What’s The Chance This Financial Crisis Was ‘Future-Improving’?
I am a firm believer that visions of a bright future are injurious to those who see nothing but the troubles of the past. Learn from history? Sure. But why wallow in it?
This financial crisis cluttered the beaches with the bones of many survivalist price cutters and marginal players, both dealer and independent. Those who temporarily escaped the volume collapse didn’t survive the savage new rules of financing.
Anyone planning to be around for the next five years needs to be able to combine demographics of our workforce with fleet age curves and consolidation of end users with even more disruptive technologies. Prediction is an ever tougher game.
A positive outlook doesn’t mean a Pollyanna view of universally easy living right around the corner. Ours is a complicated business — sometimes unnecessarily so.
Here are seven precepts upon which you can build your five-year planning vision:
* Size alone is not a strategy nor is a footprint. Geography is falling victim to the virtual availability of product specialization and customer-centric policies and investments. Even FleetPride is only as effective as its local branches make it.
* Fee follows function, and discounts again become discriminate. Suppliers no longer will pay rebates simply on group volume without some proof of marketing effectiveness. Distributors will have to recognize the real value of their growing, healthy customers and begin to ignore the insignificant (but historically favored) few.
* Information is the ultimate pop code ‘A.’ As technology deepens, real value can only be created by those who can plumb its “secrets.” For the independent channel to remain effective, it must upgrade virtually every system.
The best way to forecast the future is to create it.
*VIN tyranny splinters. The dealer who has VIN access today has a leg up — but only on one line of equipment. As serial numbers become more prevalent at the sub-component level, access to Allison, Remy or Hendrickson serial number information will far outstrip the value of the IH or Peterbilt factory VIN.
* War declared by European OEMs. The influence of Mercedes, Volvo and other offshore manufacturers on a tightly controlled vehicle life cycle will cause a real assault on the profits leaking into the independent aftermarket. Can you spell Alliance?
* Tuángòu explodes. This is really the trendy name for Groupon and similar end-user discount purchasing schemes. Once local fleet managers realize this bad consumer pricing idea has lowered the cost on everything from movie tickets to skydiving lessons, they are bound to bring the idea to work. OUCH!
* Net conquers gross. New analytic programs will force all survivors to be able to connect with both suppliers and customers for no-nonsense discussions on ways to eliminate (not spread or redirect) costs in this channel.
There are other trends which seem likely: suppliers joining ranks to minimize shipping and customer service costs, groups becoming significant direct importers and the Internet creating chaos in the channel that we can’t quite put our collective fingers on just yet.
Perhaps Lou Holtz had it right, “Champions know that success is inevitable; that there is no such thing as failure, only feedback. They know that the best way to forecast the future is to create it.”
If we don’t, who will?
Bill Wade of Wade & Partners is author of a book titled Aftermarket Innovation. He can be reached at www.wade-partners.com.
The views expressed in the Guest Editorial are those of the author and do not necessarily reflect the opinions, beliefs and
viewpoints of Truck Parts & Service magazine.