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Speed to the market

July 1, 2003
IT DOESN'T TAKE LONG to see that things don't take long at the company reported to be the largest coast-to-coast truck equipment upfitter and manufacturing

IT DOESN'T TAKE LONG to see that things don't take long at the company reported to be the largest coast-to-coast truck equipment upfitter and manufacturing operations in America.

“Speed to the market” is a phrase that management mentions frequently at America's Body Company. The truck equipment company, with locations across the country, has implemented several procedural upgrades designed to enable the distributor to get there even faster.

When a company equips several hundred trucks per day, time is of the essence. Among the initiatives that ABC has implemented to make itself more efficient includes a computerized automated order configurator that enables instant ordering of complex engineering, an apprentice program to enhance the development of its technicians, and a streamlined purchasing program.

“Speed to the market is critical,” says Shane Baker, senior vice-president of operations. “Truck dealers are shifting away from the idea of keeping trucks in stock. That puts more responsibility on people like us to get the customer the vehicle he wants equipped the way he wants as quickly as possible.”

Speed is important at a company such as ABC, where 350 Ford Econolines move through the shop every day to be equipped with van interior packages. The vehicles typically are on the premises six to 24 hours before they reenter the Ford freight system en route to local Ford dealers. The big challenge, however, is to deliver quickly while maintaining quality, which ABC had to do in order to achieve ISO 9002 and ISO 14000 certification.

Automatic configurations

One of the latest ways that ABC equips trucks more quickly is through the use of proprietary computer software that the company developed.

Built around Microsoft Access relational database, the automatic order configurator consists of hundreds of tables containing data on truck chassis, options, and an array of the equipment ABC distributes. Among the products that can be included in the automatic configuration of the truck are dump bodies, vans, platforms, and utility bodies.

Highly custom utility and municipal trucks lie outside the capabilities of the configurator. But between 60% and 70% of the company's core products are routinely processed though the system.

“We want to include van interiors, too — another of our core products,” says Lisa Herchek, program manager. “That will be challenging, though, because of the broad line we carry. We have all the major suppliers in the U S, and we are the largest distributor in the U S for System Edstrom.”

Based in Sweden, System Edstrom offers modular packages for plumbers, heating and cooling contractors, and similar applications. The company has developed its own configuration software.

ABC provides its sales staff with laptop computers that run the software and portable printers to print out the results.

“It works great for sales calls,” Herchek says. “We can operate the computer at the customer's office. It does not need to be connected to our network until the customer agrees to buy. When that happens, we integrate the software with our MRP system. Without the system, or for those orders outside the scope of the configurator, the proposal would have to go to our engineering department for analysis.”

Making it work

The process starts by identifying the truck the customer wants. The next step is to pick the body and features. An options tab provides a list of what is available for the base unit the customer has selected.

“The computer calculates weight distribution and analyzes the proposed truck to make sure it meets FMVSS requirements,” Herchek says. “It provides a simple way of ordering complex engineering.”

The ABC sales staff, however, does not have a simple way of getting this engineering. Each individual must be trained to use the system before being allowed to use the configurator.

“It's a great training tool and a great sales tool,” Herchek says. “And it speeds the process of getting the truck to the customer. Compared with sending the proposal to engineering, we can save 1-1½ weeks. It's a rifle shot from the customer to the shop.”

ABC borrowed an old idea to accelerate training for its shop technicians — an old-fashioned apprenticeship program, but with a 21st century twist.

“This particular program was designed in 1908 and has been used in a lot of industries,” says Tim Pike, general manager — operations.

Those who qualify for the program receive in-depth training. The first year involves learning about such concepts as work orders, drawings, specifications, and understanding ABC procedures. The second year involves preparation for the National Institute for Automotive Service Excellence certification test.

“We want to build people here — not just trucks,” Pike says. “We teach about tools, nuts and bolts, and leadership.”

ABC launched the program in January after spending more than a year developing the curriculum. The company's portion of the program involves covering 12 modules during the year, or an average of one per month.

Beta site

The company's Cleveland area location served as the beta site. But after moving only through the first four modules, ABC was ready to roll the program out to its remaining nine locations. Such a program should be particularly beneficial to truck equipment distributors that have multiple locations because it will help the company produce consistent work, regardless of the location where the installation was performed.

To become part of the apprenticeship program, candidates must pass a 20-question entry test and a rather intense interview. New hires are not eligible until they have accumulated six months of service.

The program offers employees two primary advantages. First is an opportunity to upgrade their skills. Second is the ability to earn more money more quickly. Those in the apprenticeship program have performance reviews every six months, rather than annually. Apprentices meeting the prescribed performance levels get raises twice a year.

Training modules

ABC conducts training modules three times per week. Monday is for the paint department. Wednesday is for the installation of traditional truck equipment, and Friday for the special program ABC has for installing van interiors in Ford Econolines.

The program is not a legally binding contract as the old apprenticeship programs centuries ago. But the format provides the same, in-depth knowledge as the programs that inspired it.

“By January, we will move our apprentices to the ASE portion of the program,” Pike says. “We want them to be able to ace that test. If they fail, they can't take it for another six months.”

Also being planned is the ABC version of apprenticeship grad school. The program is designed to provide technicians with additional management expertise.

Another way ABC is getting to the market quickly is through the sale of pre-engineered packages of truck equipment.

“We are getting into new products,” Baker says. “We have a lot of things going — working with our suppliers to update truck equipment so that it more closely matches the style of the truck, increasing the flexibility of the truck, reducing mounting times, and getting packages of truck equipment that are more specific to the vocation that will be buying it.”

Contractor package

A good example is the contractor package that ABC developed in cooperation with the Plumbing Heating and Cooling Contractor Association. ABC is selling tailor-made vehicles that come pre-stocked with the inventory the contractor needs to put the truck to work in that specific application.

“This has become a strong subset of our business,” Baker says. “We are offering configurable packages that allow contractors to customize their trucks to meet their needs. It's an idea that originated in California that we are bringing into the Northeast.”

ABC has implemented a kaizen program as a means of constantly improving its operation.

“We hold monthly kaizen meetings,” Baker says. “In them we encourage everyone to give us their ideas on how we can improve our processes. As a special incentive, we give $500 to the employee submitting the most implemented suggestions in a year.”

A companywide database helps management keep track of the suggestions and their implementation. In setting up the program, management has committed to actively evaluate suggestions. The database helps management with that commitment, generating a list of all suggestions that must be acknowledged within 24 hours after being submitted. The database, built around Microsoft Access, can be searched by a variety of criteria.

“If someone gives us a suggestion, it's important to let them know that management has received it and evaluated it carefully.

Tier One

Continuous improvement is important to ABC, a Tier One supplier since 1996.

As a Tier One company, ABC is constantly evaluated.

“When Ford made us a Tier One supplier, they conducted an assessment audit,” Baker says. “They evaluated all phases of our company, including management, financial strength, and business practices, and they required us to be ISO compliant.”

The evaluation is continual, Baker says. ABC receives a performance report card from Ford. The report card includes such topics as delivery ratios, cost reductions, and new solutions.

Evaluating suppliers

Employees are not the only source for new solutions. Suppliers also offer ways to do things better.

“We have consolidated our suppliers,” Baker says. “We are looking for vendors who will work with us on private-label products or other exclusives.”

The company also is looking for ways to reduce costs and improve quality. ABC recently entered a program with BASF that reduces coating costs, lowers VOC emissions, and speeds the process of doing paint matches.

“We can now match the color of the customer's truck for one-third the price of a factory match,” says Lenny Seitz, paint supervisor.

As part of the agreement ABC now has with its sole coating supplier, BASF supplied the computers needed to perform the color matches and provided ABC with a paint booth in its Philadelphia location. The facility, formerly Liberty Truck Equipment, had farmed out its painting work. BASF also is evaluating the equipment at the other locations to see if upgrades are required.

Most of the paint ABC uses is either Ford red or Chevy red, Seitz says. His department is continuously evaluating the use of new equipment that will enhance the quality of the finish and expedite delivery.

Cost reduction

ABC entered into an agreement a year ago. In exchange for the right to be ABC's exclusive coating supplier, BASF provided the company with a 20-25% reduction in coating costs, based on the volume of coatings that ABC had consumed the previous year.

“BASF is not really well established in the commercial truck equipment market,” Baker says. “They approached us as one of the largest commercial truck upfitters to gain a foothold in this industry. We surprised them with the volume we ordered from them — six gallons per week just for Ford red. We paint an average of 200 trucks per month here in Cleveland and between 1,500 and 2,000 company wide. We have painted 36 dump trucks here the last two weeks.”

The company has standardized on the BASF urethane with hardener and reducer.

“We use less material, it has a good blending ability, and dries fast,” Seitz says. “We can sand our runs 20 minutes after painting, and we can buff it within an hour.”

One concern has been compatibility of the new paint system with that of ABC suppliers. The BASF coatings must chemically cross link with the primer to achieve optimal bonding. ABC and BASF have been working with Heil and Stahl, two of its top truck body suppliers, to get their spray systems compatible with that of ABC.

Cutting other costs

Seitz says he tries new products constantly in an effort to drive out costs without sacrificing quality.

“We get the results we are looking for, and the customer gets the results he expects,” Seitz says. “If your paint department has the volume, you can save a lot by buying in bulk. For example, we are buying sandpaper for $17 a roll from a company in Germany. We have found some bargains with tack rags, and we are buying 100 boxes of strip caulk a month. We demand that those items are there, because we don't have time for delays.”

Seitz believes in scrutinizing the product before he buys.

“When I buy a urethane, I want to know the clean-up time. How fast can I apply it? What is the cost? Can I get where I want to be quicker at the same cost if I use another product?”

Cost, however, is only one consideration.

“Customer satisfaction is still top priority,” Seitz says. “Customers are paying a lot of money for trucks, and they want them to look good.”

Dump truck customers are particularly inclined to want top-quality paint jobs, but areas such as the joint between the cab shield and the dump body sometimes blemishes prematurely.

“We have worked to seal the area so that water does not collect,” Seitz says. “It costs a few minutes of labor and $4 in material costs, but solving this now helps keep customers satisfied and saves hours later in rework.”

Across America

ABC was formed in 1976 as Great Lakes Truck Equipment in suburban Cleveland. Through the years, the company has grown significantly through acquisitions of other distributors and organic growth. Corporate offices are now in Columbus, and the company has additional locations in Louisville, Tampa, the Washington DC area (Clinton, Maryland), Philadelphia and Nanticoke, Pennsylvania, and Portland, Oregon. ABC also had acquired D & H Truck Equipment in southern California, but the company sold that operation to employees and a second party at the end of 2002.

Six of the locations have manufacturing facilities. ABC produces its own line of platform/stake bodies, dry-freight van bodies, cutaway vans, and service vans (a combination service and van body) in Louisville, Nanticoke, Portland, and Tampa.

The company has averaged 30% annual growth, Baker says. But ABC is not complacent.

“We can do better,” Baker says, “and we can do it faster. Our goal is to offer commercial trucks while you wait.”