When buying replacement parts, six market trends haveemerged, which are impacting the dynamic commercial vehicle aftermarket. Theseare the forces that are changing how fleets use the aftermarket and how manufacturers,dealers and distributors have begun to respond to maintain customer loyalty.
“The aftermarket has never been more important to NorthAmerican truck operators as they strive to maximize life and uptime from theircurrent fleet of trucks and trailers,” says Joe Mejaly, vice president andgeneral manager, commercial vehicle aftermarket for ArvinMeritor Inc. “With anaverage vehicle age approaching nine years, the fleet manager, with hisdistribution channel for replacement parts, focuses on quality partsavailability and overall life-cycle costs, including appropriate parts support,counsel and expertise.”
With an increased focus on parts, he notes more partssources exist today, particularly low-cost suppliers. But low-cost parts raisethe issue of quality, support, resources, availability and backup––the beforeand after the sale support––that Mejaly says has never been more sought andeven demanded by fleet operators.
Total life-cycle approach
When a truck operator asks about replacement parts, thesimplest advice is to purchase the exact same part spec’ that came with thevehicle from the factory. Yet, that may not always be the best advice, Mejalysays. As they age, trucks and trailers take on new owners and with them, newvocations. A vehicle spec’d for truckload service in the Southeast may now behauling grain over mountain passes in the Pacific Northwest.
Commercial vehicles need replacement parts that are suitedto how and where they work right now. A component that just ‘fits’ a given makeand model may not necessarily meet the customer’s need for performance,longevity, and especially value. Component manufacturers’ field representativesnow have spec’ing software that can help determine which components willdeliver the best performance for the way a vehicle is being used at the time ofrepair.
Terry Livingston, general manager-North America, commercialvehicle aftermarket for ArvinMeritor, talks about the “cradle to grave”approach in which a parts supplier should be able to serve the end-usercustomer with parts if he’s the first owner, or the second or third owner. Inmany cases, he says, the first owner prefers OE only (brand-specific) parts,but the second or third owner will opt for all-makes (no specific brand).
Bob Johnson, vice president – aftermarket sales &marketing for Bendix Commercial Vehicle Systems LLC, believes component specsshould be addressed if the vehicle’s vocational use changes while in the field.“Safety, performance and overall value may be compromised if this is not takeninto consideration,” he says. “When purchasing a replacement part, it’s veryimportant to understand not just what vehicle that part is going to beinstalled on, but how that vehicle will be used. Both of these factors willplay a role in determining the performance of the replacement part, and notevery part supplier has the extensive product application knowledge to help theend user make the right choice.”
According to Randy Petresh, vice president of technicalservices for
Managing customers on “lean”
Dealers anddistributors are looking for strategies to sell to cost-conscious customers,says Mejaly. One element involves inventory—stocking parts that are low-priced,but deliver good performance and value. This can include “OEM-approved” partsthat are made by a third-party vendor, but still meet rigorous performance andmanufacturing standards set by a reputable North American OE manufacturer. ThatOEM may not produce the part, but it stands behind it.
In addition to more prevalent online ordering, manysuppliers now offer vendor-managed inventory (VMI). “VMI can automaticallygenerate recommended orders based on mutually agreed upon objectives andinformation sent by the customer,” Mejaly states. After the VMI system developsrecommended orders, the supplier reviews them and launches the orderingfeature. A purchase order is generated and transmitted from the supplier to thecustomer through the customer’s back-end system.
Livingston continues, “We can and do optimize an outlet’s partsinventory by knowing and assessing specific parts movements, plus we can“re-stock” with the right inventory as to prevent a missed-sale.”
Bendix’s Johnson points out that operational costs arealways a concern for any business, and the commercial vehicle aftermarket is noexception. VMI is an excellent option for many dealers and distributors as ithas the ability to increase inventory turns, reduce customer returns, reduceadministrative costs and reduce lost sales.
Haldex’s Petresh says every customer has a different way ofmaintaining inventory, and with VMI, Haldex can replenish immediately based ontime or stock quantity. VMI is an opportunity for suppliers to refine inventorycontrol for their distribution channels, and ultimately, lower costs to the enduser. “We have an ongoing emphasis,” he explains, “to continuously improve thischannel and streamline the process to make it more effective and responsive.”
Rise of remanufacturing
Rise of remanufacturing
Remanufactured truck and trailer components––the product ofa disassembly, cleaning, rigorous inspection and qualifying including necessaryreplacement, reassembly and testing process––are ideal for customers who wantperformance, service life, and warranty support without the cost associatedwith a new component.
Parts buying decisions shift as the vehicle gets older. Thesecond, third and fourth owners may have different priorities than theoriginal. For instance, truck operators move to price-point products, andeventually heavy use of remanufactured components, to assure high quality.
Mejaly makes the distinction that remanufacturing differsfrom rebuilding or repairing in that the part is disassembled, cleaned,inspected, and any worn components are replaced. The part is then re-assembledto the same tolerances as the original. The result is an exact fit, with nomodifications necessary for vehicle installation. The component is designed andtested to match the performance and fit of the original at a lower cost than acompletely new unit.
ArvinMeritor’s Livingston notes the increase inremanufactured components being offered and adds that reman parts are offeredat a price point as much as 25% lower, but rigid engineering and manufacturingstandards assure their quality for the end-user.
Johnson at Bendix adds that given the broad scope of vehicleneeds and the corresponding budget considerations, reman parts remain a viablealternative to purchasing new products. What’s important to consider, however,is the stability, longevity, and overall expertise of the supplier. “We havebeen offering genuine Bendix remanufactured components for decades,” he adds.The modern remanufacturing process integrates the most current engineering intoeach part, at times enhancing them from the previous generation, he explains.In addition, each reman part includes the same quality inspections as newcomponents, along with the full backing of warranty protection, service, andmulti-level support. A remanufactured product from a reputable supplier offerscustomers a quality product at a reasonable, economical price point.
Petresh at Haldex believes that remanufacturing offers a lotof value in big parts where it doesn’t make sense to replace durable, low-wearcomponents such as metal housings. “Remanufacturing is a lower price-pointopportunity for the customer and supplier,” he adds, “but we can stilldifferentiate that product with all of the other services and support as wewould an OEM product. There is a value associated with that. You get price butalso everything else from a reputable supplier.”
It is worth noting that remanufacturing also provides theenvironmental benefit of extending the productive life of a part that mightotherwise be scrapped. In 2007, over 60 million pounds of steel were recycledand remanufactured by ArvinMeritor alone.
The successes of online retailers like Amazon.com haveraised expectations for anyone who uses the Internet to compare products andplace orders, and many suppliers have online catalogs and ordering systems.These enable customers to check product availability, place orders, check thestatus of a delivery, print invoices, view in-depth technical information, andsee enlarged views of products and assemblies. They provide dealers andindependent shops with equal access to general service and repair informationfor a company’s products. Information services also enhance customer servicewith call centers that often provide immediate or follow-up resolution within24 hours. To be a global aftermarket supplier, companies must continuallyinvest in these information services to accompany the quality parts.
Additionally, technology is enabling suppliers to offer moreconvenient and cost-effective training through self-guided online learning,virtual classroom webinars, and on-site instruction.
Bendix’s Johnson predicts that technology and 24/7 accesswill continue to have a far-reaching impact on the way all of us do business.“The availability of online or interactive training, product information, andaccess to application expertise is an extremely important factor to considerwhen choosing a product supplier. These tools allow the dealer or distributorto connect to the supplier when, where and how it is easiest for them.”Web-based information systems are among the ways suppliers now have as aresponsibility to provide timely, cost-effective, time-effective support to theevolving aftermarket.
Haldex’s Petresh concurs that even with the availability of24/7 online technical support and customer service, onsite training is still veryimportant. Citing personnel turn-over as one example, he says, “You still needto reach people face-to-face, and organizations that can’t provide that are ata disadvantage.”
The appeal of all-makes
It’s not practical for customers to maintain an inventory ofgenuine replacement parts that spans the multiple vehicle brands of today’smixed fleet. ArvinMeritor’s Mejaly says that by implementing the concept ofall-makes parts, truck operators can enjoy the benefits of “one-stop shopping”while dealers and distributors can streamline inventory and capture morebusiness regardless of a fleet’s brand composition. “Consider the intrinsic andpragmatic value of one phone number, one center of expertise, one website, andone trusted in-the-field representative,” he asks. “The all-makes difference isin the bottom line.”
ArvinMeritor’s Livingston says he has witnessed anincreasing amount of all-make parts purchases. “Our customers have shownclearly that they want to call or e-mail one reliable source, not six or sevensources.”
Andy Cifranic, brand manager for Bendix Commercial VehicleSystems LLC, says, “Buying a brand of product that can fit on ‘all-makes’ ofvehicles is definitely an appealing option in the aftermarket. However, not all‘all-makes’ offerings are the same,” he advises. Some OEM-supplier brands,including Bendix, are standard or available at most OEMs. These brands alsooffer aftermarket replacement products that service “all makes” of vehicles. Incomparison, other brands that offer “all-makes” have no OEM position orexperience. In that case, it is simply an option of offering imitation partsfor “all-makes.”
Haldex’s Petresh says this trend helps customers who wantthe simplicity of buying parts from one supplier along with the benefit of keepingall of the after-sale services. “If one supplier can provide parts across manycategories, that’s a huge advantage at the fleet level.” He says there are onlya few manufacturers that can offer that, so their expertise is a huge advantageas a supplier.
The risk of imitation parts
There will always be a group of customers who buy on pricealone. But dealers and distributors need to be aware that it’s important to bewary of will-fit parts that don’t deliver the consistent and reliableperformance that customers expect. Dealers and distributors who sell or installpoor quality parts can damage their reputation, or worse, face liability issuesshould a product failure have catastrophic consequences.
“Few manufacturers worldwide are equipped to manufacture, orapprove for sale, OEM-quality commercial vehicle replacement components foraftermarket use,” Mejaly contends. Manufacturers that don’t have theengineering expertise, the understanding of the part’s original design or thequality manufacturing processes to match the performance specifications of anOE component cannot match the safety, reliability or durability of theoriginal.
To keep costs attractively low, unapproved parts may usecheaper materials and lower grades of metals that can lead to componentfailures. If untrained labor is used, error-prone manufacturing can result.Quality standards simply do not exist at some offshore manufacturingfacilities. And there is no after-sale support. “Buyer beware”’ applies toparts dealers and distributors as well.
To help address the issue of counterfeiting, diversion,non-compliant products and intellectual property rights, many companies havejoined the MEMA Brand Protection Council, which helps to direct the industry’scollective actions in challenging intellectual property infringement. “At thistime,” says ArvinMeritor’s Livingston, “the amount of counterfeit parts israther small.” But he cautions, “there are a lot of non-genuine parts, meaningpeople or entities are in the marketplace posing as our supplier that havenever supplied us in any way and often have no manufacturing capability.”
Bendix’s Cifranic responds that there is a risk associatedwith buying imitation or will-fit parts. “The product is only as good as thecompany that stands behind it. Manufacturers of genuine replacement productsoriginally designed the product, so they have the advantage of knowing all ofthe detailed performance, material, and quality specifications necessary tomanufacture the product properly for the aftermarket. “They also provide thewarranty programs, sales support, and customer service to the purchaser before,during, and long after the actual purchase. This is not always the case withwill-fit manufacturers.” Bendix believes that this issue is an important one,and works with industry colleagues on the MEMA Brand Protection Council to helpaddress the issue.
Petresh at Haldex says of counterfeiting, “We watch thatlike a hawk.” Through the MEMA Brand Protection Council and TMC task forceagainst counterfeiting, they expose the product or source and take whatevermeasures appropriate to combat it. “We go after every one. We’re veryaggressive on that point.” He credits customers, distributors, sales andservice staffs for providing leads to expose counterfeits.
Being properly positioned for this surge inaftermarket sales means partnering with dependable, reliable suppliers that candeliver a range of quality products and high-caliber after-the-sale support.Choosing such suppliers is good advice for aftermarket component purchasers.