Heavy Duty Distributors Council president Ken Duval says that the industry must find its own technological solutions to remain competitive, and chided suppliers for treating the aftermarket segment unfairly.
“Back in the ’90s downturn (in truck production) the OE suppliers couldn’t sustain volumes. Volumes had to be retained to keep shareholders happy, so many looked to the aftermarket. Nobody stopped to question whether there was a market for all that product.” The result, said Duval, was that there was too much product chasing too few dollars, and prices plummeted dramatically, with the accompanying loss in profitability by distributors.
“Competition boiled down to price and price alone. When OE business returned, WDs began to suffer as product availability faltered. The OE is king of the hill. When times get good, WDs get treated like small potatoes. The heavy-duty distributor is unique, we are our own animals and are different from the auto parts industry.” He said that the key things the industry must continue to focus on are partnerships and retaining value in marketed products. “In order to thrive and survive, we must pay as much attention to our relationships as we do to any other aspect of our business.”
The HDDC also featured a panel discussion on e-commerce, featuring a number of aftermarket representatives.
“It’s having a dramatic impact on relationships between companies,” said moderator Ken Stewart, Fort Garry Industries.
CorBin.com’s Brett Knobloch told attendees that the core-sourcing Internet business–a business unit of Bendix–has been growing tremendously and offers some lessons to others. Knobloch said that Internet enterprises could be anything from simple home pages to experimental e-commerce initiatives and anything in between. “It’s good to have things scattered all across the continuum, but it doesn’t really matter what kind of business you’re in when you’re talking about the revolutionary end of the scale.” CoreBin, which is targeted at streamlining core procurement, can replace multiple phone calls, visits to auctions, and can prevent cores from languishing in warehouses. The key points to the business’s growth are that it solves customers’ needs and provides value, said Knobloch.
Some comforting words came from Ted Evans of the Vipar heavy-duty distribution group. “You probably feel that you are the only one who is not involved and that you are getting left out, but only 5% to 10% of people are actually transacting business.” He did say, however, that as newer, younger people move into the industry, they’re going to be looking for suppliers who can do business electronically. “Vipar processes 10,000 transactions per month (electronically), about $90 million U.S. It does work and people are getting more and more comfortable with it.
“You have a successful way of doing business and now you have people telling you it’s wrong. Well, it’s not wrong to transact business over the phone, but it’s more efficient to do it electronically.”
Steve Knox of Performance Friction offered the attendees some parting thoughts with three simple questions: “Do you do electronic payments at home? Do you do electronic payments for your business? Why not?”