The dealer ended up repossessing the truck because the owner had stopped making payments because he had not been able to use the truck.

Botts is suing both the dealer and the truck manufacturer, but since the truck owner filed for bankruptcy Botts has no recourse with him. The dealer and the manufacturer are claiming they did not authorize the repairs and so are not liable for them.

Botts believes the problem could have been resolved much faster if the dealer had reported the problem to the truck manufacturer who then could have called the differential manufacturer.

“The manufacturer would have taken care of the cost since it was their error,” he says. Differential sets are provided to the truck manufacturer as a set. “They clearly mismatched them when they were sent to the truck manufacturer.”

Botts says he paid for a valuable lesson and next time will be more diligent about making sure all the parties involved do what they are supposed to do before he undertakes a repair on a vehicle that is still under warranty.

Vanishing Parts

This next scary tale comes from Barry Ernst of Frame Service. This problem occurred on an AG 100 Kenworth air ride.

In this situation, the bolts that attach the straddle mount bushing of the C bar were coming loose and falling out of the housing bracket.

“We had two trucks within a few months with this problem,” Ernst says. The problem was causing the housing to shift back and forth.

Ernst says his technicians had worked on other trucks with that same suspension and had not had a problem. On the problem trucks, Frame Service’s technicians would replace the bolts but within a few weeks they would come loose.

An improperly installed flywheel can cause the release bearing to stick in the released position due to excessive run out.

Looking at another AG 100 suspension that his shop had worked on, Ernst discovered on this truck he had to correct the thrust and scrub on all four straddle mounting bushing, whereas on the problem trucks he had not needed to correct all four bushing.

To solve the problem, technicians installed an equal number of washers on both sides of the housing so as not to change the thrust.

“The problem went away,” Ernst says. “Now our procedure for this suspension is to install at least one washer between the housing bracket and straddle mounting bushing. We have no more bolts coming loose.”

Chilling Changeovers

Technician changeovers provide ample opportunity for mistakes to occur. Jason Dunn, customer support supervisor for Eaton Corp., recalls an incident that occurred when he was a Roadranger territory service manager.

A local repair shop had installed a new Solo clutch on a Hino chassis and in post-repair testing discovered that when they depressed the clutch pedal to the floor to release the clutch, the clutch pedal would stick.

Dunn had never encountered a problem like this so he agreed to go to the shop and help the technician install a new clutch.

“I got under the truck just as they were bolting the clutch up,” Dunn says. “Next they tried to install the transmission but were having a hard time aligning the transmission input shaft to the pilot bearing.”

Dunn says this should have been his tip off about what the problem was, but he let the work continue. After a bit of a struggle, the technician was able to force the transmission into place and tighten all the bolts.

Again the technician pressed the clutch pedal and again it stuck. Dunn suggested once again removing the transmission and the clutch and starting the repair over this time following all of the Roadranger installation procedures.

The first step is so use a dial indicator to check flywheel runout to determine if it is within specification. During this process, Dunn noticed some of the flywheel bolts were loose, and thought that might be part of the problem. But then he started checking runout and discovered that the flywheel runout was out of spec.

After removing the flywheel, Dunn noticed an indexing point on the crankshaft, which meant the flywheel could only be put on one way.

“In this particular instance, the technician had put the flywheel on the wrong way and in the process knocked the bolts loose,” Dunn says. The flywheel was not flush with the crankshaft and that was causing the problem with the clutch pedal.

Once the flywheel was installed properly, the clutch pedal worked fine.

“Many issues occur at shift changeover especially if the technicians do not communicate,” Dunn says. In this case, the second-shift technician assumed that the flywheel had been put on properly, which it hadn’t been.”

The other lesson from this tale is that had the technicians followed the official installation procedure and checked the flywheel runout, the problem would have been caught immediately.

Repairs also can go awry when a technician leaves the bay to get a part and fails to pick up exactly where he left off when returning to the repair.

A truck came into a dealership’s service bay with a leaking wheel seal. The technician pulled off the wheel hub assembly, cleaned everything, put the brake shoes back on, put on a new wheel seal and filled up the cavity. He installed the inner nut but left the bay without installing the outer lock nut.

Another tech came in to complete the job and installed the axle shaft but failed to check to see if the outer lock nut was on.

“As the truck started going down the road, the vibration caused the wheel axle to work itself loose,” an anonymous storyteller says.

The inner nut came off the truck, and as the truck was going down the road at 60 mph the wheel came off and shot down into a field. Fortunately, in this case, no one was injured.

The problem could have been prevented if the first technician had remained in the bay for about one additional minute.

“When you put the inner nut on and torque it down, it only takes an additional minute to put the outer lock nut on and torque it,” our anonymous source says.

“He never should have walked away from the job without locking both of those nuts down.” And the second technician should have taken a minute to check the work that already had been done to make sure it was done properly.

Frightful Rookie Repairs

Sometimes inexperience plays a starring role in a poor quality repair. One shop manager shared the following tale.

A young technician had pulled a wheel and hub assembly off a vehicle to install a new wheel seal. Once he had replaced the seal, he torqued everything, but failed to check the lube level in the differential.

It is important in this type of repair to pre-fill the cavity with oil so the bearings get lubricated.

As a result of the technician’s failure to check the lube level, the bearing burned up and the wheel end caught on fire.

Clearly this rookie tech needed a bit more training.

Brian Mulshine, director of field service at Navistar, shares a tale of a mistake a tech will only make once. A young technician came to the service manager in a panic because the engine of a vehicle he just finished working on would not stop running.

It seems the technician had been working on replacing a failed turbocharger. What he failed to realize is that when a turbo fails the oil that is pumping through it to cool the bearings is sucked into the charge air cooler where it pools on the bottom.

“When an inexperience tech puts in a new turbocharger he may not think to clean out the whole air induction system and it could have several quarts of oil in it,” Mulshine says.

What happens is when the tech turns the truck back on after the repair, the oil that has collected in the charge air cooler heats up and turns into a vapor, which will become fuel and the engine will just take off.

“The technician will think there is some ghost or phantom problem that is causing the engine to run away, when in fact it was his failure to remove oil from the charge air cooler,” says Mulshine.

Phantom Knowledge

Sometimes arrogance can be a technician’s worst enemy. At one point in his career, Dunn was a training specialist for Oshkosh Corp. As part of his technician training program, he would cause electrical failures on trucks and ask technicians to find the source of the failure.

“We would give the technicians everything they needed: digital volt-ohmmeters, electrical schematics and troubleshooting guides,” he says. “Inevitably they would head to the shop with only the volt-ohmmeter and start poking around.”

When Dunn would see technicians doing this, he would ask them what they were doing. When they explained they were checking the resistance on the circuit, Dunn would then ask them what the specification was.

He often was met with blank stares to which he would reply, “If you don’t know what the specification should be, once you find what it is on this circuit how will you know if it is good or bad?”

This usually would send the technician scrambling back for the troubleshooting guide and electrical schematic.

“I don’t know if it is arrogance, but there is a feeling among technicians that if you have to read the manual to complete a repair, then you don’t know what you are doing, or you are not seasoned enough to be able to fix it the right way,” Dunn says. “That is so far from the truth,” he adds.

He believes that today’s vehicles are too complex for that sort of thinking.

Dunn’s advice to technicians can be summed up in an acronym he learned a long time ago: RTFM, read the factory manual.

Damage to the teeth of this crankshaft gear occurred during a repair that went from bad to worse.

“This is especially true for electrical components where specifications are so vital in addition to being difficult to troubleshoot,” he says.

“Troubleshooting an air system is a little easier because air makes noise, it leaks. When you troubleshoot a hydraulic circuit or an oil circuit it is a bit easier because fluid can leak.

“But you can’t see electrons and you won’t see them spilling to the ground, which is why most people have the most difficult time troubleshooting electrical circuits and why they need to RTFM.”

Cheap Thrills

A failure to use a $15 strap kit led to a major repair. A truck was in a shop for repair, and over the course of the repair, the U-joint was removed from the driveshaft. The shop had a policy of replacing the strap kit every time this happened.

Additional damage occurred to the cam gear and the camshaft, which broke into two pieces.

However, a technician failed to follow this procedure and used the old strap kit and bolts. “Everything was covered in grease,” says our anonymous storyteller. “There was grease in the bolt hole and the strap kit did not go all the way tight.”

As the truck was going down the road following the repair, the cap came loose and the driveshaft fell out of the truck.

“When a driveshaft comes out of a truck it is as like a grenade going off underneath the truck. It bangs, it clangs, it rips air lines, it rips air valves, it dents metal. It basically twists metal up like a pretzel,” the source says.

As a result, the shop now had a major repair on its hands. “New air lines and new electrical lines had to be installed and the cross members had to be replaced. And to think a $15 strap kit could have prevented it all.”

The Repair From Hades

Sometimes things just seem to go from bad to worse as was the case with this horror story from R & W Truck Service. A diesel powered vehicle that was not running properly was brought in the shop.

The lock nut washer on the left was found to have caused much of the damage to the gear teeth. It should have looked like the one on the right.

After a careful diagnosis, the technician determined that the injection pump and injectors needed to be serviced. The repair was made and after a successful test drive, the vehicle was returned to the customer.

On its first trip following the repair, the truck had to be towed back to the shop. This time the diagnosis showed bent push rods and a broken rocker.

The repair was made, but once the truck was restarted, Christopher Schutt, R & W president, says it did not sound right. “We disassembled the engine and found the same push rods were bent.”

Schutt’s technicians dug deeper looking behind the front timing gear cover and discovered broken gear teeth caused by metal pieces.

On further examination, they discovered that the metal pieces were from a lock washer off the recently installed injection pump.

Sounds like an easy repair. Change the camshaft and crankshaft gears and replace the lock washer. However the cam gear is attached to the camshaft, which broke and became a two-piece unit. And the crankshaft gear had rotated one-eighth of a turn.

“Now we are three weeks into the repair, tracking parts down and trying to maintain good relations with our customer,” Schutt says. Once the necessary parts arrived, Schutt’s crew worked hard to get the truck back on the road again.

Three hours after the customer took delivery, Schutt got a call telling him the truck’s engine had stopped and the vehicle was being towed back in.

When the truck arrived, Schutt checked some basics again and scanned for codes. He found the cam sensor was setting a fault code, but further diagnosis could not conclusively confirm the fault.

At this point, technicians decided to replace the sensor and the truck then started working properly.

Schutt assumes that the washer got knocked down into the front cover during the disassembly needed to install the new injection pump.

As a result of this unfortunate incident, Schutt has instituted a new method of parts organization during repair jobs. “The likelihood of a mistake is reduced by a little preventive maintenance that shouldn’t stop at the vehicle level. It also should include your staff,” Schutt says.

Keeping The Demons Away

Not all mistakes can be prevented, but there are things shops can do to lessen the chance of ghosts and goblins getting in the way of a proper repair.

Training and Tooling: One of the biggest things a shop owner can do is invest in training and tooling. “It gets really difficult,” says Brian Mulshine, director of field service for Navistar. “I can’t tell you how many different things you need to test the EGR cooler for example. You need special fittings and block-off tools to check the pressure or to diagnose an electrical problem.”

Another easy tip is to check for technical letters. Mulshine says that manufacturers issue technical letters that update existing repair procedures or offer advice on how to handle a specific problem.

Given that most of today’s trucks have multiple computers on them, calibration has become a big issue. Mulshine advises shop owners to have technicians check the calibration of the computers when undertaking a repair.

Measurements: In order to improve your shop’s efficiency, you need to monitor your performance. Most shops will look at gross margin or technician productivity and Mulshine encourages shops to look at time to service. This is the time from when the repair order is created to when the first technicians punches in to begin work on the vehicle.

This is something that is increasingly becoming more important to customers. Of course, you also wil want to track how much time is spent completing the repair, as well as how long it takes for the repair order to be closed once the technician signs off the job.

Parts Availability: One of the main things that holds up a repair is lack of parts. This problem has been exacerbated by all the different engine models now available.

“For each engine we launch, there is around $35,000 in parts inventory,” Mulshine says. This includes things like hoses, pipes, pulleys, filters, etc.

It is estimated that for 25 to 30 percent of trucks needing to be repaired a part will need to be ordered. This is one of the drivers behind the OEMs’ focus on accelerated service.

If the technician can diagnose a truck within two hours of it arriving at the shop, any parts not in stock can be ordered immediately and the repair can begin more quickly.

The Recurring Nightmare

By Lucas Deal, Associate Editor / lucasdeal@rrpub.com

Fighting a devilish repair can be a frustrating, expensive and exhausting experience, but not all service horror stories come from perplexing or baffling repairs. Sometimes simple and quick repairs can cause drama by becoming repetitive problems.

When moisture and corrosive de-icing chemicals seep into a J560 connector, they can eat away and eventually destroy the rods on the connection’s male end.

When a technician finds himself making a normally uncommon repair on a frequent basis, the reason usually is as basic as the repair itself.

The technician just has to find the reason why the failure keeps occurring and when he can’t, a rudimentary repair quickly can become a recurring nightmare.

One area where simple repairs can become tedious and cumbersome is around connectors in a tractor’s electrical system — specifically the connection that routes electricity from a tractor to the trailer to power the latter’s ABS brakes and lighting systems.

The electrical cables that route power to the trailer feature two connection points, both of which are linked together with an SAE J560 connector.

The first connection links the electrical current from the motor to a longer trailer cord that runs under the tractor to a second connection point behind the cab. There the trailer cable is connected to the trailer.

A simple way to minimize corrosion and electrical failure through this connection is regular preventive maintenance and regular greasing.

The connectors perform the same function at each position, but according to Gary Hubbard, quality manager for Phillips Industries, the inconvenient location of the first connection can lead to neglect. That neglect leads to corrosion, which over time creates serious problems.

Hubbard says preventive maintenance will keep the connection working properly for a long time, unfortunately that maintenance is almost never performed. And because it isn’t, he says the connection can haunt technicians for a long time.

“I was corrected by a friend once for saying 95 percent of tractor-side connections rarely get unplugged. That number is actually closer to 99 percent, and may be even higher,” Hubbard says.

“The trailer-side connection, where the trailer is connected to the trailer cable from the tractor, is disconnected and reconnected every time you hook up a new trailer. But where the trailer cable links to the tractor cable under the cab? That is connected and never looked at.”

Once a connection has been destroyed by corrosion, the entire link must be replaced. Fixing just one side will cause another round of problems to occur.

That disregard becomes a problem because of an extremely small but problematic space created between the plug and the socket of the connection.

According to Hubbard, J560 connectors have a 14 sq. mm. area of leak space when linked. When moisture and chlorides from road chemicals seep into that space they can combine with the connection’s electrical current to build corrosion. Over time, this corrosion weakens the connection and eventually destroys it, cutting off power to the trailer behind it.

And when it comes to horrific nightmares, a trailer without brakes or lights is right up there.

Hubbard says disconnecting the link periodically to remove moisture and add grease will help prevent a power shortage in most cases. But if one occurs, he says it’s important for technicians to make a complete repair the first time. A stop-gap repair to a J560 connection won’t last — it will just keep coming back to cause problems.

“The problem we see most often in repairs is a technician will find the problem and replace the trailer cable, but he won’t replace the tractor connection into the cable,” Hubbard says. “You have to replace the tractor harness and the trailer cable.”

He adds, “If you just make half the repair then it’s going to fail again that much faster. It’s best to fix everything and then maintain it so it doesn’t happen again.”

Independent repair garages and OEM dealer networks are on the opposite sides of the struggle for repair information

In the battle for technical information, the lines have been drawn. Repair garages and OEM dealers are on opposite sides of this hot-button topic.

The right to repair debate has existed in the aftermarket for ages. For as long as customers have needed repairs, service providers have needed technical information to make those repairs. That information always has been available to dealers, but hasn’t necessarily been available to other service providers.

The two sides

Heavy-duty truck manufacturers provide repair, technical and proprietary information to their dealer networks, giving these dealers the content necessary to repair a disabled truck brought to dealership shops. This information isn’t free — joining an OEM network takes a significant financial commitment — but it does provide the dealer with unlimited resources when a truck is brought in for a repair.

Whether the problem is a wheel bearing replacement or an engine overhaul, the information the dealership’s technicians need to complete the repair order is available to them when they start the job.

At independent service facilities, that information isn’t as easy to access.

Unaffiliated repair garages have the opportunity to provide service to any brand of truck that enters their shops, but without any relationships or contracts with OEMs, these independent garages cannot access nearly as much technical information as a dealership’s shop.

As a result, independents are regularly faced with the challenge of working with limited (or no) technical information, finding the information elsewhere or relying on a rival dealer to help complete a repair order.

From their perspective, the situation is far from ideal. The use of computer technology in engines and throughout heavy-duty trucks has skyrocketed in the last 10 years. Vehicles that used to have one on-board computer now are linked by dozens, and accessing specific technical information and diagnostic codes is vital.

If a technician requires a code to complete a repair order and a manufacturer won’t release it, independent service providers say that’s more than just a minor roadblock. It’s a mountain — and it’s one they currently can’t overcome.

“We’re at a point where we can’t make simple repairs anymore,” says Dave Scheer, president and CEO of Inland Truck Parts. “OEs aren’t allowing us the information we need, and they are limiting our ability to provide service to our customers.”

Manufacturers view the situation much differently.

Most manufacturers claim a large percentage of their technical information can be found through company websites or other places for free; and they are vocal in proclaiming all of their technical information is provided to their dealer networks.

But since independent service providers have no financial obligations to OEMs, many manufacturers believe their proprietary information should only be provided to those service providers who are willing to commit, financially, to their organization.

To OEMs, that information exclusivity also delivers them assurance that their proprietary information will not fall into the wrong hands and be counterfeited or duplicated.

Manufacturers are aware that if they unveil all of their technical information to everyone there is a greater chance their proprietary and trade secrets could be uncovered and exploited.

The idea behind right to repair

Needless to say, there is a disconnect between the two sides. The right to repair movement is a possible solution to bring the sides together, and it’s one the independents support wholeheartedly.

Independent service providers say truck diagnostic codes are a key area of information they cannot access.

Independent service providers say they believe customers should have the right to choose where their vehicles are repaired, and believe it is unfair for manufacturers to funnel business back to their dealers by withholding simple repair information from unaffiliated service providers.

These independent providers also don’t want to join dealer networks to gain this information, though they are willing to pay for it. Recently, support for a “pay for information” plan has begun to grow in Washington, D.C.

Multiple bills have been proposed in the U.S. Congress that would require automotive manufacturers to provide diagnostic codes and technical information to independent repair facilities.

These bills, which have been introduced in the House of Representatives and the Senate, would require OEMs to make information available at a reasonable cost and would give independent service providers the option of when and what information they purchase.

Supported by the Automotive Aftermarket Industry Association (AAIA), these car and light-vehicle proposals were immediately backed by the independent heavy-duty aftermarket.

The bills should be discussed at great lengths at the first ever heavy-duty aftermarket legislative summit, scheduled to be held during the CVSN 2011 Aftermarket Distribution Summit in Washington D.C.

The event, set for Sept. 21, will allow members of the aftermarket the chance to meet and personally interact with their congressmen in an attempt to aid their businesses, provide valuable information to their representatives on the state of trucking and improve the aftermarket industry as a whole.

“Getting everyone together in Washington, D.C. will be a huge step,” says Marc Karon, president of Total Truck Parts. Karon believes the more the two sides address this issue and its possible solutions, the quicker something will get done about the problem.

He personally doesn’t expect any final decisions to come out of one day in Washington, but says federal involvement could help spur serious conversation and negotiations.

Service provider’s need a solution

For independent service providers, a resolution to the accessing technical information battle cannot come fast enough. The current restrictions and lack of access have become a burden.

“It’s really slowing us down,” Karon says. “There was a time where (the lack of access) really only affected you if you were doing engines. Now it’s starting to be a problem in other areas of the truck, and since we started doing engines a few years ago we’re dealing with it all the time.”

Scheer says OEMs have made strides in recent years to provide more content about actual repair procedures and parts, but they still are withholding simple but extremely important information like part and diagnostic codes needed to complete repair orders in a timely manner.

“We can get a lot of what we need, but we can’t get the one critical piece we need to finish the repair,” he says.

“When you run a repair shop efficiency is so important. You have to be able to get things done fast to be a competitor and be productive. For us to have to stop a repair order and wait for something really can hurt.”

Scheer guesses Inland is slowed by a lack of access on roughly 30 to 40 percent of its repair orders, and with 26 locations throughout the Midwest, that means dozens and dozens of times per day.

Even worse for Scheer, he says, is what his Inland Truck locations have to do when they hit an access roadblock. He says when there is no other solution Inland has to take its customer’s truck to a dealership.

“With a lot of these new diagnostic systems, a code tells you the problem and you go to a book and it tells you what to do (for that code). They won’t tell us what the codes mean,” Scheer says.

“If we find out it’s a G-69 code, for example, they won’t tell us what that means. They’ve blocked that access. We have to go to the dealer to find that out.”

At Total Truck Parts, Karon says his technicians can fix most trucks without access to the diagnostic codes; they just can’t reset them when the repairs are completed.

“If we need to replace the rear lights on a truck we can figure out what light we need to use without a part number code, but when we install the new light we cannot reset the switch that says the lights have been replaced,” he says.

“We have to have the code to reset the vehicle computer’s central controller and we don’t have that. You can’t get that unless you go to a dealer.”

Directing repair business back to dealerships is what OEMs want. Sitting on the other side of the right to repair argument, truck manufacturers are trying to provide adequate content to service providers while still keeping their dealer networks successful, competitive and prosperous.

And just because independent service providers are pushing for more information doesn’t mean they have been shut out by OEMs. Far from it.

A push by customers for faster service may end up forcing OEMs to compromise with independent shops on access to repair information.

Mike Kalkoske, quality services manager at Kenworth, says his company is providing more free technical information now than it ever has before.

“Kenworth provides operator manuals, service manuals and technical information bulletins. They are produced and updated as required,” he says, adding that Kenworth also links all component suppliers’ technical information websites to its information home page.

“In that sense, it’s getting a lot better,” says Scheer. “They are giving us more than they used to.”

But to independent service providers, websites filled with installation diagrams and component parts information still don’t reset a diagnostic sensor. Dealer exclusive OEM codes are required for that, and that’s what the independent aftermarket says it needs the most.

In order to get them, there will need to be a compromise.

The outlook for the future

When it comes to solving this problem, the CVSN legislative summit is a step in the right direction. It will give service providers the opportunity to discuss their plight as a single entity, and will provide them a platform to speak with legislators capable of making changes.

But one day on Capitol Hill can’t solve years of problems.

Scheer says the best bet for solving the problem actually may come from fleets and truck owners themselves.

“I think for a long time, a lot of truck owners and independent service providers were unaware of the issue,” he says, referring to the past when most inaccessible information was limited to engines, and therefore only affected a fraction of repair facilities.

“We’re at a point now where other independents, and fleets in their shops, are running into these problems and they’re voicing their opinions much more vigorously,” Scheer says.

With this issue, he says customers pushing for changes are the independent service provider’s best friend.

“The customer won’t stand for this,” he says. “They need their trucks fixed and back on the road. They can’t afford all of this downtime.”

Karon agrees. “Fleets that have their own shops are having the same problems that I have. The OEs are going to have to deal with that.”

He believes when manufacturers feel enough pressure to necessitate a change, the next step will be a logical one: OEMs will sell their diagnostic codes and currently inaccessible technical information to independent service providers on a case-by-case basis.

It probably won’t be cheap, Karon says, but that is to be expected. Any information the OEMs give out could hurt their dealers’ businesses, so high prices may come with the access.

“I think it’s going to be expensive. I think that’s fair,” he says. “I don’t know if the truck owner will think that’s fair, though I think they will be OK with it as long as their truck gets fixed.”

And in reality, getting a truck back on the road is the most important thing for both sides. Neither the OEMs nor the independent service providers have a business without customers.

That’s why Scheer thinks the right to repair issue is so important. It benefits customers, and in that way, it benefits the industry.

“The marketplace is demanding it,” he says. “It needs to happen for all of our customers.”

Where Do Component Manufacturers Stand?

In the battle between independent service providers and truck OEMs, it’s possible to overlook the importance component manufacturers have on a heavy-duty truck.

When it comes to component and aftermarket parts suppliers, they usually make sure their technical information is available to anyone who needs it; and as a result they aren’t involved in the right to repair debate.

“We create technical information for everything we have,” says Marshall Boheler, Webb Wheel Products vice president of OES sales and marketing. “We provide PDFs, hard copies, service manuals, instructional videos, all sorts of things. We make sure if a customer needs information about our products, they can access it.”

Dale Overton, Accuride corporate manager of product integrity, says his company also saturates its customers with technical information.

Overton says Accuride’s website has information on every part it produces, and all of the information can be accessed free of charge. He says the company also features a technical information hotline, so when a customer or service provider has a question it can be answered quickly.

Component suppliers’ information also can be found through third-party information providers. Dave Costantino, director of Mitchell 1’s commercial vehicle group, says his company updates its vast technical information network on a weekly basis.

Mitchell 1’s online platform features diagrams, parts assembly and troubleshooting information for hundreds of OEM and component suppliers. The company also features an online thesaurus and help line that Costantino says supplements its informational platform.

Pollak Aftermarket, an electrical connector, switch and sensor provider, says its technical information is necessary for all customers and provided in multiple forms.

“It’s always in our best interest to have informed customers,” says Rick Golden, Pollak’s strategic marketing manager. “With the products we provide, the consumer needs to know our (technical) information so they are safe.”

Overton says safety is an excellent reason to provide information. He says it benefits the customers, service providers and manufacturers — whether they are an OEM or component supplier.

“You want your information to advise a customer or service provider about everything so they understand,” he says.

The prospect of losing customers is a scary proposition for any business in this economy. The recent recession and crawling recovery have made businesses extra protective of their customers — and no one wants to let a customer get away when there’s a chance they may not be able to find a replacement.

But a maximum customer load doesn’t always translate into maximum profits, says Bill Wade of Wade & Partners. Some customers simply don’t make money for companies, and Wade says those unprofitable customers can go a long way toward limiting a business’s yearly profits.

The solution is simple: make those customers profitable or let them go.

Improving a customer’s value to your organization isn’t an easy task. In the aftermarket, what makes a customer unprofitable — or profitable — depends on a number of factors.

According to Wade, these factors include product margins, order sizes and schedules, delivery rates and schedules, customer service requirements, service shop requirements and payment plans.

Since each customer’s requirements are different for each factor, Wade says a distributor must investigate its entire customer base to discover who costs the most and the least. Only then, he says, can a distributor start working to improve or remove its unprofitable customers.

Investigating your customer base

The first step to turning unprofitable customers into valuable clients is acknowledging you have customer relationships you can improve. If a distributor believes in holding on to every customer it has, no matter what the cost, Wade says it may never reach its maximum earning potential.

“The whole process starts and ends with the ability to assign true cost to what you are providing to a customer,” he says. “You have to be able to look at every (customer), big or small, and decide if you’re making enough from them to be profitable.”

Customers who don’t buy a lot but don’t demand a lot of service still may be good customers, while others may buy more but require so much assistance they’re costing you money.

 The 80/20 rule states that a large majority (80 percent) of a distributor’s earnings come from a very small amount (20 percent) of its customers. Wade says it’s the remaining 80 percent of customers a distributor really needs to research.

Customers who don’t buy a lot of products but don’t demand a lot of service may be good customers, while other customers may buy more but require so much assistance that they’re costing you money. Every situation is different.

“Most distributors make almost all of their money from a very small level of customers. Then they maintain profitability on 75 to 80 percent of their remaining customers and just lose their (shirts) on the rest,” Wade says.

“Those bottom-rung customers kill you, and you have to find out who they are and why they are killing you in order to improve (your profits),” he adds.

Keith Ely, managing partner of Keith Ely & Associates, says the best way to research a customer and evaluate its profitability is to keep track of all interactions with that customer over a given period of time.

Ely says one week is not be enough time to get an accurate idea and a year is too long. He believes most customers’ habits can be tracked in two- to four-month timeframe.

While investigating a customer’s behavior, Ely says a distributor should keep track of where that customer falls in regard to gross profit margins on partspurchased, delivery requests, service requests and all other factors.

Ely says gross profit margin on parts is the most commonly emphasized factor, but he adds that a distributor cannot immediately assume a customer isn’t profitable if its margin is below average. That’s where the other factors and costs come in.

Ely says a 16 to 18 percent gross profit margin on parts is a common break-even number in the aftermarket. He says that margin usually allows a distributor enough leeway to provide service to customers, cover its costs and still make a net profit.

When a distributor examines a customer and discovers its margins are 15 percent or less, Ely says the distributor should examine the other factors before deciding to terminate the customer.

“With a customer like that, you can’t immediately fire them,” he says. “They may do everything the way you want them to, and they still may be profitable even though the margin is low so you can’t just remove them. That’s when you move on to the other things; the delivery requirements and service requests.”

Delivery schedules can be a major factor in a customer’s lack of profitability. Ely says it’s not uncommon for a delivery plan that was profitable in the past to become unprofitable.

Customers receiving a truck full of products daily can lose their value if that truck becomes 25 percent full.

Customer service and ordering procedures also can make customers unprofitable.

“You have to track everything, including ordering procedures because that can make a difference,” Ely says. “If you have customer who calls in to order parts and takes up your parts guy’s time on the phone when he could order online, that’s hurting you.”

At Kroeger Equipment & Supply, President Bruce Greer says his company tries to track order requests and corresponding returns. “If a customer turns around and returns half of what we deliver him every week, that doesn’t help us at all.”

Customers who don’t order a lot of products, order inconsistently or only order items on discount also can cause financial headaches.

“You have to be aware of the opportunistic customer,” says Guy Blissett, wholesale distribution lead at IBM and author of Facing the Forces of Change. “A customer who only buys products he can get on smaller margins is going to cost a lot more.”

Blissett says opportunistic customers usually look for sales, favorable delivery schedules or other promotional discounts when choosing a distributor. In many cases, these customers may buy 20 different products from 20 different suppliers.

Identifying these customers quickly is important, he says, because more often than not they will leave at the first sign of rising prices or service changes.

The opportunistic customer is focused on cost and nothing else, Blissett says, so working with them to become profitable is unlikely compared to a customer with whom you have a long-term relationship.

The last step in researching a customer is looking at how a customer pays his bills.

The recent recession caused many customers to adjust their payment habits, which in turn forced distributors to carry these customers much longer than they have in the past. As the economy works its way out of the recession, Wade says some customers are getting back to their previous billing cycles. The ones who still are behind, he says, may be falling into the unprofitable category.

“If a customer always has paid in 30 days and now he’s paying in 60 days, or even 90, that’s bad for you,” Wade says. “If it happens once or twice maybe you can stand it, but you can’t let that become a standard.”

Understanding your customer base and knowing the reasons why a customer is falling behind is very important in these situations.

A distributor has to be able to predict that customer’s future buying habits — and future payment plans — in order to decide how to handle moving forward. And if that means letting a previously good customer go, Wade says so be it.

“I know one company that had a contract with the state of Illinois — which used to be a huge contract — and they had to let (the state) go,” he says. “They were paying every 180 days and then tried to push it to 270 days. Who is going to put up with that?

“The company couldn’t carry the state like that for that long. When the contract came up they didn’t renew it.”

Addressing the customer

Once a distributor knows which of its customers are unprofitable, the next step is to meet with each customers and work to come up with a solution.

Ely says it’s important for a distributor to have a proposed solution ready before meeting with a customer. When both sides sit down, he says the distributor should first outline the problem and then detail the suggested solution.

A meeting of this nature has potential to become heated, so Greer says it is important for the distributor to speak clearly and use facts when presenting the problem and the solution.

“If you know your customer base and you know your profits are eroding somewhere, you really can’t be afraid to take a stand,” he says.

“We’re all trying to survive and we all have to make some money. We have to meet each other halfway. You have to tell them, ‘We can’t keep doing this this way.’ Be honest with them, and then be honest about how you want to fix it.”

There are multiple ways to turn an unprofitable customer into a profitable one.

Wade says the easiest solution is a price increase on products and services the customer buys. Raising the margin raises the gross profit from the customer and covers the additional costs they generate.

If the customer agrees to the price increase, he quickly moves back into the profitable category. And if he refuses and walk away, Wade says that loss still can be a positive.

“A loser customer is a waste of your resources,” he says. “He’s costing you on inventory, your salesmen’s time, your delivery costs. Everything. If he also isn’t willing to work with you, let him leave. You’ll benefit more from not having to serve him.”

In this situation, Ely says good customers who appreciate your business should understand the reasons behind your price increase and may be willing to work with you.

Not every customer will, but he believes some may step up and agree to the price increase.

“If you can do a really good job of laying out the increase — why you need to raise prices, what your goals are — then I think most customers we’ll get that. They’ll try to work with you,” Ely says.

“Some are going to say ‘Go pound sand, we’ll take our business elsewhere,’ but I think a customer who truly values your service will stick with you.”

Changing delivery and ordering procedures also can help bring a customer back from the brink, and both are less aggressive than a sudden price increase.

“The services you provide are a good place to look,” says Wade. “If you’re providing free delivery to someone, maybe you can cut that out and start charging a little. Another thing I’ve seen guys do that’s been successful is ask ‘Do you really need daily delivery?’ If the customer says once or twice a week will do, maybe that’s all you need.”

No matter what your solution is, Blissett says you have to back it up with facts — both for yourself and for the customer. Addressing a customer is a business decision and you have to keep it that way.

“The days of going on impulse and gut are behind us. You have to have data and insight,” he says. “You need to have facts to tell a customer that what you currently are doing is unsustainable and that their business is hurting you. You have to tell them why.”

At that point, the next step depends on the customer. He can accept your plan, reject it and go elsewhere or offer a compromise of his own.

If a customer responds with a compromise, Ely says you should evaluate it using the same factors you used to make your initial decision. Just make sure not to look at the compromise as a solution for all unprofitable customers.

Every customer is different, and he says you must treat them as such.

“There’s not a benchmark for everyone,” Ely says. “You have to evaluate each customer. At the end of the day, you have to ask yourself, ‘Is it worth it for us to deal with them?’ If it is, you should always try to make that business relationship work.”

After The Breakup

Watching a customer walk away can be tough, but not all breakups need to be permanent. A distributor and customer parting ways for specific reasons always should be open to reconciliation.

It’s the smart business move.

“As long as a divorce is professional and when (a customer) comes back he is treated in a professional manner, I think you can re-open that business,” says Keith Ely of Keith Ely & Associates.

Since the most common reasons for severing business with a customer are financial or unreasonable customer requests, Ely says it is important for a distributor to remind a returning customer that its policies have not changed, and that its goals remain the same.

If a customer’s reason for leaving was a proposed price increase, Ely says a distributor should stand firm on the increase before taking the old customer back. Accepting that business again at the previous rates quickly will cause the same problems to recur, he says.

“I think the conversation has to start with ‘Can you tell me why you are coming back?’ If they tell you they can’t find the service you provided them, or they can’t find a price that works for them then they probably will be open to your previous proposition,” Ely says.

“But the conversation you previously had has to stand. You have to tell them, ‘These still are my expectations, and for us to take you back you have to meet them.’”

Bruce Greer, president of Kroeger Equipment & Supply, says a positive and professional interaction during the initial breakup can make the reunion easier for both parties. A customer is more likely to return if you gave him reasons why you needed to part ways in the first place.

“If you speak from the heart and you’re honest and professional you can work through just about anything,” he says.

Customers never want to hear they are being let go or dropped, but Greer says they can understand the move and its motives much easier if a distributor speaks honestly.

“If you have a customer who you just can’t please, or you can’t seem to make the relationship work, you just have to tell them that,” he says.

“If it doesn’t work, it doesn’t work. That’s how things are sometimes. It’s not personal, so tell them it’s not personal. Tell them you just aren’t making enough off your margins or whatever it is. It’s a business decision and you have to tell them that.”

But if an ex-customer tries to return without acknowledging your past problems and concerns, he probably isn’t a good customer to take back, says Bill Wade of Wade & Partners.

“Say a guy was a pain when you let him go, and then he went across town and was a pain over there before they let him go; you have to be aware of that before taking him back,” Wade says, noting a customer’s ability to change is the most important factor in them returning to your business.

“If they didn’t work the first time, you have to decide, ‘Have they changed enough to work this time?’”

With the introduction of new technology, the repair order approval process is evolving.

Every company wants to find ways to save time. No matter the industry, saving time and managing it is a daily task. Products that aid the process are assets, and can make a major impact on a company’s bottom line. In the aftermarket, the repair order approval process is fraught with time delays.

All repairs need to be approved by a vehicle owner or fleet maintenance manager before a repair can be made, and the sooner a repair order can be forwarded from a garage to the vehicle’s owner and back to the garage, the sooner things get done.

Over the past decade, there has been a serious push to expedite this process. Both sides want to speed things up. Fleets and owner-operators want their trucks back on the road faster, and repair garages want to use their bays to complete more repairs.

In the past, there have only been minor improvements to the process, but with the introduction of new technology, businesses on both sides of the spectrum now see the potential for a major upgrade. Approving repair orders doesn’t have to take all day anymore.

The introduction of quality computer software has been the biggest improvement to the expediting of repair orders. Both DP Solutions (above) and Karmak (below) provide programs that are geared around improving shop protocols and moving a repair order through a garage as quickly as possible.

 The improvement of in-house computer software for fleets and service providers has been the biggest change in the repair order approval process.

Computer systems help technicians track everything, making it easy for a repair order to be passed from one technician to another.

These new programs have improved organization and communication in repair garages, they’ve created viable archives for all repair orders and are able to effectively gather and hold more information per repair order than any previous workplace system. Similar programs also have been released that cater to fleets, providing crucial time-saving opportunities to everyone involved in the repair process.

By making information collection and organization easier, service providers are getting information about repairs to customers faster than ever before, and they can answer questions and make adjustments at a rate they’ve never approached in the past.

Office file cabinets are finally becoming obsolete. Every piece of information a service provider could possibly need is now at his fingertips. And with fleets also making improvements, repair orders are being written and approved in record time.

Keith Ely, managing partner of Keith Ely & Associates, says that’s a good thing. Repair garages and fleets have long desired a better method of approving and completing repair orders. With this new technology, Ely says there is finally a way to meet their needs.

“The need for a faster solution to this (problem) has always been there. There’s always been a push to change the way things have been done, but I think now we’re at a point where the technology has finally caught up with ambition,” he says.

By cataloging the progression of a repair order while it is being completed, a service provider can notify a customer of problem the instant it is discovered. This quick interaction speeds up the repair order approval and gets the truck back on the road faster.

Before this new technology, in-house organization and poor communication regularly slowed down the process of approving a repair order. The first shop software programs weren’t complex enough to handle parts orders, business archives and repair orders — information was regularly misplaced. Office filing systems worked at keeping records, but manually writing and organizing every repair order was an exhausting process for garages everywhere.

Communication wasn’t much better, as the telephone was the only way for both sides to reach each other for decades. The phone allowed service providers to recite repair orders to fleets and allowed them to voice concerns, but without a secondary method of communication to forward visuals, information was regularly lost in translation.

The introduction of e-mail and fax machines was major progress, though improving modes of communication didn’t do much about fixing problematic shop practices. Technology was needed to make those adjustments.

Workplace software programs have made a 180-degree change since first being introduced. Dozens of programs are now available to service providers to improve anything from parts ordering to hourly scheduling.

Having a readily accessible program to handle repair orders is a necessity. The new programs are designed to provide several major benefits to each service provider, all of which have expedited the process of approving a repair order.

The first benefit of having an organized repair order program in a garage is the way it supplements communication between the service bays and the shop office.

Technicians can use computers located throughout the shop to quickly access a repair order and get information about any truck that enters their bay. The technician can see line-by-line what a customer wants done and how, so they are able to work efficiently without waiting for constant updates from a shop foreman or manager.

Whenever a change is made to a repair order, it changes on the technician’s computer the instant it’s entered into the system.

“A vendor that knows how to get things done efficiently and knows how to cater to a fleet’s needs is a benefit,” says Gary Cummings, executive vice president and COO at FleetNet America, a company that assists fleets in finding service providers that cater to their needs during roadside emergencies.

“A customer will be in a better mindset if he knows the vendor is capable of making changes and understands how to relay that information.”

Service provider’s managers and office workers also benefit from the computers in the shop. Every time a technician completes a step in a repair, he logs it in the computer near his service bay.

That information immediately updates to the office computer, allowing managers to update customers on the status of a repair instantly.

New repair order software also provides much more information. When repair orders were logged manually, a garage employee would need to search for information in stacks of paper to find vehicle history or a type of repair. With that much legwork, it wasn’t uncommon for less important information to be left off orders or not recorded.

Technology has eliminated that problem. Technicians now can record everything that goes into repairing a vehicle, and that information is saved forever with the repair order in the computer program.

“It’s become much easier to log an order and what goes into it,” says Buddy Timme, senior account executive at DP solutions. “Everything is saved electronically, so there’s room to be more detailed and provide more information.”

That extra information once again comes in handy when a customer calls about something on the repair order. “Now you have an electronic tool that filters information around the shop,” Timme says.

“Your employees are communicating by adding information to the program. When a customer calls and has a question, or wants to change something, the person answering the phone is completely up to date on the (repair) and knows what to tell them,” he adds.

These new in-house management systems also can prevent repairs from becoming customer relations problems. Most new programs feature a tool that estimates repair times based on the needed work. As a truck is fixed, the repair time decreases depending on how difficult the repair has been and what is left.

Carroll “Scooby” Barbre, product architect at Karmak, says most service providers can use that time estimate to notify customers when a repair is going slower than expected. Fleets want their trucks back on the road as quickly as possible, but setbacks are part of the repair process.

With this new technology, Barbre says those setbacks can be noticed earlier and minimized. And the quicker a problem is addressed, the quicker the additional work can be approved and the repair completed.

“The biggest thing with the in-house system is it provides a proactive approach to each situation rather than a reactionary one,” Barbre says. “Since you can follow things in real time, if a job is supposed to take a technician four hours and in two hours he isn’t close to being completed, you know that and you can do something about it. You can get that information to a customer and tell him the (repair) is taking longer than expected. Everyone knows what is going on earlier.”

And that kind of cooperation is a big help. A repair order is rarely written, executed and completed without any problems, and Cummings says knowing how a repair is progressing and where potential problems may arise helps a service provider stay in good standing with its customer.

“Every customer wants to know how long the truck is going to be down and how much it is going to cost them,” he says. “But they also want to know if there is a problem while it’s being repaired. They want to stay in the loop. They don’t want to discover there was a delay hours later.”

Ely agrees, and says a service provider is better off constantly updating its customers on a repair’s status rather than rushing and not telling them anything.

Any shop can make a repair, he says, but customers will come back to the one that provides quality customer service and positive interaction. That’s what makes this new technology so important.

“With these new systems, I think customer communication improves even if (service providers) are under the gun more,” Ely says. “Customers expect more out of them, but they can provide so much more information. The added interaction between both sides strengthens their relationship.”

But as much as these new programs have helped, changes still can be made. The introduction of web-based interactive software is the next step, and there already are companies in the aftermarket providing technology that allows up-to-the-second messaging between fleets and service providers.

The programs are far from industry standards, but they are gaining popularity.

The trick, as far as Cummings is concerned, is how each service provider integrates the new programs into its workshops. The web-based technology will help, but most service providers need assistance in understanding how to use it and how to make it work for them before they see the benefits, he says.

With in-house repair order software already in use at most garages, adding in a new web-based program without a plan can lead to a lot of extra work.

“That’s the challenge, there are so many different systems and you don’t want to double input information,” Cummings says. “You don’t want any employee putting the same information into two systems all the time, so it’s important to try to integrate the different programs.”

“The next leap is going to be an integration of these new systems into the business systems you already see out there so you don’t have duplication,” adds Ely.

“There’s been some push back on that because it forces a major change. If you don’t do it right, it can be cumbersome. But I think ultimately it is the right move because the benefits outweigh the costs.”

The Next Frontier

Improving the repair order approval process is a never-ending quest, but that doesn’t mean developments aren’t being made. Over the past decade service providers have started using in-house organizational software to track repair orders and accumulate information.

This new technology catalogs much more information than past workplace practices, and allows service providers to update customers about the status of their repair before any shop scheduling changes are made.

This proactive approach is saving time and money while improving customer service, and yet, fleets and owner-operators still beg for more. Recently, new Internet-based technology has been released to the aftermarket that is designed to allow up-to-the-second interaction between customers and service providers.

The new technology features a web portal for constant dialogue and easy interaction, and also is designed to allow service providers to forward all repair order information to customers in the blink of an eye.

These programs are the next step in expediting repair order approvals, and repair garages and fleets are beginning to jump on board.

“I usually look at the industry in three parts,” says Dick Hyatt, president and CEO of Decisiv, one of the companies pioneering this online technology. “One third of them get it immediately; they see the value and immediately change. The bottom third will resist a change to their deaths, and the middle third are who we work with. They are the ones who are looking into the new technology and looking at the benefits. They’re trying to see if things will work for them.”

Hyatt says the top third ignite changes and the middle third will make a procedure commonplace in an industry. He says nearly half of the middle third has embraced the technology, so we are nearing a tipping point. “We’re close,” he says. “Fleets drive progress in this industry and fleets are driving this change…The world is turning. There are finally solutions out there to make the repair order process faster. (Service providers) will benefit from taking advantage of them.”

This new technology is similar to in-house shop programs in many ways. Both allow technicians and shop managers to add information about a repair order and both constantly update the repair’s status, cost and the time expected to complete the repair.

The Internet portal is the biggest advantage of the new programs. With this new technology, any information added at the repair garage is immediately available to the fleet, assuming both businesses are using the program.

Repair orders no longer need to be e-mailed or faxed, and necessary phone calls drop dramatically. The web-portal messaging system also allows instantaneous conversation between both sides, so customers can view a repair order and give orders back to the repair garage within seconds of receiving the information.

“When you post something into the portal, everyone (with access at the fleet) can see it,” says Buddy Timme, senior account executive at DP solutions, another company offering the web-based software. “It isn’t like making a call to one person and then having to repeat the same thing to someone else who calls. When you update the status of a (repair) in the portal, everyone on the other side can see that.”

Gary Cummings is the executive vice president and COO at FleetNet America, a company that focuses on assisting fleets in finding service providers that cater to their needs in emergency situations. FleetNet must have an understanding of each repair order program to help its clients, and Cummings believes the Internet software is the future technology for tracking repairs.

Constant e-interaction has become a mainstay of our society, and Cummings says these new programs address that.

“It’s all about communication and what is the right tool for getting the information out to customers,” he says. “We’ve become such a technological society and we’re used to that instant communication. We want to know fast. These portals allow you to send information out to your customer no matter where they are.”

Rapid Repair Assessment is becoming a requirement for dealers and is making its way to the independent aftermarket.

Prompt service and accurate diagnosis have been cornerstones of the aftermarket for many years. Over the past decade, those values have combined to form a movement called Rapid Repair Assessment.

Introduced as a way to diagnose truck problems quickly and efficiently, rapid repair has grown from an vision to a reality. Different variations of the program have been instituted at dealerships nationwide, and customers have latched on to the idea like a fifth wheel coupling into a trailer.

Rapid repair already is seeing rapid application at dealerships. The program hasn’t taken off quite as fast in the independent aftermarket, but that doesn’t mean a popularity boom isn’t coming. The value is there and the resources are available — those using the program say it’s only a matter of time before everyone gets involved.

“In this business culture today, it’s something all (service) providers need to be doing,” says Chas Voyles, fleet service and customer service operations manager at Navistar. “Customers are beginning to expect it, and it’s a great service for them. You don’t want to be the one place that isn’t providing them with a something everyone else is (providing).”

The rapid repair movement began during the last decade when fleets and owner-operators started requesting a more prompt diagnostic service for parked trucks. Fleets were seeing long periods of downtime for trucks for what turned out to be minor repairs. Trucks would sit for days and then when brought into the bay would be repaired in a matter of minutes or hours.

Too much time was being wasted. Trucks needed to be on the road to keep business moving, and too many trucks were spending too much time sitting.

Customers began pushing for changes: faster diagnostics, better repair garage organization and parts delivery and, most of all, better communication between repair garages and customers. Out of that lobbying came the repaid repair movement.

The rapid repair movement has exploded over the past decade. The main goals of the program are simple: service providers are expected to diagnose a truck’s problems, locate the necessary parts, estimate the time and cost of the repair and notify the customer within two hours.

“Long story short, this thing came out of a survey process called ‘Voice of the Customer,’” says Kenneth Calhoun, vice president of customer relations for Truck Centers of Arkansas and chairman of the TMC Service Provider Committee. “The survey went out to a large spectrum of operators and rapid repair, or the rapid repair idea, was one of the main responses.”

Calhoun says operators were vocal in their insistence on better diagnostic service. They wanted something that would notify them about the problem with their truck quickly and effectively, allowing them to make decisions on their freight as fast as possible.

“They wanted an across-the-board service to address some of the issues they were having,” he says.

Not long after the release of the survey results, Wheeltime, a collection of Detroit Diesel distributors, introduced the first heavy-duty rapid repair program. Heavy-duty OEMs quickly followed suit, standardizing their own versions of the program in dealerships nationwide.

Though most rapid repair assessment programs vary in name from one OEM to another, the basic requirements and goals of the program are universal. According to Calhoun, rapid repair programs are designed to diagnose a truck’s problems, locate the necessary parts, estimate the time and cost of the repair and notify the customer of this information within two hours.

By diagnosing a problem immediately, garages are able to make quick fixes and reserve time for long repairs; while customers can accurately determine downtime when trying to get freight back on the road.

“That truck is that customer’s business; he needs it out on the road,” Voyles says. “If he needs you to look at it immediately and if takes you two or three days, that’s an embarrassment. With Accelerated Service (Navistar’s version of rapid repair), you are able to get that diagnosis back to him in two hours and he’s able to keep his business running.”

Instituting a functional and successful rapid repair program at your garage takes time, but is well worth the effort. Jim Elkins, director of fixed operations for Floyd’s Truck Center Inc., currently oversees three garages using rapid repair.

Elkins says it took just a couple months to install Freightliner’s version of rapid repair assessment at his first shop, and installation was even faster when he introduced it at his other two locations.

Elkins says there are several key decisions that need to be made before instituting rapid repair. The first step is to designate and set aside specific service bays for the program. With trucks coming in and out every two hours, rapid repair bays need to be easily accessible, close to the parts department and outfitted with diagnostic equipment. Elkins says his rapid repair bays are the ones closest to his service desk.

The right technology is also a necessity. Recent improvements in OEM production means new truck models are very advanced. Diagnostic computers need to be up to date with the newest software and be capable of handling any problem a malfunctioning engine may provide.

The rapid repair program’s biggest advantage is getting a diagnosis to a fleet or owner-operator as soon as possible. The quicker they learn what’s wrong, the quicker they can approve the repairs and get the truck back on the road. Faster turnaround is good business for the garages and the customers.

“In this day and age, with the advancements that have been made, the level of sophistication in these new units is just unreal,” Calhoun says. “Trucks used to have one just computer. Now they could have up to 12 separate computers talking to each other and working together instantaneously.” To operate a successful rapid repair system, he says the correct diagnostic tools are needed for each computer.

Once the bays have been reserved and stocked with diagnostic equipment, Elkins says it’s time to decide which technicians will work in the rapid repair bays. A good rapid repair technician must be experienced in diagnostics and have a wealth of technical, electronic and mechanical knowledge. He also must be personable, and have the social skills necessary to communicate repair information to customers.

“You’re investing a lot of time, money and training into this person, so you want him to be someone who can connect with customers,” Elkins says. “He has to be able to get across all of the information about the repair.”

The rapid repair technician also has to be able to connect with the other technicians in the shop, and Calhoun says how the technicians interact with each other is the most important part of rapid repair.

In the days before rapid repair, common practice at most garages was for an available technician to diagnose and repair a truck, handling the vehicle from arrival in the service bay to the conclusion of the repair. With rapid repair, the diagnosing technician instead tells the other technicians what to fix, Elkins says, and they aren’t able to investigate a problem before fixing it. The rapid repair technician parcels out the assignments; and the other technicians complete the actual work.

For a garage full of confident and capable technicians, this initially can be met with some resistance.

Scott Zeppenfeldt, vice president of service operations for Velocity Wheel Group in southern California, took a democratic approach to finding his rapid repair technicians. “We allowed our technicians to decide who they wanted working in the rapid repair bays,” he says. “They were able to choose someone everyone respected and trusted, and I think that helped them buy into the program.”

Calhoun also says it’s important to sell the rapid repair program to service managers first to help motivate the technicians.

“You have to have a complete buy in from everyone in your shop for (rapid repair) to work, and your service managers and shop managers have to really push the program,” he says. “These service managers constantly get bombarded with changes; technology comes at them at an extremely high rate of speed. They can be resistant. You need them to support it in order for the rest of the technicians to get on board.”

When everyone is on board, rapid repair is a simple program to execute. Trucks move in and out of rapid repair bays where the technicians identify the problems. Small problems can be fixed during the assessment, while larger problems are forwarded to the customer and the truck is sent to the shop to be repaired. Garages using the program have been pleased with its success.

“We’ve had nothing but good things come out of it,” says Mike Smith, service consultant for Diamond International in Memphis.

“Our national fleet customers have trucks in here every day, and they’ve seen a huge difference in turnaround time. Some trucks used to spend several hours or days on the lot and now they’re checked in within two hours. We’re getting things done faster, and we’re able to get more trucks — and more business — through the doors every day.”

“We should have done it earlier than we did,” Zeppenfeldt adds. “We knew about it, but we didn’t know how we wanted to institute it. Change is difficult. Sometimes the guys in the back will fight a change if they don’t understand it. Once we started doing this and the guys saw the revenue it was generating, they really came around fast.”

It doesn’t take any time for customers to start enjoying the benefits of the new protocol. At Truck Centers of Arkansas, Calhoun says his customers started using the program almost immediately.

“It’s funny, in this business things that start out ‘cool’ quickly become an expectation,” he says. “At first customers were just glad we had (rapid repair) as an option. Now they expect it every time.”

Voyles thinks that’s a good thing.

“With the economy being the way it is, downtime is the biggest enemy for the owner-operators. If their wheels aren’t turning, they aren’t earning,” he says. “We are their service providers. We had to do something to make things better for them and we’ve been able to do that. It helps their business and ours.”

Elkins agrees, and believes the program is a net positive for the repair garage and the customer. “Having a truck sitting in our lot for hours waiting to be diagnosed was a bad scenario for everyone. Now we’re getting everything done faster and that’s saving us time and (customers) money,” he says. “Twenty percent of the time the repair is made while we’re diagnosing the truck — in the past, that truck might not have even entered the shop in two hours.”

The program’s overwhelming approval rating means it’s only a matter of time before it’s universally accepted and used in all repair garages as well, says Voyles. “As far as right now, each OEM has its own version of it and some independent garages are getting on the bandwagon after seeing the seriousness of it. It’s definitely starting to grow,” he says.

But until the program reaches every garage, it will remain a differentiator. Customers want good service fast, and rapid repair provides that.

“Sometimes it’s hard to look at a major change and see the benefits,” Smith says. “I can only speak for myself, but for us, there is definitely a feeling of ‘Why didn’t we do this years ago?’ We’re turning around trucks faster than ever and the customers really like the program. I think it’s been great.”

Zeppenfeldt adds, “I like what it’s done for us. It’s a positive change. We’re trying to expand it to our second and third shifts to help even more customers. I’m glad it’s something we’ve done.”

Good shop safety keeps workers on the job, trucks in the bays and business flowing.

There is no greater asset to a service operation than its technicians. Tools, equipment and parts are necessities, but without a good technician nothing gets done. That’s why proper technician safety should be a top priority.

Keeping technicians in service bays and out of the hospital keeps business running smoothly and saves time and money. Safety is just good business, and that’s why repair garages go to great lengths to keep the shop safe.

The movement to improve technicians’ working conditions and keep employees safe began with the creation of United States Occupational Safety and Health Administration (OSHA) in 1970. According to OSHA’s mission statement, the organization was created “to ensure safe and healthful working conditions for working men and women by setting and enforcing standards and by providing training, outreach, education and assistance.”

In the aftermarket, keeping a technician safe means eliminating or minimizing all workshop hazards and creating a set of guidelines and regulations for employees to follow. OSHA provides all businesses with regulations and recommended practices, but most aftermarket businesses add to those regulations with personal guidelines and policies. Taking a preventive step forward now can help eliminate the risk of a disastrous step backward later.

“I don’t ever want one of my employees injured,” says Jay Thaudoir, manager of Truck Equipment Inc. in Green Bay, Wis. “I don’t ever want to call a technician’s family and tell them there has been an accident. I don’t want to deal with that and I don’t want to lose a technician to anything.”

The best way to avoid that is to be safe all the time, says Peter Zaidel of KPA Online. Zaidel works as a consultant for KPA with expertise in OSHA regulations and workplace safety.

Keeping technicians safe in the workplace is key to a productive aftermarket garage. Skinner Diesel uses a quarterly safety committee meeting to address safety issues and promote proper workplace safety techniques.

He says aftermarket businesses are making a concerted effort to provide technicians with a safe working environment through workshop regulations, safety committees, compliance with OSHA rules and preventive action. The different techniques are making shops safer than ever, and Zaidel says each technique is proving to be successful in its own way.

Safety committees and workplace safety meetings are providing major dividends at Skinner Diesel in Columbus, Ohio.

General Manager Mike Skinner started a safety committee several years ago, and the group currently meets quarterly. As a repair garage and parts distributor, Skinner Diesel is always at risk for technician injuries. Luckily, Skinner says, the safety committee has effectively eliminated them.

“They’ve created such a culture change around here,” he says. “When we started holding meetings, they were monthly and now we’re just doing them quarterly. People know now if something isn’t safe, or isn’t being done the way it should be, that it’s going to be addressed. You don’t want to be the one guy doing things wrong in a situation like that.”

Skinner says the safety committee is made up of one person from each shop department (brakes and tires, paint, trailers, etc.), and most meetings focus on current safety issues or potential environmental improvements. Sometimes, committee members will walk through departments they don’t work in to check on safety practices and offer recommendations.

Communication is a key to technician safety at Sadler Power Train. The company encourages its technicians to meet with management and discuss safety practices whenever problems arise.

Skinner says committee members always are welcome to bring up new safety ideas, and he says most workplace changes are prompted by committee member recommendations.

Mark Griffin, manager at Sadler Power Train in Dubuque, Iowa says everyone is asked to offer safety recommendations in his shop. Griffin has only three technicians, so he tries to speak personally with each one regarding workplace safety. Griffin says he can’t afford to lose a technician to downtime resulting from an injury, so whenever a potential problem is brought up it is quickly solved.

“I listen to everyone’s ideas. Everyone’s opinion matters here,” he says. “We’re always looking into ways to do things quicker and more efficiently, and we want our shop to be safe. When a (technician) has an idea on how to improve both, I listen.”

Matt Goodding does the same thing at Sadler’s Davenport, Iowa store. As the manager of a seven-man technician team, Goodding says he and his technicians make almost all the decisions regarding safety regulations in the shop. Sadler Power Train provides a safety manual and requires shop training for all new hires, but once a new employee hits the service bays, he’s Goodding’s responsibility.

“The technicians and I work really close together,” he says. “I encourage my guys to tell me if they need a new piece of equipment, or if we need to do something to prevent a hazard. If it’s something small, (Sadler headquarters) will pretty much let me do what I want.”

Goodding says Sadler does a good job addressing major issues when they come up. The company’s headquarters regularly checks on the safety records of its shops, and he says management understands how important it is to keep all of its technicians on the job. A worker’s comp case doesn’t just cost insurance money; it costs the company business, too.

Skinner Diesel recently saw its safety practices pay off with an impressive streak of 100,000 man hours without time lost to a workshop accident.

“(Safety) is very important to us because we’re not a giant company, but we turn out a lot of work,” Goodding says. “If we’re missing one guy — every guy here is a key guy — one guy out really puts us in a bind. We’ve got to have everybody here every day to get everything done.”

But keeping technicians on the job everyday requires more than just communication. Employees still need to follow safety practices.

At Skinner Diesel, safety is the result of consistency. Each department has guidelines to follow, and Skinner says the technicians follow them religiously. Since instituting the quarterly safety committee meetings and bringing technician safety to the forefront, Skinner’s employees have practically eliminated injuries.

The company went more than 100,000 man hours without injuries in the shop from 2009 through this year, and the only injuries since have been three stitches to a finger and a freak accident that injured an employee’s toe. Skinner says both injuries were minor.

Zaidel says some accidents truly are unavoidable, but proper safety regulations can limit their occurrence. He says the most common OSHA violation over the last two decades has been hazard communication, and other common violations include respiratory protection, electrical safety, personal safety equipment and general shop maintenance.

KPA provides consultation to aftermarket businesses to avoid breaking these rules, and Zaidel says most violations can be prevented with a simple change or a more proactive approach to safety.

Besides, repair garages don’t need to change everything to stay on the right side of OSHA, he says. Government regulations rarely change, so most businesses already are well aware of OSHA’s standards and regulations. Zaidel says they just have to be more proactive about staying safe.

Keeping a technician safe is a full-time job. From the instant a truck is brought into the shop until it’s backed out after the repair is complete, safety measures should be in effect. One of the most important components to safety is vehicle operation and placement.

A repair garage can have dozens of trucks come through its doors each day. With only a few technicians on the job, communication is necessary to make sure each truck enters and exits the shop safely and is placed in the correct location.

Skinner says he only allows managers to bring trucks into his garage, and each manager is instructed to perform an inspection in front of and behind the truck to make sure technicians aren’t working when a vehicle is moved. Customers hand their keys to Skinner and his managers when they arrive, and no one else touches them until the job is done.

Once a truck has entered a bay its wheels are chocked to keep the vehicle in place. Thaudoir says chocking the wheels allows a technician to move in and out from underneath a truck without fear of the truck moving. It’s also a key to anyone who needs to move a truck that a technician is currently working.

Having the right tool is important, too. Griffin says Sadler Power Train makes an effort to provide its employees with new technology whenever necessary. The company’s Dubuque garage currently is working to install a new filtration system to improve air quality.

In Green Bay, Thaudoir says he sees his technicians taking a more proactive approach to safety. “I had a technician with a truck on an air-jack recently, and before he started working I overheard him say to another guy, ‘Let’s get some safety jacks under there before we get started,’” Thaudoir says. “That’s where it starts. Just thinking about safety and doing the right thing before hand.”

The alternative — an injury — is something no repair garage wants to deal with. Worker’s compensation cases cost time and money in increased insurance premiums and medical bills. Simply put: Workshop safety doesn’t just keep employees healthy; it keeps businesses healthy, too.

“We have 55 people working here, and we managed to go almost 13 months without having any time lost to an injury,” Skinner says. “That was fantastic for our entire company.”

Especially with Skinner’s location in Ohio, where laws require all businesses to have worker’s comp insurance through the state and not private companies — which eliminates the freedom to shop for the best rates. Skinner says it could be a major detriment to his business if his premiums were to go up, so every month without a claim is a moral (and fiscal) victory.

“If you ran a shop and had a lot of claims, (the state) would literally put you out of the business,” Skinner says. “We’re already paying enough as it is with a good rating, but if you had a bad rating you’d be looking at an addition of $15 to $20 or more out of every $100 (earned) to insurance premiums. No one can afford that. We know if our guys work safely and we stay safe, we’ll stay in business the next year.”

John Sadler, president of Sadler Power Train, also sees the effects insurance premiums have on his business. Griffin and Goodding are in charge of keeping Sadler’s technicians safe at their individual stores, while Sadler is in charge of getting them proper insurance if they ever do get hurt.

The premiums aren’t cheap, but an excellent safety record has benefits. Sadler Power Train could receive up to $20,000 in returned fees if it remains injury-free until July 1, Sadler says, and that’s a bonus that can be shared with every employee.

“That’s gross profit that stays in the company, and I’d rather have that money go to (the employees) than the insurance company,” he says. “I think that’s an incentive for everyone.”

Thaudoir provides meals and other perks to his employees for every month they avoid an accident. He says his team of 17 technicians takes a common-sense approach to workshop safety to meet its goals, which means Thaudoir buys lunch for his employees almost every month. He likes that.

“The more we talk about (safety) and the more we address it the better it’s going to be,” he says. “Every time I bring some (food) in because of shop safety, it puts that idea in their heads. We want them to think about (safety), because that’s how we’ll be safe.”

The aftermarket is beginning to leave its footprint on the expanding social media landscape.

It began as a product of exclusivity, and now it’s the world’s most popular networking tool. Since its creation at Harvard in 2004, Facebook has dominated the social landscape. The online networking site is approaching 550 million members, and has exploded from a college-based friend site to a worldwide phenomenon. Children use it. So do their parents, their grandparents, their cousins and best friends. Musicians use it to promote their work, and film studios have turned to it as a way to market new releases and upcoming attractions.

In the aftermarket, the social media boom isn’t quite here yet.

Websites, e-mail blasts and online ordering have become commonplace in the industry in the last 10 years. Distributors have seized the Internet as an informational tool, and now are marketing standard business webpages with great ferocity.

Social media is the next step. Of the 15 parts suppliers nominated for the Truck Parts & Service Distributor of the Year in the past three years, only four have a presence on Facebook. The online community is so new and innovative, companies don’t know where to start. Is it a service marketing tool? Maybe a broadband customer network? Can it be used to present industry information or government regulations?

Right now, distributors, repair garages and dealers simply don’t know. April Chapman Broussard of Speakin-Up.com, an online marketing site that focuses on introducing social media to businesses, says the industry is capable of going anywhere online.

There are so few aftermarket companies using social media, a standard use is yet to be established. Broussard thinks that’s OK. She says not every company should use social media for the same reasons.

“What (companies) really need to do is figure out their purpose. What do we need to do?” Broussard says. “Once they define that, they can decide where to go and what to do. If your goal is to connect to clients, then you go one way. If it’s for deals and specials, then you can market another way. It’s important for companies to decide where to be involved.”

Broussard thinks the biggest strength of social media for distributors and repair garages will come from developing and nurturing relationships. Customers are the most important part of any business, and Broussard says there is no better way to cater to a customer’s needs than direct contact and interaction. Social media offers that.

“People do business with companies they know, like and trust, and social media helps bring people through these processes,” Broussard says.

“With Facebook, (customers) want to understand what your company is. They want your personality. They want to go there and get to know who you are.”

That’s why Broussard says taking advantage of social media is so important for aftermarket companies. Customers aren’t just using it, they’re flocking to it. There is an audience looking for information via social media, and aftermarket companies can tap into it. Broussard says the earlier a distributor or repair garage sits down and creates a social media strategy the better.

“This is a major marketing tool. Companies need to devote people and resources to it,” Broussard says. “I’m not going to blanketly say it will work for every person and every company, but there are 550 million people on Facebook. A transition from personal networking to business can be easily made for customers if you show them it’s there.”

But making that transition isn’t easy. Most aftermarket companies haven’t even begun to make it, and a majority of those who did have stalled after creating a page. They simply don’t have the time, resources or qualified people to make the page work. Facebook doesn’t cost anything, but it can’t make money either without some work.

“It takes a willingness from management to find a social media expert and really allow them to devote their time to the project,” says Tom Marx of The Marx Group, a business strategy and marketing communications firm. “You can’t do it in a day.”

At Stoops Freightliner, Marketing Manager Shane Crook has been working with social media for a year. In that time he has built the company’s Facebook site into one of the more active dealer sites on the web. Crook posts new content every week, and his posts range from industry article links to company open house information.

“Our common theme is information,” Crook says. “We put as many pieces of information as we can link to on our social media sites — whether it be from your magazine or a parts supplier or anyone. We put links (customers) can find on our site, and that leads them to your site and other sites.”

Crook says nearly half of the content posted on Stoops’ Facebook page isn’t company related. Obviously the company wants to promote its business and attract new customers, but Crook says Stoops’ online marketing plan is more complex. He says Stoops has bigger goals than using Facebook as a second company webpage.

“I want to spend at least half the time reinforcing the values of Stoops Freightliner and our business,” he says. “The other half I try to link to articles from magazines and information that is relevant in our industry. We want Stoops to be a source of information for the industry. We think if people can get information from us and rely on us, then it builds credibility.”

But not everyone in the aftermarket has latched on to Facebook the way Stoops Freightliner has.

At Stoops Freightliner and Quality Trailer, the decision to enter the social media landscape came from President Jeff Stoops (left). The company’s Facebook page is updated regularly with industry information and business news.

At Stone Truck Parts, Keith McLemore says his company’s Facebook footprint is pretty small. In fact, The 2010 Truck Parts & Service Distributor of the Year probably wouldn’t even have a page if not for a brush with high school football.

“My son plays football down here (in North Carolina) and about a year ago we were at a game where one of his teammates was seriously hurt,” McLemore says. “They had to bring out the ambulance and take him to the emergency room during the game, and those of us in the stands didn’t know how serious the injury was. The next morning I asked my wife what had happened to the kid, and she said she would make some phone calls or send an e-mail to find out.

“About that time, my son came down the steps and said the kid had broken his leg. I asked him how he knew that, and he said he saw it posted on Facebook after the game. Here we were trying to make phone calls the next day, and my son already knew about it eight hours earlier.”

McLemore says a light bulb went on in his head.

“For me, that was one of those moments,” he says. “We were going to make calls or send e-mails and he already knew the night before. My son doesn’t even think of something like e-mail. And that’s what we have to adjust to. This younger generation and the younger people entering our industry think so much differently about how to get information. That’s what we have to do.”

Stone Truck Parts began looking into Facebook early in 2010, and the company was online last fall. The basic page is a start, McLemore says. At the very least, he says it’s a place where customers can find the distributorship.

“We had a couple employees that have found it, and a couple customers have said they saw our page on Facebook. We hadn’t said anything to them about it,” McLemore says. “I think this shows customers are out there and they’re looking around. We want them to be able to find us.”

Brandon Ford, marketing director of The Power Train Companies, has gone to great lengths to create a Facebook page. Like Crook, Ford is taking a proactive approach to build customer loyalty. Power Train’s Facebook page is filled with industry news and awards, and also features an active wall of photos from company events, raffles and contests.

Ford believes it is important for Power Train to create a personal relationship with customers to help maintain a strong business connection. In fact, he believes his work on the Facebook page probably is more personal than professional. He thinks it has to be.

“It’s said that people buy from people, not on price,” Ford says. “We want our customers to see what our company is doing. We want them to see who we are.”

The Power Train Companies has been on Facebook for nearly a year. Marketing Manager Brandon Ford uses the page to interact with customers and grow relationships between the company and its customers.

In a way, Ford thinks Power Train’s Facebook page can be a supplement to the company’s sales team. By interacting with customers online, Ford can answer questions, promote business and build trust with the same people the distributorship is selling products to. But he says there is a fine line between networking and simple marketing, and he doesn’t want to cross it.

“One hundred percent of our effort on Facebook is put into building relationships,” Ford says. “We want to make our site valuable. We want customers to come to our site and get information about our company and allow us to interact with them.”

The problem is not every company has the ability to devote specific personnel to developing a social media presence. Broussard thinks any company using social media should designate someone to follow its site daily. Facebook is a 24/7 endeavor, and Broussard believes a quality page requires detailed attention. For Crook and Ford, that means setting aside time every day to update and organize a quality page. At other companies, that requires finding creative employees willing to go the extra mile.

John Andreotti and Rick King have taken on that role at Ott’s Friction Supply. Together the duo has created a Facebook page similar to what McLemore’s done at Stone Truck Parts.

“We’re fairly new to Facebook,” says Andreotti, Ott’s director of information. “When we started, we didn’t have a lot of goals, it was just an idea and we thought, ‘Let’s see what happens.’ It was part of our quasi-marketing program to get our name out to as many people as we could.”

King has been monitoring Ott’s page since it went live, and he logs on sporadically to check for activity and to post anything he can. As a full-time salesman, King says everything he does with the page comes from his extra free time.

He admits he’s hardly an online expert, but his personal knowledge with the networking site was enough to allow him to oversee the company’s page. King says he’s trying to campaign for more assistance, and a more focused approach to social media.

“It’s just, everybody has their plate full right now and (social media) has to be pushed to the top of the list for us to be able to do anything with it,” he says. “It’s just time. Everyone is busy and there is a lot to get done. Facebook is on the list, but everything else is on the list, too. It isn’t really where our priorities are right now.”

Broussard and Marx believe this is the case with a lot of aftermarket businesses. Companies are aware of the growing popularity of social media, but it’s such a new phenomenon they don’t know how to harness it. Marx thinks companies who are making the effort are on the right track.

“In thinking about what social media does — it’s really about building relationships, promoting your products, creating search engine optimization and online marketing. And if you break those down, it’s the opportunity to build stronger relationships with current customers and find new customers,” Marx says.

Stone Truck Parts made the move to social media last year after seeing how fast information can be provided. Stone’s Facebook page works as a supplement to its website.

He believes the more time aftermarket distributors spend using social media the more they will come to understand it. And even if a Facebook page doesn’t create financial dividends now, Marx and Broussard agree that it can down the road.

“I don’t think there’s going to be any turning back,” Marx says. “Old-school companies still are selling through their typical methods, and they can’t see how (social media) helps them. They think, ‘I don’t understand it, so I don’t need to know it.’ That isn’t going to work moving forward. With the growth of the smart phone, everyone will have mobile connectivity in the next three to four years. Customers are going to be online all the time.”

“Even older generations are coming around,” Broussard says. “(Aftermarket companies) are slower to adapt to this, but they are going that way, too. Eventually, it’s where everyone is going to be.”

Marsha Mills was shocked to find how many customers were already there when Kenworth Sales Company activated its Facebook page in December. Kenworth Sales Co. began looking into Facebook in 2009 as part of a full-scale reorganization of its website and online marketing strategy.

In just over a month, Kenworth Sales Company’s Facebook page already has been added to more than 30 friend lists. Mills doesn’t know what that means yet, but is optimistic moving forward.

As Kenworth’s marketing manager, Mills realizes there’s a change on the horizon. With an aging workforce in the industry, a technology boom isn’t a possibility, it’s a near certainty. The only question is when.

“This younger generation is one that wants information, literally, at its fingertips,” she says. “Our industry is a little bit older right now, but that younger generation is on its way. We want to get our name out there, so when the time comes, they’ll know about us.”

Broussard says that’s the right attitude to take. And because it doesn’t cost anything, she says there’s no reason for a business to wait any longer than they already have. Getting involved before the medium explodes in the trucking industry will be a lot easier than jumping in when it’s soaring.

Broussard says aftermarket companies need to realize that. “They are kind of behind the curve, and they need to figure out technology is going to help them,” she says. “It’s not going to be another drain on resources. Marketing companies are being trained — they are learning about (social media) and they know this is something they need to do. None of them were taught this in school, but we know whatever we learned won’t be applicable in the next five to 10 years. Not everything is going to work the way it’s working now. You have to be forward thinking.”

Marx says he’s seen aftermarket companies making the jump. The Marx Group offers social media assistance to all businesses, and he says trucking companies are among the businesses coming to him for aid. He says the future dividends are worth the time, no matter which route a business takes.

“It’s amazing how many people want to be your friend,” he says. “It’s really just about doing it, it isn’t that difficult. For the sites we handle, we only have people spending 15 to 30 minutes a day on any individual page. So it isn’t time consuming.”

Marx adds, “Anyone who has a marketing bone in their body can make (social media) work for them.”

Andreotti says that’s the motivation that brought Ott’s Friction online. Social media is a networking dream, and one any company can easily use. When the social media boom hits the aftermarket, having an established presence could be vital. It doesn’t take much now to be well-positioned for the future.

“If a company’s not using it, I think they’re missing a very good tool,” he says. “I think they’ll regret not getting in now.”

What About Twitter?

The social media boom started with Facebook, but it’s since been complimented by Twitter. Created in California in 2006, Twitter is an online networking site that allows members to post comments up to 140 characters instantaneously. These posts are called tweets, and can be accessed by searching Twitter by a poster’s name (called a handle), or by following them and receiving their content. Twitter allows members to follow or be followed by anyone. With no service fee, the site works like text messaging on steroids.

The problem for the aftermarket is “What do we tweet? And to whom do we send our tweets?” At this point, most distributors and repair garages are uncertain.

Of the companies interviewed for this issue’s cover story, only Stoops Freightliner and Kenworth Sales Company have created Twitter pages. Both of them are truck dealerships. Stoops uses the page to relay information posted to its Facebook page, and Kenworth Sales Co. has only tweeted twice — an introductory hello and a Happy New Year tweet. Both companies want to reach customers; they just don’t know how to find them on Twitter. They’re not alone.

“I would definitely use it if I could figure out how to use it,” says Matt Pringle, marketing manager at CRW Parts. “It’s still so new. I don’t know what we can do with it right now.”

Shane Crook, Stoops marketing manager, feels the same way. He’s tweeting information to anyone who follows Stoops Freightliner. The information is repurposed from Stoops’ Facebook page, but Crook thinks it’s a start. It’s still a way to promote Stoops’ business, he says.

But past that use, aftermarket companies are at a loss. Facebook has a visible direction as a marketing tool for the industry. Twitter is a wild card. Companies are going to use it, but how they will do so is still up for grabs.

2010 was a better year than 2009, but still not on a par with previous years. Cost control and an uptick in freight helped distributors, repair garages and dealers, but real recovery won’t come until the construction markets are strong.

F or many distributors, repair garages and dealers, 2010 was a relief after the struggles of 2009. In fact 67 percent of Truck Parts & Service readers responding to a survey sent out in December say that overall sales will be up in 2010. And 27.3 percent of that number say business will be up 10 percent or greater.

Henry Cook, president of Cook Brothers Trucks and a 2010 Distributor of the Year Finalist, says, “We had our best year ever. We have been working hard, pumping more money into the business, and it has been growing.”

Dave Scheer, president and CEO of Inland Truck Parts, says that although the first two months of the year were soft, things really took off in March. He attributes Inland’s success to a strategy of focusing on certain product groups and promoting them to its customers.

Cook, who has managed through four recessions, knew that customers would cut back on their own inventories and that many of his competitors also would reduce inventory levels and cut services. To set Cook Brothers apart, Cook actually beefed up inventory at his branches, investing $1.5 million more in inventory, and he did not curtail any services.

We should start seeing some better results in 2011.

“Customers will not accept back orders because they do not have any safety stock of their own so they will hunt until they find what they need,” he says. By focusing more on fill rate than turns, Cook was able to improve marketshare.

Mastering new technology will allow a distributor, dealer or repair garage to be seen as the go-to technology expert.

Brandon Ford, director of marketing for Power Train, the 2009 Distributor of the Year, also saw customers reducing inventory and says that caused Power Train to pay much closer to its own inventory. “We had to know exactly what we had on the shelf and know exactly when its replacement was going to be in,” he says. “If we didn’t have the part we would lose the business. There are very few customers who will wait and keep their truck in the garage simply for one part because this is a saturated industry and they will get the part someplace else.”

Don Purcell, owner of Stone Truck Parts and a 2010 Distributor of the Year Finalist, galvanized his staff with the theme “We have got to make it happen in 2010.” Keith McLemore, Purcell’s partner, says they realized that nobody else was going to help them and if they wanted to have a successful year, they had to take steps to make it happen.

“We did an excellent job in creating manufacturer relationships and also with being product focused and understanding our customers’ needs.”

What To Expect In 2011

No matter what kind of year 2010 was, everyone is hoping 2011 will be even better.

Technology and training will continue to be important for success in the future.

Bob Johnson, vice president aftermarket, Bendix Commercial Vehicle Systems, says they are expecting 2011 to be a little more stable than the previous two years with a moderate uptick in the truck build as well as in parts and service. “It is my belief that as long as the economy and the industry continue to stabilize, dealers and distributors should expect a modest increase in 2011 in all aspects of their business.”

Kyle Treadway, dealer principal, Kenworth Sales Co., is finalizing his dealership’s 2011 business plan and says, “We are gauging our recovery on a broader base of specialty markets. We continue to watch, listen and learn from traditional customer segments, as well as new ones we developed over the course of the past 30 months.”

Industry experts like Eric Starks, president of FTR Associates, are forecasting a 3.5 or 4 percent increase in freight for 2011. He explains that in an average year you would see something in the 2 percent range but adds, “We are coming off such a low and with the way businesses have restructured, cut their costs back, been reluctant to add resources and with the fundamental growth in demand we should start seeing some better results in 2011.”

Cook believes parts sales will continue at a brisk level in 2011, however when new truck sales get to the 225,000 level, he says there will be a slowing in the growth of parts sales because the truck population will start to get young again.

“The age of the vehicles out there now is quite old, therefore, parts sales are skewed to those older aged vehicles. When fleets start putting new vehicles in service and retiring older trucks, there will be less of a need for parts.”

Jim Pascale, president of Pascale Service Corp., and a 2010 Distributor of the Year Finalist, thinks the year will get off to a slow start, but will improve. He says the speed of the recovery will depend on what the government decides on tax issues and health care.

Parts availability may be an issue going forward if demand for new trucks increases.

“It also will depend on geography. Here in the Rhode Island area the business climate is very bad. It will take longer for this area to recover.”

McLemore is upbeat about this year. “We want to be optimistic and every month that goes by we get a little more optimistic so now we are thinking about things like new geographic locations. Things like that were not even on our radar screen 24 months ago.”

Investments in technology and training will continue to be important. Johnson says, “Everyone will need to keep their techs well educated and informed. They can help themselves be the ‘go-to’ technology experts through a continuous battery of training along with a heightened awareness of the latest vehicle advancements.”

While many people complain about the cost of investing in technology, John Arscott, president of The Pete Store, takes a different view. “When I hear that I have to invest $30,000 in a tool, I am happy because I know that everybody can’t.”

Pascale also sees new truck technology as an opportunity for his business. “We are getting more involved with selling diagnostic equipment used in the repair of electronic engines, ABS and automatic transmissions. Our customers will need these tools if they are performing their own repairs.”

In addition, his shops are “tooled up to diagnose and repair the new electronic engines and automatic transmissions and we intend to continue this in the future.”

Bill Wade of Wade & Partners, has concerns about whether the independents have made the investments they need to make. “I wonder how many of the independents have really paid enough attention to be local experts. Being the local expert is how they got where they are today. And they need to be the local expert in the future because pushing boxes doesn’t get it done.”

Ford explains that Power Train came to the realization that the aftermarket is a few years behind when it comes to investing in technology and decided that it was time to catch up. “That is going to be our focus for the next several years. We want to make sure Power Train can be a leader in the aftermarket,” he explains.

Wade believes going forward that the traditional compensation system for distributors will change. “The idea of paying somebody a percentage to handle boxes is obsolete. There are five guys in any town who can handle the box, but only one guy in town who can answer the questions.” Presumably, whoever can answer the customers’ questions will be the company most sought after by suppliers.

Some Concerns

One cloud on the parts and service horizon is parts availability. Just as some distributors, repair garages and dealers cut back on their parts inventory, according to Allen Phibbs, professional advisor, Keith Ely & Associates, suppliers cut back production as well. He explains that there already have been shortages of tires for trailers and he thinks that is just the beginning of the problem.

“We have seen this with several manufacturers, where they are not able to supply enough parts, or in some cases any parts,” Keith Ely, managing partner, Keith Ely & Associates, says. He explains that he is seeing this with engine parts and drivetrain componentry.

“It is not necessarily because the demand on new products has picked up dramatically. It is just that vendors have cut back far enough that they are not able to supply the dealer and the OE at the same time.”

Rick Reynolds, president of Peach State Freightliner, is very concerned about this issue and says it is preventing dealers from properly servicing their customers. “There are issues with engines, transmissions and the secondary and tertiary component manufacturers. This just backs up the system. And all it takes is one thing to make the whole process come to screeching halt. But at the end of the day freight still needs to be moved.”

Pascale shares this concern. “As the OEM manufacturers are starting to build more trucks, this will cause a shortage of replacement parts for aftermarket distributors.” Another problem will be price increases for these parts, he says. “Prices are increasing as we speak. These types of price increases contribute to inflation, which in turn can cause slow economic growth.”

Cook Brothers is used to dealing with long lead times for parts because it sells quite a few private branded products. “We are a little bit more used to the longer lead times and I am not quite as concerned, Cook says.”

Ford has seen parts shortages and says, “vendors are doing all sorts of things with putting closer restrictions on credit lines or increasing the prepaid freight amount.”

He continues, “In addition, the back order line pops up a lot more often that it used to and that is frustrating from a sales standpoint because it usually means the customer is going to go somewhere else and find the part.”

For Scheer the independents’ ability to access to information is an obstacle “because the OE channel is attempting to block our access to information to not only sell parts but to work on customers’ vehicles.”

Scheer is actively involved with the Right to Repair issue and hopes that something can be worked out without having to resort to legislative action.

Predictions For 2012 And Beyond

Forecasting for the short-term is easier than looking further out, yet distributors, dealers and repair garages need to take a longer view. When asked about business conditions for 2012 through 2015, Starks said, “Those times should be good relatively speaking. We sit here and say there is a lot of downside risk to the economy in the short term, but I think longer term, there is some upside opportunity so we could see the economy growing at a much faster pace.”

On the truck sales side, for 2012 Starks is calling for a “nice increase.” He adds, “We would expect the small- and medium-sized fleets to be in the market, which will help.”

In addition, he expects to see some construction market activity, which also will help improve parts and service volumes. “We are pretty bullish relatively speaking about 2012,” Starks says.

Johnson, shares Starks view and cites the fact that the American Trucking Associations is expecting freight to increase 30 percent between now and 2020. “This is truly good news for the dealer and distributor segments. If they continue to put forth a balanced business through a potent mix of parts and service, the next three to five years should be a very positive business environment for them.”

But there are some issues that could change these forecasts. On a practical level, Purcell believes that a lot of fleets will look at refurbishing equipment that is already in the field rather than purchase new. “There is opportunity out there, but the challenge for us is to make sure that we continue to source component parts for old style engines and older style trucks and trailers. We need to be able to help these customers meet their goals of keeping their overall operational costs down.”

From a big picture perspective, David Gerrard, senior vice president of dealer operations, Navistar, says, “Things that come to mind are how will health care legislation unfold, any potential issues that may continue in the credit market, the whole tax debate and if we are going to dig out of the deficit hole on the backs of small- to medium-sized business. My concern going forward is around things that are out of our control where we still will have to play the cards we are dealt.”

Distributors, dealers and repair garages have grown used to governmental initiatives impacting their business having dealt with emissions reductions for quite some time and will likely continue to do so in the future. Treadway says, “The looming 2014 fuel economy standards are poised to artificially disrupt our standard business cycle once again. We read that existing technologies are sufficient to meet the proposed regulatory standards, but the prior three federal mandates have left us and our customers skeptical about pricing and efficacy.”

To be prepared for whatever the future will bring, Starks encourages everyone in the trucking industry to follow trends. “Pay attention to not only their customers, but to the broader economy and the broader transportation market. And also pay attention to the regulatory environments because that can create some opportunities as well as threats.”

Whatever the future may bring, one thing is certain, according to Ford. “If we continue to do the same things in the future that we are doing today, we will only be as good as we are today. We have to constantly look at making changes and finding ways to improve ourselves.”

Some Numbers To Consider

Here are some recent statistics that help define the state of the trucking industry.

* 269,650 — according to Polk data that is the number of commercial vehicles registered in the U.S. in the first nine months of 2010. That is up 9.6 percent from the same period last year,

* 66 percent — according to Transport Capital Partners that is the percentage of surveyed carriers who expect volumes to increase over the next year.

* 26,005 — according to FTR Associates that is the number of Class 8 orders for all major North American OEMs in November. It represents a 38 percent increase over October numbers and the highest monthly order level since May 2006.

* 524,500 units — according to Polk that is the number of used commercial vehicle registrations in the first nine months of 2010. This historic volume represents 66 percent of the commercial vehicle market and is an increase of 18.7 percent over the same timeframe in 2009.

* 55 percent — according to TCP that is the percentage of surveyed fleets who reported rate increases in the last three months.

* 76,125 — according to Polk that is the number of new commercial trailer registrations during the first nine months of 2010. This is a 42.2 percent increase over the same period last year.

* 75 percent — according to TCP that is the percentage of carriers who remain optimistic about the outlook for future rate increases.

A Move To Information Based Relationships?

Bill Wade of Wade & Partners, thinks we are on the verge of a transformation in the parts distribution business. He believes there will be increased importance on partnering with the right people and forming networks.

He cites eight challenges impacting partner selection:

* Consolidation — Consolidation is continuing for both supplies and the rest of the channel, causing partners to choose sides with each other.

* Channel Subspecialties — Distribution channels will continue to splinter into specialties. Brands within maintenance needs will emerge to fill these narrowing categories.

* Brand Acceptance — Has minimal acceptable quality been defined?

* Marketing Groups — Which of these virtual consolidations will concentrate on things that are important to customers?

* Financial Strength — Who has staying power? What about product liability protection?

* Commitment to The Business — Is this business really important in the corporate portfolio and worthy of their continued investment? Is there a record of steady R&D, facilities, service and marketing investments specifically for heavy-duty trucks?

* Partnership Policy — Is there a sufficient level of institutional trust? Is there a contractual basis for working together that will survive personnel changes?

* Marketing Support — Do partners provide adequate resources to create demand and develop business? n

Newcomers and previous finalists alike are in contention for this year’s Distributor of the Year award.

Now in its ninth year, the Distributor of the Year award continues to stand as the independent aftermarket’s most respected and highest honor. These are the top performing distributors, as chosen by peers, manufacturer representatives and other industry leaders.

The accomplishments of these finalists are even more impressive this year as they have maintained a superior level of performance during tough economic times. They have kept a strong focus on the cornerstones of their successes, while spotting and seizing market opportunities.

Since the June issue, Truck Parts & Service has revealed one finalist each month through question-and-answer style articles, which are available online at www.truckpartsandservice.com.

In this issue, we profile all five distributorships, taking a deeper look at their rich histories, their best practices and their contributions to a stronger aftermarket.

Please join us in congratulating this year’s finalists:

* Henry Cook, Cook Brothers, Binghamton, N.Y.;

* Jim Burke, Drive Train Industries, Denver;

* James Pascale, Pascale Service Corp., Pawtucket, R.I.;

* Keith McLemore and Don Purcell, Stone Truck Parts, Garner, N.C.; and

* Steven Stich, Wheelco Truck & Trailer Parts, Sioux Falls, S.D.

The winner of the 2010 Truck Parts Distributor of the Year will be announced during the 2010 Heavy Duty Aftermarket Week in Las Vegas, Jan. 17-20.

In conjunction with the Distributor of the Year program, Randall-Reilly, the parent company of Truck Parts & Service, has created the Randall-Reilly Educational Project. Twenty percent of all net display advertising revenue in this issue will be contributed to Northwood University as funding for its Heavy Duty Parts and Service Management Program, a two- or four-year ongoing degree-granting program, that helps cultivate the aftermarket leaders of tomorrow.

— Denise Rondini, Executive Editor

Re-establishing Dominance

Cook Brothers is now stronger than ever having learned lessons from some unfortunate decisions in its recent past.

Rebuilding your business’ reputation is not the easiest thing to do, but apologizing for your actions while at the same time fixing the problem is a good first step. That is what Henry Cook, owner of Cook Brothers, did after he purchased the company back from TransCom, which tried to apply automotive parts distribution techniques to the heavy-duty parts arena.

Bob Seyerlein (left), vice president of sales; Michael Venuti, vice president of operations; and Henry Cook, president, constantly check in with customers to make sure Cook Brothers is meeting their needs.

After getting his business back, Cook says he did three basic things. “The first thing was I put $1.5 million more parts inventory into the branches in a six-week period. I did radio commercials apologizing to our customers for any disruption the TransCom experience brought to their businesses and I went to see every single customer who had done more than $20,000 of business with us in 1997 and personally apologized to them and asked for their business back.”

By doing those three things and because he did not lose any of his branch managers during the TransCom experience, Cook took a business that was losing $125,000 a month “and we righted the ship in four and a half months.”

Lessons learned leads to growth

Today, Cook Brothers is growing its business by taking market share away from its competitors, in part due to lessons learned in its past.

Instead of reducing inventory when business slowed, Cook actually added $780,000 of inventory at the branch level. He did this because he had paid attention to previous down cycles in which customers reduced their stock levels as did other parts distributors.

“The product disappears from the pipeline then when the customer wants the product it is not available locally as easily as it was and he has to hunt for it because he can’t have a truck down.” By adding inventory, Cook positioned the company to be able to fill customers’ needs.

He also did not decrease parts delivery cycles. “We told our branches that even if you are going out with just a few things, keep up the normal delivery cycle and that has paid off.” Cook also ensured that his Binghamton, N.Y., headquarters location had plenty of inventory for overnight replenishment of the branches. “Our sales grew this year,” Cook says. “This year our sales are up almost 15 percent.”

Cook also has grown the business by adding industrial product lines to his product mix. “I am talking about things like fasteners, drill bits and abrasives,” he explains. “Those are products that our customers use, so why shouldn’t we sell them?”

Milk haulers, schools, municipalities, independent garages, small fleets, owner-operators, private fleets and the Marcellus gas field are among the markets Cook Brothers serves. Cook sees the gas-field business as one growth opportunity. The gas field is located along the New York-Pennsylvania border and drilling has begun on the Pennsylvania side. “They don’t allow drilling in New York yet,” Cook says. “But at some point they will. The gas field has brought an increased number of trucks into the area and without a doubt has helped our business.”

Product expertise

Cook Brothers positions itself as a generalist and carries an extensive list of products. Recognizing that it is impossible for a salesperson to be well versed in every product — especially the more technical lines — Cook established product managers for lines like rear ends, transmissions, auxiliary power, driveline and hydraulic hose and fittings. “These can be very difficult for a salesman, especially a newer salesman, to grasp. It is easy to grasp brakes or filters or lights, but we stock more than 134,000 SKUs and it becomes difficult for people to handle.”

The product specialists are on hand to back up the salesperson and provide the technical assistance that may be needed to make a sale.

Product managers are considered part of the corporate payroll and are not charged to the branches. “As far as the branch managers are concerned, it is like having a free employee to help them sell,” Cook says. “We have many instances where the salesman acts as a bird dog and when it comes time to close the sale, we send in a specialist.” After that it is the salesman’s responsibility to service the account.

Cook believes that having product specialists on hand gives his sales staff confidence to sell products they might not completely understand. “He is not going to let himself look stupid but if he has backup to handle it for him, he still comes out looking like he knows something because the customer gets the right part.”

Training is another area that gets a lot of attention at Cook Brothers, and product specialists assume responsibility for some of the training.

It’s all about the customer

Cook Brothers carries an extensive inventory of products which includes more than 134,000 SKUs. Although he purchased a truck dealership, Henry Cook, president of Cook Brothers, does not let “iron sales account for more than 35 percent of our total sales.”

Product specialists are just one way Cook Brothers tries to make sure it is meeting the needs of its customers. Cook and his management team of Bob Seyerlein, vice president of sales, and Mike Venuti, vice president of operations, are constantly checking in with customers to get feedback. “We do not have an official grade system, but we are thinking about that. However, we want to make sure we get our customers’ feedback on how we are doing in meeting their needs.”

Cook adds, “We constantly adjust our business to what the customers want us to do, and customers are smart.” He says Cook Brothers has to be competitive on pricing but that just lowering prices is not the answer. You also need to have an acceptable order fill rate. “The way we have things set up is we can call on all our inventory at each of the stores every night and get the customer the part the net morning.”

In order to be better able to communicate with its customers, Cook Brothers is in the process of changing its operating system to one that is being custom written. “We are going to be able to communicate more with our customers,” Cook says. “Our customers will be able to see our stock levels. They will be able to get pricing and they will be able to order on the Internet 24 hours a day, 7 days a week.”

Additionally, Cook Brothers has gone to a PDC concept and bought land and a building that serves as a central warehouse. “We deliver to all the stores every night. I have never cared as much about inventory turns as I have about fill rate. It is my belief that you can’t successfully run a business on A item sales. A item sales are driven by B, C and D item sales. What drives your profitability is if you get the D, C and B sales, the A sales come right along with it.”

Cook is not afraid to invest money to meet his customers’ needs. In the last year they have added a parts distribution center, a driveline shop at one of the locations, a hydraulic hose truck and a mobile truck to service the gas fields and added a line of industrial products.

“We invest money trying to do what customers need,” Cook says. “We want them to buy more from us, so we are going to solve their problems. We are not just going to save them money in buying the parts. We can save them money by reducing their inventory investment and decreasing their downtime.”

Name of Company: Cook Brothers

Headquarters Address: 7 Walter Avenue, Binghamton, N.Y. 13901

Web site: www.cookbrothersco.com

Founded: 1918

Owner(s): Henry Cook, Bob Seyerlein and Michael Venuti

Number of Locations: 9

Number of Employees: 152

Moving To Improve

DriveTrain Industries used a move to a new location as an opportunity to improve.

Moving after 35 years in the same location can seem like a daunting task. Or it can be an opportunity to improve your operation. That is what Jim Burke, president and CEO of Drive Train Industries, and his management team did when faced with the relocation of its Denver, Colo,. headquarters.

Modern and archaic at the same time

Before even searching for a new building, Burke and his team spent time looking at their suppliers’ distribution centers. “We went to Meritor’s facility, SKF, Gates and even to Subaru’s automotive parts warehouse in our town,” Burke says. “These guys are on a larger scale than we are and their facilities are more sophisticated and automated, but it did give us some good ideas.”

Jim Burke, president and CEO of DTI, says that success is about more than just selling parts.

Burke’s old location was a mix of old and new. “Our building was old, everything in it was old,” Burke says. Parts were stored on shelves, which were built out of cinder block and plywood. “It was very simple and easy to use, the only problem was it was a very inefficient way to store inventory.”

On the other side of the spectrum was the fact that Drive Train had developed its own warehouse management software, which was quite sophisticated. “So while our shelving was archaic, we had RF equipment, all our inventory was bar coded and location driven. Parts were put on the shelf by location rather than by manufacturer’s part numbers.”

The new facility, while having a smaller footprint, actually was taller with a ceiling height of 26 feet compared to 12 to 15 feet at the old location. “If you look at it from a square footage standpoint, we have less square footage, but if you look at it from a cube standpoint, it actually is a bigger building,” he explains. That meant larger parts could be placed on pallet racks that were stacked almost to the ceiling. “We really picked up a lot of efficiencies in that area.”

Burke chose to use several different shelf sizes in the new warehouse, including ones that were 12-. 18- and 24-inches deep. Additionally, Vidmar cabinets on rollers were used to store small parts. “Previously we had cardboard bin boxes in the warehouse. I do not even know how many thousands of bin boxes we had,” Burke says. Unfortunately, the majority of those bin boxes were less than 20 percent full. “With the new cabinets we were able to put as many as 30 to 40 part numbers in one cabinet where we had 30 to 40 bin boxes taking up 20 times the amount of space that one drawer took up.”

To improve efficiency in the new warehouse, Drive Train employees organized parts on shelves based on size, not by who made it or what the part number was.

Prior to the move, all parts were measured and tagged to indicate which size shelf they would be placed on at the new facility. When it was time to move, Drive Train employees went through the old warehouse gathering all the parts that would be going on 12-inch shelves, followed by those that would be on 18-inch shelves and finally those that would placed on the 24-inch shelves.

Once the parts were in the new warehouse, they were scanned and the new locations were entered into the computer system. The moving process began the Friday before Labor Day weekend in 2009 and by the Tuesday after Labor Day, Drive Train was open for business.

A diverse customer base

The improved efficiency at headquarters helps Drive Train better serve its customers. “Our customer base is very diverse,” Burke says. “Our biggest customer accounts for less than 1.5 percent of our total sales.” Among the types of accounts Drive Train serves are trash haulers, municipalities, construction, oil, natural gas, coal and ski areas. “You name it, we do it,” Burke jokes.

Drive Train Industries’ new facility allowed Jim Burke, president and CEO, and his management team to improve parts storage as well as the company’s overall efficiency.

Such a diverse base presents challenges with making sure there is enough technical expertise in house to serve the various niches. As a result, training is very important. Drive Train mainly counts on its manufacturers and suppliers for new product training, but it also conducts in-house training. “We train our own people so we have experts who can help our counterpeople understand what is going on.”

Training also is available to customers. “We bring them value by supplying them with information they need to stay on top of what is going on in their business,” Burke says. For example, Burke trains Drive Train customers on air brakes. “I am one of the few guys out there who still has working air brake boards that I use for training purposes.”

Burke sees opportunities in the market as well. The energy market — which had trailed off — is starting to come back. “With the new drilling techniques that allow oil to be extracted from areas that were not reachable before, it is a growing business for us.”

Technology is vital

While Drive Train uses technology quite effectively in its warehousing, Burke sees areas where the company needs to improve. “We need to focus more on our web presence and trying to do a better job of utilizing the Internet for parts sales,” he says. But he is quick to add that he is not necessarily talking about going after parts sales from someone in Florida who it trying to buy parts. “We want to allow our customers the ability to order on-line. We want them to be able to check our inventory on a Sunday night, find out that we have the part they need and place the order so that the part is there on Monday morning waiting for them.”

By using 12-, 18- and 24-inch deep shelves along with storage cabinets, Drive Train made better use of warehouse space.

Burke also is looking at software that will assist with routing Drive Train’s delivery drivers throughout the city “so that we can deliver to our customers as efficiently as possible.”

Another area where Burke believes Drive Train needs to leverage technology is in the area of customer relations management. Burke is looking for a solution that will integrate with his business system and help manage the sales function. Currently, Burke can generate a report at a specific request. “The potential of a really good CRM package is that it can give you information to be proactive — here is a red flag you need to address right away with this customer before it turns into a real problem.”

More than selling parts

Having knowledge of its customers and their concerns as well as having the in-house experts to deal with the needs of its diverse customer base, is a strength of Drive Train Industries.

“In pretty much every one of our core product areas we have internal experts, somebody who knows that product line, can troubleshoot, solve problems, make suggestions, help a customer,” Burke explains. “We are not just selling parts. We are supporting the part as well, so whether it is fluid power or gearing or driveline or brake or lighting or electrical — any one of those areas — somebody internally can answer questions and assist the customer.

“A lot of our competitors can sell the part at a cheaper price, but when there is a problem they have to go to the manufacturer for assistance,” Burke says. “We don’t rely on the manufacturer. We are the ones who back up the products we sell and help the customers.”

Name of Company: Drive Train Industries

Headquarters Address: 5555 Joliet Street

Denver, Colo. 80239

Web site: www.dti-inc.com

Founded: 1945

Owner(s): 100% Employee Owned (ESOP Corporation)

Number of Locations: 10

Number of Employees: 137

Engineering Success

Pascale Service Corporation’s investment in engine expertise helps the company overcome market challenges.

In a competitive market — where your market area at most is a 30-mile radius from your location because customers won’t travel any farther for parts and service — James Pascale, owner, Pascale Service Corporation, has been able to keep the business his father started in 1945 thriving.

Engine expertise and outreach

One factor that has lead to the company’s success is its expertise in electronic engines. “We try to put our emphasis on being better at that kind of thing,” Pascale says. “A lot of people don’t like to do that business because it is so hard”.

Jim Pascale (left), president of Pascale Service Corporation and Mike Toye, parts manager, make sure all fast moving parts are always on the shelf and available.

While Pascale Service performs general repairs as well, its expertise in engines is what brings small fleets, municipalities, fire departments and construction companies to its 10,000-square-foot shop in Pawtucket, R.I. Pascale Service is an authorized Cummins and Caterpillar parts and service dealer and can perform warranty work on these engines. It also specializes in International engine repair.

Despite this expertise, one of the challenges Pascale faces is attracting customers from a wider geographic area. “We are in a funny area, people don’t like to travel. Literally they won’t go 20 miles out of their way for service,” he says.

“We are in the northern part of the state adjacent to Massachusetts and if you go to the other side of Providence, which is about 10 miles from here, they consider it a long haul to travel 15 miles. They have to have a really good reason to bring their vehicle up here.”

In order to reach customers at least to capture their parts business, Pascale Service runs parts delivery trucks in the 30-mile radius where it is dominant. “That is mandatory. But at 30 miles we have to beat the bushes to get the business in here. Service work tends to stay even closer within 10 to 15 miles.”

Technology and training investments a must

One of the things that prevents many companies from getting heavily involved in engine service is the investment needed to keep current. Pascale says that whenever the newest engine diagnostic tool comes out, he purchases it. “It is impossible to work on these things without the proper equipment, computer programs and the training.”

Pascale Service uses parts delivery trucks to reach customers who won’t drive more than 20 miles for parts.

Pascale adds, “It is very important to get our guys trained on how to use the equipment. It is ok to buy those computers, but if you don’t know how to use them, it is worthless.”

As a result, Pascale calls training semi-mandatory. He explains to his employees that if they expect to get pay increases, they need to get certified. “With Cummins certification is mandatory. You have to be certified for each engine you sell parts for.”

Pascale is so committed to training that he pays his employees for the time they spend training. He explains that Cummins had a virtual college DVD that his technicians can complete on their own time.

“They all have time limits. For example, it may be a three-hour course and if they do it at home on their own time, I will pay them for three hours at 50 percent of their pay rate.” Cummins reports test results to Pascale and if the technician has passed, the money for the time spent taking the test is added to his next paycheck.

Pascale Service has 25,000-square-feet of parts storage. That along with cooperation between the parts and service departments ensures customers’ needs are met.

The same holds true for ASE tests. “If they want to take the master technician test, I will pay for them to do so,” Pascale says. “If they pass it, I will pay for it every time they need to be retested too. It is just a good incentive and most of the guys love it.”

The importance of teamwork

In order to ensure that customers’ needs are met, Pascale Service’s parts people and service technicians must work closely together. “I just insist that everyone get along. We don’t have the ‘us and them’ attitude.” When a vehicle comes in for service, someone writes up the estimate for the work. The technician develops a parts list, which goes to the parts person who will go into the shop to talk to the technician about what he needs. “This way there are no mistakes.”

Pascale helps foster this spirit of cooperation through an incentive program, but he is quick to add, “I just make them understand that if they are working as a team, the company will prosper.” Pascale and the parts manager and service manager monitor the interactions to make sure problems don’t develop.

A little diversification

While service expertise is important to Pascale Service’s success, parts also play an important role. Pascale says they do a good job of keeping a wide array of products in stock. “Truck dealers put a big emphasis on selling trucks and not on parts. We have a broader range of products where truck dealers don’t,” he says.

“I think the person who can get the part in the quickest amount of time will get the business. Price is important, but not all the time. If it is a really badly needed part, you can pretty much get what you need for it as long as you get it on time and it is the right part,” Pascale says.

As a result, Pascale Service has two floors and a storage area of 25,000 square feet and carries more than 100 related product lines in inventory. “We try to keep good, fast moving parts here. I think we probably have more than we should, but it is important to have it here.”

Another way Pascale Service has diversified is by adding custom fabrication of hose and pipe to its offering. It specializes in crimping all types of hoses, plus bending and forming metal tubing from 3/16-inch to 1-1/4-inch. Pascale Service can do custom fabrication and production work for automobiles, trucks, buses, farm, industrial, marine, mining, construction, forestry, chemical, manufacturing, instrumentation, sports vehicles and much more. It manufactures hydraulic hose assemblies, metal tube assemblies, air conditioning assemblies, power steering assemblies combination hose and tube assemblies. “It is a little niche that we have and it is a nice profitable end for us,” Pascale explains. “We do so many different things here. People will come in if they need hardware or need a hose made.”

Pascale Service also has electrical test equipment to determine the condition of starters and alternators. And it also provides technical information to customers who purchase parts for their own repairs. “If they are going to do their own repair, we want to make sure they do it correctly, so we help them by providing technical information. This way if they buy the part from us, they will install it correctly and won’t ruin it.”

The importance of reputation

In such a small market area where everyone knows everyone else, reputation is very important. “I have had people tell me ‘you guys have a good reputation.’ If we do something wrong, we take care of it and we try to solve problems,” Pascale says.

“If a truck comes in here with a technical problem, we will do everything we can to solve it. We are known for that. It is hard to keep that level up, but I like to hear it when people say ‘you guys are the best around.’ That is nice to hear.”

Name of Company: Pascale Service Corporation

Headquarters Address: 51 Delta Drive, Pawtucket, R.I. 02860

Web site: www.pascaleservice.com

Founded: 1945

Owner(s): James Pascale

Number of Locations: One

Number of Employees: 20

Filling A Need

Stone Truck Parts helps satisfy employee and customer desires for a strong regional distributor as an alternative to national chains.

Realizing there was a need for a strong regional distributor in North Carolina, Keith McLemore and Don Purcell left their positions at a distributorship that had been part of the consolidation that took place in the 1990s to form Stone Truck Parts in 2003.

Little did they know that the truck parts industry was headed for some of the toughest times it had ever seen.

A regional need

While the consolidation of the truck parts market resulted in several large national chains, McLemore and Purcell came to realize that it had left a gap in the market for a strong regional distributor.

Keith McLemore (left) and Don Purcell started Stone Truck Parts to better serve the North Carolina market.

“We got back in the business with a goal of focusing on the North Carolina marketplace,” McLemore says. “We knew we had to have multiple locations and we did that pretty quickly so people would see that we had a good footprint and presence in North Carolina.”

But locations are not the only thing that makes for a strong regional distributor, according to Purcell. You also need “quality people, product depth, product mix, training and market knowledge.”

“That gave us a distinct advantage back in 2003 when we started this.” Purcell and McLemore also believe that being regional gives employees something to feel part of.

“That was one of the things we felt was missing. The employees did not have anything to belong to anymore because the big national chains had made it so impersonal,” McLemore says. “They did the same thing on the customer side. Customers did not have anybody that was really looking out for their best interest.”

Being regional rather than national gave Stone Truck Parts the flexibility to respond quickly to customer problems. “They did not have to go through three or four levels of management to get something done,” McLemore explains.

The right people are key

If being responsive to customers’ needs is a goal, then you need to make sure you have the right people in the right positions. “You must have talented people on board who have an understanding of the customers’ needs. That is critical,” Purcell says. In addition, they need to know the competition and understand the products they sell.”

Starting with an empty warehouse in Raleigh, N.C., Stone Truck Parts has grown to three locations in a short time.

This means either recruiting from the outside or bringing young people in and doing extensive training. “We do this and it allows us to make sure that our people answer a customer’s needs when they come up,” Purcell adds.

And while ensuring that the new talent continues to come into the industry is tough, Purcell and McLemore “are working pretty hard at it to see if we can keep the pipeline filled with young kids coming in the door,” McLemore says.

Both Purcell and McLemore wish they had put more emphasis on recruiting young people in the early days of Stone Truck Parts. “We are just now really getting to attract some of the younger guys,” McLemore says. “We are finding more success with some of these younger guys. They are a lot more open minded and creative.”

Training takes on increased importance

While training is important in every organization, it takes on more urgency as you strive to bring young people into your business. To ensure that their staff is properly trained, McLemore and Purcell have branch level training weekly, ride-alongs with manufacturers’ reps and bi-monthly sales meetings for all outside salespeople and managers. “We usually request that the manufacturer send an engineer or other technical person — someone above a standard field rep — to train our staff,” Purcell says.

In addition, Stone works with the North Carolina Maintenance Council, which holds monthly meetings.

Stone Truck Parts invests heavily in training to try to achieve 100 percent customer satisfaction.

“We dedicate time and money to training to make sure our people are adequately trained,” Purcell says. Technical training is not the only kind of training in which Stone participates. “We are doing some management training now. We pull these guys out and send them to class during the day,” McLemore explains. “We just realized that they are the future and we have to expose them to more things. Most of these young guys are like a sponge; they are sucking this stuff up and are very appreciative of it.”

100 Percent Satisfaction

The investment in training, market knowledge and the proper product mix are all designed to do one thing — satisfy the customer. “We believe a rule of thumb is 100 percent customer satisfaction,” Purcell says. “When I say that I mean you don’t substitute any products, clarification and speed of handling warranty, core management — all facets of what makes this business what it is.

“We put all those things together and we say 100 percent, but in reality we shoot for the high 90s in terms of customer satisfaction.”

Stone has a call-back program in which a customer is called the day after he places an order to make sure he got his order and that it was accurate. “This is something kind of new for us,” McLemore says. Purcell and McLemore looked at it a couple of months ago as a way to differentiate Stone Truck Parts from its competition.

“We believe customer satisfaction is key to us, McLemore says. “Relationships aren’t any good unless you can solve that guy’s problem and take care of what he asks for. We are trying to follow up on that and make sure we are doing it.”

A wide and changing customer base

While trying to guarantee customer satisfaction can be difficult, doing it across of wide variety of customer types presents even more challenges. Yet Purcell describes the customer base for Stone Truck Parts as “everybody with a Class 6, 7 or 8 vehicle that is registered in the state of North Carolina.” This includes waste, livestock and lumber haulers, flat beds, dedicated carriers, over-the-road vehicles and construction operations.

“We categorize customers by customer type but we have found that customers are becoming more diversified,” Purcell says. “We may have a customer who has 10 dump trucks but then also has 10 over-the-road tractors.”

Another change Purcell has seen in the market is customers’ desire to ensure they are dealing with financially sound companies. “They want to deal with companies that can provide the value-added service they need. It is not just about price. Customers now are looking for something more than just price. They are carrying less inventory so they expect you to have the part when they need it.”

Looking to the future

Stone Truck Parts has seen rapid growth to three locations from its inception in 2003 and expansion is likely again in the future. “We probably should open a bigger warehouse,” Purcell says. “One of our biggest challenges right now is that we are out of space. We are not struggling, but we are in a situation now where we need to broaden our inventory so we need bigger warehouse space.”

McLemore adds, “We always have new locations on our radar screen. With 2010 getting a little better, it is making us open our eyes again to take a look at some of those locations and how quickly we can get some of them done.”

Name of Company: Stone Truck Parts

Headquarters Address: 1329 Management Way, Garner, N.C. 27529

Web site: www.stonetruckparts.com

Founded: 2003

Owner(s): Keith McLemore and Don Purcell

Number of Locations: 3

Number of Employees: 55

Responding To Customer Needs

Wheelco Truck & Trailer Parts incorporates its business philosophy into the company logo.

Ask almost any business owner and he will tell you that the customer is the most important thing. But Steven Stich, owner of Wheelco Truck & Trailer Parts, has made this commitment his business motto — Customer Driven — and has incorporated the phrase into the company’s logo.

“Customer driven is our belief and as long as we continue to re-evaluate their needs and exceed their expectations, we will be successful,” Stich says.

Follow your philosophy

Wheelco was started in 1961 by Stitch’s grandfather, who saw a need for heavy-duty independent parts distributors and service garages to serve the construction and trucking markets in Sioux Falls, S.D. Stich, who joined the company in 1993 and assumed control of the company in 1997, has taken pains to keep the customer in mind while growing the business from one location to five.

Steven Stich, owner of Wheelco, has always placed the customer first, which has allowed the business to expand from one location to five.

In the mid-1980s, Wheelco added a radiator repair facility to its headquarters location, but that turned out not to be the wisest decision. “The lesson we learned was don’t try to be everything to everybody. Products and services need to be added for the right reasons.”

According to Stich, the right reasons have everything to do with “meeting customers’ needs and contributing to their overall success.”

Stich’s adherence to this philosophy must be working, because despite a down market, the company remains profitable. “I consider ourselves fortunate, and if we keep doing what we have been doing in the past, we should be fine. If we listen to our customers, understand their needs and we keep looking for new, emerging markets, our company will continue to be successful.”

The markets Wheelco serves include construction, vocational, fleets, municipalities and repair shops. And while there has been some consolidation in Wheelco’s customer base, Stich does not believe that the reasons for his customers’ purchasing decisions have changed. “It is all about relationships. That has not changed. Yes, there has been consolidation, but the bottom line is: create and maintain the relationships you have with your customers, understand their businesses and what brings value to them and then provide goods and services that fulfill those needs.”

To help ensure that Wheelco is delivering on its promise of satisfaction, several times throughout the year, Stich calls customers and asks them questions to help determine how well the company is taking care of them and to find out what other services Wheelco should be providing.

On the job training

Obviously it takes a well-trained staff to meet or exceed customer expectations. Stich believes the best training his people get is when they actually are on the job learning new skills. “Our people are our organization. It is kind of a cliché, but we devote a lot of time and energy into the development of our employees,” he says. Wheelco employees are cross trained on a regular basis.

Having a full-line of parts and a well-trained staff has allowed Wheelco Truck & Trailer Parts to live up it its motto: Customer Driven.

“It costs us more to do that, but it makes us a better company in the long run.” As Wheelco expands and more positions open up, having people in-house already trained gives Stich a good pool of candidates.

Just recently Stitch took two employees “who were both doing an incredible job for me in two different positions” and had them switch positions. “The company put a lot of time and effort into training them for their current positions, but I feel in the long run by having them cross trained they will be better employees for Wheelco, more well-rounded and will serve our customers better.”

An additional benefit of being able to promote people from within the organization is that “they understand my expectations not only of their positions, but the expectations I have for them on how to service our customers.”

Relying on technology

Technology plays a big role at Wheelco. “It is paramount and is going to be a section of our business that we are going to concentrate on,” Stich explains. Wheelco offers parts sales via the Internet and in fact was one of the first companies that offered Internet parts sales with Karmak.

Wheelco was founded in 1961 by Fay Wheeldon in Sioux Falls, S.D. The company, now owned by Wheeldon’s grandson, Steven Stich, has five locations and employs more than 50 people. The company is opening a new headquarters early next year that includes expanded warehouse space.

“We have been expanding our Internet parts sales on an annual basis,” Stich says. “We have many customers who are on-line with us today.” He attributes the growth of Wheelco’s Internet parts sales to the fact that he is seeing a younger generation of people who are very comfortable with computers and technology entering the industry. “They are very adept at shopping on-line, therefore we have to be there with them and offer them those services,” he says.

“They want real-time information. They don’t want to pick up the phone. They want to be able to point and click to see if we have the part on hand or not.”

Expanding repair capabilities

As part of its efforts to be customer driven, Wheelco is in the process of expanding its repair capabilities by building a 12-bay service center. “Our current shop did not allow us to get our customers in and out in a timely fashion,” Stich says. “I felt the way it was set up was not efficient, so we are expanding and will be better able to take care of our customers.”

When the building is complete, it will double Wheelco’s service capabilities, which include brakes, electrical, driveline, transmission, clutch, exhaust and suspension work. Wheelco also has the capability to cold bend U-bolts in its spring shop and perform hydraulic/PTO service.

Phase two of the expansion, which includes expanding the truck dock, parts warehouse and showroom, lounge and conference area, should be completed by April 2011.

As for future growth, Stich says, “it comes down to understanding the customer and always changing and offering them new products and services.”

He adds, “We are going to continue applying the same philosophy that has made us a success in the past. That is never neglecting the basics and concentrating our efforts on our customers, our employees and technological advances.”

Part of that includes analyzing existing market share with its current customer base and identifying markets that are underserved and therefore present opportunities for expansion.

Name of Company: Wheelco

Headquarters Address: 4904 West 12th Street, Sioux Falls, S.D. 57107

Web site: www.wheelco.com

Founded: 1961

Owner(s): Duane and Steven Stich

Number of Locations: 5

Number of Employees: 52