The heavy-duty aftermarket had a run on distribution channel news in late May when Daimler Trucks North America (DTNA) and Meritor each opened new parts distribution centers (PDC), and Navistar earned performance awards at three of its North American facilities.
PDC news stories aren’t the flashiest or most eye-catching articles we run in Truck Parts & Service — I think you can guess those are the merger, acquisition and new product announcements — but for most of you, unless an M&A release features your company’s name, I’d bet there are few news items that have a more direct impact on your business than a new PDC.
Think about it. We in trucking like to tout the importance of our industry by telling others that “everything you buy was delivered by a truck.” Well, Mr. Distributor, nearly everything you buy and stock was delivered to your facility from a PDC. Those enormous business park palaces define your inventory and how you go to market.
Just look at how the new DTNA and Meritor PDCs are changing their delivery speeds.
For those distributors reading in Eastern Canada, Meritor’s new location in Mississauga, Ontario, will soon provide you “greater ordering flexibility and shorter lead times,” says Brett Penzkofer, vice president of Aftermarket, North America.
The story is the same in Grimes, Iowa, where DTNA says its new facility will enable the OEM to deliver parts to more than 80 percent of its dealer channel in 12 hours or less. Both locations will feature same-day shipping for parts ordered by 4 p.m. local time and, in the case of DTNA, 5 p.m. for critical and warranty repairs.
If you’re a distributor or dealer served by these new facilities, you know how big of a deal same-day and 12-hour delivery can be. You know what the wait used to be.
Which brings me to a question for you suppliers out there: How fast do you move parts? Can you compete with those two market leaders? And maybe most importantly, if you can’t, then how can you expect your distributors to compete in the end-user market?
I had the good fortune of attending the ribbon cutting at the DTNA facility in Iowa and it is breathtaking. Precision and efficiency at its best. I haven’t seen the Mississauga facility yet, but I have been to Meritor’s Aftermarket headquarters and PDC in Florence, Ky., and it is equally impressive. Both buildings were meticulously built to receive, sort and ship aftermarket parts to get trucks out of bays and back on the road.
For the suppliers out there competing against the Meritors and Daimlers of the world, can you say you’re doing the same?
I think these questions matter because they not only determine how many parts end users can purchase from your distributors, they also significantly impact who is likely willing to sell your parts in the first place. Offering a competitive price and healthy margin is a great way to sign a distributor, but you need constant product availability to keep them.
Competition in the parts channel has never been greater. I wrote in April about how white box and private label parts are undercutting distributor margins by weakening premium brands. Amazon and the e-commerce revolution siphons away more parts purchases each day. The brick-and-mortar distributor is facing an onslaught. They can’t succeed against this competition without you.
When they turn to you for product, they need you to be there — especially if you hope for them to ever rely on you again.