THE STRONG just got stronger September 30. HDA Parts System added seven more locations to its growing number of parts outlets in the Southeast. The purchase of Truck & Trailer Parts, a seven-location company specializing in the trailer aftermarket, creates a parts powerhouse that has 42 locations in the South, 550 employees, and annual sales of $135 million.
Truck & Trailer Parts and its seven locations, has won leading parts distributor awards from Stoughton and Wabash Trailers. Selling only parts, the company had sales of $29 million last year.
Based in the Atlanta suburb of Conley, Georgia, Truck & Trailer Parts has a secondary hub in Dallas, Texas, along with branches in Charlotte, North Carolina; Dalton and Savannah, Georgia; Greenville, South Carolina; and Jacksonville, Florida.
The company joins two other parts operations, themselves the product of a merger this summer. The other two companies specialize in truck parts. Stone Heavy Duty based in Raleigh, North Carolina, has 18 operating points. City Truck & Trailer Parts, headquartered in Birmingham, Alabama, has 17 locations. All three will be part of the HDA Parts System but will continue to operate under their existing company names.
With Truck & Trailer Parts joining the two truck parts specialists, the stage is set for all three companies to learn more about the others' specialties.
"With our background in trailer parts and the knowledge that City Truck and Stone have of truck parts, we should be able to help each other offer truck and trailer fleets one-stop shopping for all of their parts needs," says Guy Comparetta, general manager of Truck & Trailer Parts.
"Acquiring Truck & Trailer Parts offers us two main advantages," explains Larry Clayton, president of City Truck & Trailer Parts. "One is location. Truck & Trailer Parts is strong where we want to be strong-the Southeast. The other reason is product. We have a lot of overlapping customers. The trailer parts they offer will allow us to do a lot of cross-selling."
Prior to the acquisition, Truck & Trailer Parts stocked approximately 15,000 part numbers. The $5 million in inventory turned an average of almost five times a year.
The company stocks parts for Stoughton Trailers, Strick Corporation, and Wabash National, along with Morgan Corporation van bodies. Now that the company has joined City Truck and Stone Heavy Duty, the mix is expected to gradually include more truck parts in the Southeast. The firm's two new sister companies offer rebuilding services in addition to selling drivetrain parts, engine components, and relining brake shoes.
"How fast we move in this direction depends a lot on the type of people we can hire," says Bob Pope, president of Truck & Trailer Parts. "We will hire new people here, and we will swap employees between our companies so that we can have the expertise we need where we need it.
"That is one of the advantages of being part of a large corporation. Truck & Trailer Parts by itself did not have many opportunities for employees to grow. But with 42 locations, we should be able to provide opportunities for career advancement."
The move in either direction-from trucks to trailers or from trailers to trucks-is not as lengthy as one might think, however.
"There is a lot of commonality between our company and Truck & Trailer Parts," says Jim Stone, president of Stone Heavy Duty. "From the top of the tandem down, trucks and trailers share many of the same components. It's not until you get above the tandem that the parts are radically different."
Pushing 30 Another factor that made Truck & Trailer Parts an attractive acquisition is the company's growth rate. Sales at Truck & Trailer Parts have increased an average of 28% each year since 1992. Although primarily a southern distributor, the company sells parts as far north as Michigan, as far west as Texas, and serves some international customers.
Much of Truck & Trailer Parts' business comes from freight lines and independent repair shops. Among the company's major customers are major over-the-road carriers, private fleets, and leasing companies.
"A knowledgeable staff hired from within the industry has helped our acceptance in the marketplace," Pope says.
Larger Facilities Truck & Trailer Parts has had to move into larger facilities twice since it opened the Conley location in a 5,000-sq-ft building in 1985. The company moved into a 12,000-sq-ft facility in 1987 and grew again to 25,000 sq ft when it moved into its present location in 1991. An addition in 1994 almost doubled the building's size to 48,000 sq ft.
Truck & Trailer Parts sits on a 4_-acre site in the city's industrial/trucking district.
In 1991, regional demand allowed Pope to open the company's first branch location in Savannah, Georgia. This was a small indication of future growth. The following year, another branch location opened in Charlotte, North Carolina. The company was recognized as Stoughton's outstanding distributor the same year. Two years later, Truck & Trailer Parts opened two additional locations in Dalton, Georgia, and Jacksonville, Florida. By that time, the expanding company began being recognized outside its immediate industry. The Atlanta Business Chronicle selected Truck & Trailer Parts as the 37th fastest growing company in Atlanta for 1995. Another branch location was launched in Greenville, South Carolina, in 1996.
The company's second hub location opened in Dallas, Texas, in 1997. Management foresees the Dallas location operating as a centralized supplier to regional branch locations in the future.
Truck & Trailer Parts was honored by Wabash National as its number one Five-star dealer in 1997.
Karmak System An efficient parts ordering system has helped Truck & Trailer Parts achieve rapid growth. The company looked at three systems before selecting Karmak for its business management software.
"We felt that Karmak had a comprehensive staff to provide support," says Pope.
The system operates from a Digital Equipment Alpha 4000 5/300 server with dual 300-megahertz processors and a 12.9-gigabyte hard drive. Upgraded from a 150-megahertz machine with a four-gigabyte hard drive, the system has more than enough memory and speed to meet company needs.
"We're only using one-third of the machine's capacity now," says Pope. "We can double in size and not have to upgrade again."
The Karmak system manages Truck & Trailer Parts' accounting and inventory as well as monitoring company profit margins and producing daily exception reports. Because the company handles all accounts payable through the Conley location, it needed a system capable of handling large amounts of information. The system processes weekly orders from branch stores through the Conley headquarters.
By cross-referencing part numbers, Karmak can show several vendors that make the same part. The system is used to cross-reference vendor part numbers with the company's in-house part numbering system.
Cross-referencing is helpful with new employees, according to Pope. The system makes finding a part fast and easy for anyone.
Truck & Trailer Parts also uses the system to estimate purchase volumes. The Karmak system will evaluate a product's sales history and then project maximum and minimum stocking levels.
"This is very helpful for seasonal items," says Pope.
The system estimates the demand for products at all locations by comparing purchase orders to the amount of time between when parts are ordered and when they arrive.
The Karmak software also integrates with the company's shipping system. Truck & Trailer has configured the system so that it will print shipping labels with the amount charged and bar code using customer zip code, customer number, and the shipping weight.
"This has doubled our shipping capacity," says Pope. "We can do twice as much with the same manpower."
The system provides in-house UPS tracking. It improves efficiency by providing what time an individual order was received and who signed for it.
Volume Discount Parts Truck & Trailer Parts supplements its sales with a sister operation-Volume Discount Parts. Part of the Truck & Trailer Parts umbrella, Volume Discount Parts is a wholesale parts supplier serving small OEMs and parts retailers. The company uses telephone sales and operates from Truck & Trailer Parts Dallas and Atlanta hubs.
"Volume Discount Parts serves mostly original equipment manufacturers and aftermarket parts and service dealers," says Ken Gertz, Volume Discount Parts general manager. Volume processes almost all orders within 24 hours, with most customers in the Southeast receiving next-day delivery.
"When a customer places an order before noon, it goes out the same day," he says. "The just-in-time delivery concept has helped Volume be successful because without large inventories of stocking parts, OEMs need immediate delivery."
Volume uses fliers, which it sends out every two months to introduce new products and volume discounts. Gertz keeps fliers on computer disk so they can easily be changed between mailings. Because the business deals with large inventories of parts, it is able to maintain consistent prices for long periods of time.
"It's important to dealers that we keep prices the same," says Gertz.
Same-Day Parts Deliveries Drivers at Truck & Trailer Parts use seven delivery vehicles to make morning and afternoon deliveries from the Conley location to businesses surrounding Atlanta. Other company locations have two or three vehicles.
The company uses Mitsubishi cabovers fitted with van bodies and stake bodies to deliver parts. Although they do not offer the weather protection of a van body, stake bodies are useful for delivering lengthy items.
Six of the Conley trucks are on call for local deliveries. The other one serves outlying areas with primarily weekly deliveries.
"We deliver according to customer need," says Greg Woods, branch coordinator. "Some of our customers need us to deliver parts twice a day."
Truck & Trailer Parts strives to get parts delivered to customers by 10 am. The truck making out-of-town deliveries is loaded first, with most trucks leaving the Conley location by 8:15 am.
"If a local customer calls us with an order as late as 8:30, we usually can get his order to him by 10," Woods says. "This company got its start by being competitive with service-not price. We want to keep it that way."