Tough economic times cause major changes in companies and markets. To get a clearer picture of how the aftermarket is changing, Aurora Part & Service recently conducted detailed interviews with 36 fleets as well as with the company's distributors.
The research generated a 60-page report and some new ways of doing business.
A fundamental shift in thinking: Don't just focus on the business of being a wholesaler of parts. In untraditional ways, help individual distributors sell parts in their local markets. Why? Because as David Clarke, president and CEO of Aurora, often states, “A part is not sold until our distributor sells it.”
Clarke, an industry veteran with 22 years at PACCAR, together with Dennis Martineau, vice-president of new business development, believes that trailer aftermarket support networks lag behind other heavy-duty dealer groups, most notably tractor dealers and distributors. The gap is particularly evident in the areas of technology and aftermarket support systems. Aurora says it is working hard to close that gap.
“I felt this industry was ripe for the same sort of things that had been done in other industries,” Clarke says. “Our focus has moved from a wholesale relationship to helping dealers in the retail marketplace. It's been a giant shift, to say the least.”
Matter of priorities
The survey sought to find out what fleets and distributors considered important priorities for product/service support. Among the findings:
Dealer/distributor network price and service consistency. “It's almost like the McDonald's experience,” Clarke says. “Our vision is to give fleets consistent pricing and service quality in North America, just like what people expect when they visit a McDonald's. The trailer market has tended in the past to be served by individual players. Nobody was linked coast to coast. Fleets are really looking for price and service consistency wherever they operate.”
Service turn-around commitments. “A lot of people take on work and promise to get to it in two or three days. A week later the fleet is calling to find out why their equipment is not in the shop. Obviously, a lot of that has to do with whether you are a home-based dealer for that fleet or out of market. If you're a fleet that has trailers out in the marketplace where you're not domiciled, the dealer may not always get to you as quickly as a hometown fleet.”
Quality standards for product replacement. “You've heard a lot about counterfeit products. Fleets are concerned about the quality of the products going back onto their trailers. Whether the work is done out-of-market or by other service-repair locations they might have a relationship with, fleets want control over what products go on their trailers.”
Comprehensive product offering. “Finally, they said, ‘OK, I understand you can look after this brand of trailer, but I have a mixed fleet. I have Great Dane, Wabash and Lufkin trailers. How do you look after me completely? I don't want to send this brand of trailer to you and another to other companies. I need a comprehensive, one-stop shop to send my trailers to.’ ”
Aurora Dealer Advisory Group. To help prioritize distributor retail sales needs and improve communications within the network, Aurora organized a dealer advisory group in June. The group consists of six distributors from different regions and representatives from Aurora's sales, marketing and management departments.
To address the priorities of both the dealer network and the fleets, Aurora has rolled out a number of strategic initiatives and technological advances over the past two years, many of them in the past year. They include:
FleetPerform. This is a program that sets nationwide pricing on parts and recommended service times for all makes of trailers. FleetPerform's consolidated billing and nationwide pricing offers fleets and distributors a complete aftermarket parts and service solution. Aurora has loaded recommended service-repair times for all makes of trailers and monitors network performance to ensure that fleet expectations and commitments are being met, removing the surprises associated with out-of-market repairs.
“We can offer fixed prices on parts and recommended service-repair times on trailers,” Clarke says. “The consolidated billing platform is the key component that really streamlines a fleet's operations. They get one bill per month, and they know exactly what their bill's going to be. In our system, a dealer can't bill more than the contracted national fleet price.”
Pro-FIT. This all-makes product line consists of parts that are engineered as a direct fit for the original OEM component. Through Pro-FIT, Aurora can now offer direct-fit replacement parts for competitor OEM trailers such as Great Dane, Stoughton, Strick, Utility, Vanguard, and others.
“Although we serve a large percentage of the market of trailers, we also recognized the need to deliver more of the all-makes components. There are a number of people who support all-makes, but a lot of parts are not engineered for direct replacement. A lot of them are close-to-fits or will-fits. You may have to drill extra holes. We wanted to make sure structural components were engineered for direct-fit. So we have a team of OE engineers on staff to add a whole new product line that addresses all makes of trailers.”
Aurora Product Expansion. Aurora recognizes that its network of parts and service shops work on all makes of trailers. To better support the network, the company had to increase its trailer parts availability to include parts for all makes of trailers.
Already the exclusive aftermarket distributor for Wabash National and Fruehauf, Aurora began taking on additional lines in 2006. That year Aurora became the authorized distributor for Hyundai Translead's aftermarket parts. In 2007, Aurora acquired Globetech Manufacturing for international sourcing. The addition of Globetech provided Aurora with the means to source competitively-priced alternatives to other brands, giving customers more product line choices.
“The acquisition of Globetech allows us to address a different niche in the market by utilizing the good-better-best strategy,” Clarke says.
Also in 2007, Aurora increased its OE affiliation by becoming the exclusive aftermarket distributor for Transcraft Corporation, a move that enables the company to more effectively serve the flatbed market. The following year, Aurora purchased the rights to become the exclusive OES of aftermarket trailer parts for Lufkin Industries.
In 2009, Aurora acquired the entire Trailmobile Canadian parts inventory.
Truck body parts. Aurora signed agreements earlier this year with both Supreme Corporation and Morgan Corporation to distribute aftermarket truck-body parts. Many of Aurora's distributors already repair a great number of truck bodies along with trailer repairs. By including Morgan and Supreme, Aurora provides its distributors one point of purchase for trailer and truck-body needs. The inclusion of truck-body parts also opens the door for distributors who weren't previously offering truck-body repair.
“A lot of our dealers were already repairing truck bodies,” says Shelley Sheagley, director of marketing, “but they had to go to the manufacturer directly, sometimes paying with a credit card, paying for freight, or waiting for lead times. Adding this product to our inventory eliminates long lead times and allows us, in many cases, to offer a much more competitive price.”
“Freight was compounding their costs, because it was one of this and two of that,” Clarke says. “We have our own dedicated delivery service with 60 trucks. This allows us to take freight costs out of the system.”
Says director of sales Mike Conley, “It's a natural fit with our distributors. Many repair shops already worked on truck bodies. Our delivery service helps to get parts there quicker.”
Pro-Par Products. In 2008, Aurora began manufacturing Pro-Par composite overhead doors as an alternative to wood doors. Composite overhead doors provide life-cycle savings to the fleets through extended door life, less down time for repairs, and better protection from the elements. Clarke says specific fleet studies have revealed as much as a $3,500 savings over a 10-year period.
Aurora also has developed some new technological tools. Among them:
e-Flyers. With this online sales and marketing tool, Aurora distributors are able to select from a library of ad squares to create customized e-Flyers. What took dealers several hours or even days to produce can now be done online, anytime, in under 10 minutes. When discounts are offered by Aurora's supplier base, the e-Flyers tool can quickly translate those discounts to the wholesale and retail marketplaces. Dealers will have an electronic version of their flyer and can print it for distribution to their customer base — in less time and at a lower cost.
“Distributors/dealers have been pretty much left on their own to come up with marketing tools to reach their end-user customers,” Clarke says. “I saw it for the first time when I watched a poor parts manager sitting at his desk, clipping copies of precuts out of different magazines and trying to physically glue a flyer together and put it out through Kinko's.”
Graphical Bill of Material (GBOM). This is a graphical drill-down catalog (similar to ones found in auto parts stores) that helps identify parts by make, model, and physical attributes. In the past, the trailer industry has always been dependent on serial-number lookup and drill-downs through text-based bill of materials. The GBOM allows for even the newest counter person to easily create repair estimates, which in turn will increase sales through prompt responses and competitive pricing. This visual library of parts provides selection and pricing for all makes of trailers.
“This is probably one of the big a-ha's in the dealer group,” Clarke says. “There is a serial-number dependency out there. You have to go to a bill of material and drill down, migrating through words to find your part. We took a visual approach and used schematics to drill down.”
Sheagley gives a dry-van example: “Since Trailmobile is no longer manufacturing trailers, there has been a strong demand for Trailmobile aftermarket parts. Through Aurora's graphical bill of material, you don't even need to know the name of the part. If you know it's in the nose area, you click on the nose assembly and get another exploded view.”
Says Clarke, “There's nothing like it in the industry. It was a lot of sweat and tears. We moved away from off-the-shelf software used frequently in the industry today. We felt this is one of things that would give Aurora a competitive edge.”
MyAuroraPlus Web site enhancements. Aurora launched its customer online portal in 2008. Today, the Aurora Web site supports online parts ordering, parts searches, and serial VIN number lookup. The most recent additions, x-Ref and Parts Stocking Location, are customer-support tools. X-Ref allows distributors to upload their part numbers and cross-reference them to the Aurora part numbers. Counter people no longer have to try to learn the Aurora parts numbers when ordering or searching for parts on the Aurora Web site. Once they've uploaded their crosses, they can find parts with their own part numbers. The Parts Stocking Location tool allows distributors to upload their bin locations, referencing their part numbers. This tool will reference that bin location on the distributor's invoices and packing slips so their receiving departments can quickly put away parts without having to look up where they should go.
While the recession has forced many companies to cut back on ambitious projects and initiate layoffs, it actually positively impacted Aurora's plans.
“We've accelerated many things, partly because there have been some exits in the industry,” Clarke says. “Trailmobile is an example. So if anything, the recession has accelerated the necessity to provide marketing tools for our dealers who are having a difficult time. Today they are more reliant than ever on the aftermarket because new trailer sales or builds are at such a low level. For many dealers and distributors, the parts and service business is key for survival.”
Clarke points out that if Aurora were part of a trailer manufacturer, the parts operation would be undergoing the same cost-reduction pressures that other departments would experience. Instead, the company has been able to expand.
“I've always said these times breed great opportunities. If we were connected to a manufacturer today, we would be asked to curtail capital spending and have major reductions in workforce. But we aren't. We've had no layoffs, and we're looking for opportunities wherever they are.”
That's all he can divulge right now. But he will say this: There is more to come early next year.