Board the E-Train Or Get Left Behind

July 1, 2000
The business world is being electrified by e-commerce. Old methods are being discarded, replaced by a shop that is open 24 hours a day/seven days a week,

The business world is being electrified by e-commerce. Old methods are being discarded, replaced by a shop that is open 24 hours a day/seven days a week, that can be accessed anywhere in the world, that can cut costs.

It's not the wave of the future. It's now.

David Lee, the National Truck Equipment Association's information technology director is, among other things, empowered with the task of educating members about the ways they can use the Internet to take their businesses to the next level. Even if they don't want to grow, they need to know what's out there.

Lee remembers the puzzled looks he received a few years ago - mostly from distributors - when he extolled the virtues of a web site.

"Give me a reason why I need one," they'd say.

"Because it will put you up at the same level as all the other guys," he'd say. "Because it's just another way for you, even though you may be regional in scope, to communicate."

The now-quaint idea still hasn't been fully embraced by the industry. An NTEA survey revealed that only 31% of 873 distributors have a web site, and only 41% use e-mail as a business tool. The numbers on the manufacturing side - 66% and 64% - are better, but still not in line with those in other industries.

When it is suggested to NTEA President John Puckett that the industry is reluctant to change, he says, "I think you're putting it mildly."

Puckett, CEO of Fontaine Distribution Service Center, says the problem is that many simply don't understand the vast technological changes that have altered the way companies do business.

"It's an educational issue," he says. "I think the association is trying to do what it can. You see more and more members with web sites, but a lot of them are informational only: 'This is where we're at. This is what we sell. This is who we are.' Now you've got to get that interaction going."

It's e-commerce. And it's here. Those who don't utilize it will be left behind.

"I think both groups are finally understanding," Lee says. "Their perspective on the impact that it will have on them is different, though. Manufacturers are definitely looking at it as a way to maybe cut costs and streamline their operations and communications throughout the chain, including their communication with their own distributorships.

"Distributors, I don't think they see the value of e-commerce and data interchange. They're the ones that really don't have a big computer system already set up in their operations. Maybe they just have one or two computers that might not even be networked. They're kind of like, 'I've got a couple of computers here. What's the Internet going to do for me?' I think that's where they're missing the boat."

Still Room for Distributors Some also might feel that their very existence is threatened by e-commerce. Puckett and Lee, however, calm the fear.

"I don't see it ever shutting the distributor out," Puckett says. "The final-stage manufacturing function has to be done by distributors or manufacturers at the plant. But somebody has to finish the vehicle. We're not selling commodities."

Says Lee, "I'm sure that has happened in some industries, but we don't see that happening in ours because the end product is just too complicated. There's still so much customization to be done on a new vehicle. It would be very hard for anyone to be able to be a broker, set up shop on the Web and try to combine manufacturers and distributors and build a product to specifications that was ordered on the Web, then just ship it out."

Lee envisions that by the end of the year, a landscaper who starts his own business will be able to use e-commerce to spec his own truck and do side-by-side comparisons of service-body types and manufacturers' models. He sees toolbox manufacturers trying direct sales.

But in most scenarios, it's not just a service body and a chassis. It's winches, snowplows, PTOs. It's specialization.

"I don't think distributors will get bypassed at all," Lee says. The NTEA is leading the way with its launch of, a business-to-business web site dedicated to the $47 billion commercial truck and transportation industry. The site, partnered with the Internet company eSociety, will address every link in the value chain.

"There's really nothing like it out there yet," Lee says. "It will be a one-stop shop. Everybody talks about it. It's a cliche now. But we're going to be pumping in a lot of content."

There is no fee for NTEA members who have access to the entire site. Others can sign up as a free registered user and get a lot of information that is currently on

"We're raising a lot of eyebrows out there, given that we're a pretty small organization," Lee says.

Multifaceted Portal The members-only area includes: *Research, market data, and forecasting to help companies make more informed decisions and ultimately increase profitability. *A 10-year library of NTEA articles and publications such as "Tech Talk," Technical Reports and "Excise Tax Enquirer," plus the government's latest regulatory and legislative activity. *Marketing opportunities through the submission of news items and press releases. *Educational training opportunities through the Truck Equipment 101 course and the NTEA Truck Equipment College. *Free Web-based, personalized e-mail accounts that can be accessed anytime from anywhere. *A classified ad section that offers the chance to reach a new universe of potential buyers. *A job bank where job openings can be posted and resumes of potential candidates can be reviewed. *WorkTrucksXchange, an online auction system to connect buyers and sellers. *Message boards and chat areas with support networking within various niche groups.

"Not only will the site allow us to expand our Web presence to the global commercial truck and transportation equipment industry, but we will also be able to bring NTEA members added value to help them master their day-to-day challenges," says NTEA executive director Jim Carney.

From Puckett's standpoint, the only danger is that the NTEA can veer off in too many different directions.

"We've got to sit down with the board of trustees and decide, 'What do we do first?' " he says. "From an educational standpoint, from an informational standpoint, there are so many different things we can do for people who have access to the Internet and utilize it.

"Some of them will never do it. My wife is a school teacher with two masters degrees, and you can't get her to do anything with computers. She uses it to put in grades, but the Internet scares her to death. But the younger generation is geared that way. There's an ease of access."

Those who do not fear it are forging ahead. Monroe Truck Equipment Inc has set up an electronic store with Spokane Computer, which two years ago developed an e-commerce module that takes a customer's data base and integrates it with a web server for the purpose of selling truck parts and accessories.

Dealers can access and inquire about bailment-unit availability. Monroe upfits the chassis and sends it out.

Spokane Computer developed an application guide that integrated the existing corporate data base with e-commerce activity. So if a truck owner went to the web site and wanted to buy running boards or bed rails, he could simply key in the make, model, and year of the truck and receive the right matches. Pricing would be matched up to the type of customer.

The other key feature is a vehicle locator. Truck equipment distributors that have a chassis pool can access chassis inventory over the Internet by keying in basic information: location, make, model, year, color, and pool type.

"It's given us some good exposure," says Theresa Johnson, Monroe's systems manager. "The vehicle-pool locator has cut down on the number of calls from dealers inquiring about what's available. I've gotten positive feedback. I think we're still going to have people who would rather pick up the phone and call the sales rep."

More people than they expected, according to Spokane Computer vice-president of sales John Gaul.

"Has the industry been quick to put its arms around this? No," he says. "It's been consistent with what we've seen before in this industry, in that they're very conservative and skeptical of new things. It's trying to get the message out, trying to get some installations behind us where some people have had some successes. It's been a slow process.

"But we feel that it's something that all of our customers are going to have to deal with at some point. It's going to be a channel. Maybe not the channel. But it's going to be a very primary channel of doing business."

Gaul says the next wave of technology will be centered on the Internet as an engine to drive the process of electronic data interchange (EDI), which involves the transfer of files between unlike computer systems. A new programming standard called XML will be used to move EDI to the Web.

"EDI has been a good transaction-processing tool between totally different tools," Gaul says. "What will change will be cost and management - the cost will be lower and the management easier. It will be less messy. There won't be a middleman. They will be communicating directly. The Internet will be the vehicle that allows people to do this, rather than setting up private networks to do it.

Bottom Line "The bottom line is that we will see more people using the EDI concept than ever before. Just look at the truck-equipment industry alone: EDI is not heavily used in our industry. This may change."

Says Puckett, "The more aggressive and progressive members of this industry realize there's a cost to doing business. Anywhere you can cut that cost, you're helping yourself. Your supplier isn't creating quotes. You're not creating purchase orders. He's not creating invoices. You're not cutting checks. Every one of those transactions costs money."

Puckett says the problem in the past was that every entity had a different protocol. His company dealt with two railroad companies and had to perform two different protocols to do the same transaction.

"If the NTEA is able to standardize it within the industry, that's where e-commerce is really going to have a boom," he says.

Sales Between Manufacturers Florida-based, an e-commerce exchange for the manufacturer-to-manufacturer community, introduced in mid-June two tools for manufacturers: the electronic request for quote (eRFQ) and My Workspace.

The eRFQ provides manufacturers with horizontal buying power across vertical communities with a comprehensive quote and procurement process. It provides personalized attention by an industry-specific procurement specialist and allows manufacturers to outsource their procurement requirements by utilizing the site's Purchasing Assistant, a drill-down tool that lists the suppliers of every component manufacturers need to produce their product.

My Workspace functions as the buyer's personalized page and allows members to organize, retain, review, and edit their eRFQs in one place. It has the capability to organize supplier companies and contacts into separate folders, store payment methods, and sort vendors by classification. Manufacturers can store favorite links, references, news, and publications.

Workhorse Custom Chassis of Union City, Indiana, which produces small commercial trucks and chassis, entered the e-commerce market last year. Figuring that trucks were needed to deliver the products bought via the Internet, it started an online system for ordering its vehicles.

Hiring a team of sales managers, it focused on quickly getting the vehicles to customers - in two weeks, instead of months.

Its major customers are online grocers Webvan Inc and Peapod Inc. Workhorse says it sold over 1,000 vehicles in the first five months of this year. Now it is building a private network where its 320 dealers will place orders, download technical and warranty information, and interface with the factory.

Of course, Workhorse would not be the typical NTEA member. It has all the components in one location and has found a niche market that it can supply. The truck-equipment industry is characterized by vehicles that are much more complex. Sometimes, the customer needs a month just to decide what he really wants.

For those who want used trucks, (a provider of trucking e-commerce) and Taylor & Martin (the nation's leading truck remarketer) have teamed up to launch a 24-hour-a-day online truck and equipment auction.

Value-added services - such as buyer prequalification, financing, insurance, and truck relocation after the sale - also are provided. Most of the trucks are Class 8, as well as some Class 6 and 7 rigs, trailers, and non-titled heavy equipment.

Prospective buyers can't kick the tires, but they can click the tires. They just put the arrow on the icon and virtually view the vehicle's condition. A list of features is displayed, and there are options to view complete bid histories and ask questions to sellers.

Puckett believes the true influence of the Internet will not be known until it is prevalent on home hookups through satellite and cable networks.

"Everybody says they know what's going to happen," he says, "but before that, it's guessing. With the Internet now, you're looking at $1,000 to put a machine in your home. At some point, TV or cable systems will give you the device just to get you to subscribe. When they can get technology to the masses, that's when you'll see the effect."

Ford Offers Computer Systems Ford Motor Company is taking a bold step in that direction. It announced earlier this year that eligible employees worldwide will be provided a computer, printer, and Internet usage at home for a fee of $5 a month. Why? So its employees realize the value of the Internet and use it to connect with customers.

This from Michael Dell, chairman and CEO at Dell Computer, the world's leading direct computer systems company in sales volume: "The Internet will become as fundamental to your business as electricity. Businesses will need an information technology infrastructure that possesses the same attributes of systems that provide electricity whenever and wherever needed, at the click of a switch, to power anything from a small store to an entire city."

In other words, get on board or be left at the station. "Manufacturers are starting to think, 'We can tie in our web site with our inventory system and do some real-time interfacing through a web browser so my sales field on the road can check in with a wireless connection and get real-time inventory levels,' " Lee says. "Same thing with customer relations.

"A lot more distributors are saying, 'Hey, manufacturers are really going crazy with this stuff.' Distributors can get hooked up with their manufacturer. They can control the information about the sale, flow that back to the manufacturer a lot easier to help the manufacturer out."

Will the distributors' role change in this new economy? Sure.

"Some of them might not like it," Lee says. "There will still be a place for them. They've got to find out where they fit, what added value a distributor can bring to the table now. That's going to be a struggle for some of the smaller distributors, because they're so comfortable in their regional niche.

"I think the distributors just have to get out of the mindset that they're untouchable at this point in their regional markets, because there are bigger guys that are going to start coming into their territory and maybe start pulling things away from the local eyes that the distributor has always had."

More Changes to Come Lee says that if the technological changes in the truck-equipment industry over the past eight years have been mind-boggling, the changes in the next two years are going to be even more so.

He says the idea is to get everyone on the same page.

"You don't like to be threatened, but it's amazing what the Internet is doing to our industry," he says. "At the same time, it's exciting because it's opening up a lot of opportunities. At a local distributor that's only doing $5 million a year in sales. Pretty soon he'll be able to set up shop on the Web and customize his site to backend the system with manufacturers and automatic inventory replenishing, tie in to his customers, be able to send out monthly e-mails to his customers. All that's going to be automated.

"That guy has boosted his business and he's starting to look at expanding it regionally. Maybe work out some shipping deals, so now he's going 500 miles away, where a year ago that was unheard of.

"It can be exciting if someone can see the big picture."

About the Author

Rick Weber | Associate Editor

Rick Weber has been an associate editor for Trailer/Body Builders since February 2000. A national award-winning sportswriter, he covered the Miami Dolphins for the Fort Myers News-Press following service with publications in California and Australia. He is a graduate of Penn State University.