Perspective – August 2007

If it ain’t broke, don’t fix it! How many times have I heard myself thinking that or telling a client something to the same effect. Your product is more than acceptable, your distribution system is working, your customers really like your program, yadda, yadda, etc. Leave it!

And yet here I sit no more than five yards from a group of guys who I actually am paying real money to demolish and rebuild what has been a perfectly good bathroom. And, when they’re done with this, they’ll move to the other bathroom and then to the kitchen.

Neither this second bath nor the kitchen is broken. Yeah, they are 20 years old, some of the appliances rattle a bit, the tile is slightly ugly and the cabinets are dated. But they ain’t broke!

There are at least two important conclusions that can be reached here:

  • I myself will be more than just a little bit broke when this is all over, and
  • I really don’t have much to say about all this.

What does my present distress have to do with the heavy-duty business? On the one hand, not a hell of a lot; on the other hand, quite a bit. Because, in the first case, somebody other than me has decided that it truly is broken-and needs to be fixed.

In the second case, the same thing may well be underway in the heavy-duty arena. From the inside, the heavy-duty distribution system seems to be working just fine, not at all broken. But from the outside, viewed by both suppliers and customers, things may not be nearly as un-broken as they might look from within.

From the supplier’s perspective, legitimate questions can be raised about the value, viability and cost-effectiveness of today’s distribution channels (which look a lot like yesterday’s). Just how much distribution coverage does the marketplace need today? What role does it truly need to play and what is fair compensation for these services?

As specification practices shift (and often disappear), does distribution really play a role here? And, as much of the end-user market continues to consolidate, how much real geographic coverage truly is necessary? And do I benefit from the OES channels battling it out with the independents? Is this really beneficial for the end customer?

Many of the same or similar issues are relevant from the end user/truck operator perspective. If I’m UPS, Overnite, Watkins or FedEx express/ground/home delivery/freight/etc., do I need the same system that served me and the companies I acquired over the last couple of decades? Even if I’m a guy with just a couple of used trucks, do I need the same support and services I needed with my last batch of used rigs?

Maybe I do. But maybe I don’t. If my engines won’t need an overhaul and the gearboxes hold up, maybe all I need is a decent PM/repair facility that will keep my trucks passing inspections, not a full-service high-tech support operation.

What’s the bottom line here? From my perspective, today’s distribution systems are pretty much the same as what we had a decade or two ago with only selective consolidation. But the customer, the truck operator/maintainer-and the products he operates-have both changed a great deal.

Looking at the system from the inside, it may appear structurally and fiscally sound. Looking at it from the outside, as suppliers and customers do, it may be nowhere near as effective and efficient as it now needs to be. It may be broke and it may need fixin’.

What I’ve learned from my inside perspective in the past few weeks is this:

  • It’s not my perspective that counts when the “broke/not broke” conclusion is reached, and
  • I’ll wind up paying to get it fixed.

Could be a lesson for all of us. Happy New Year!

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