CHARLIE Smithberger says that servicing the customer after selling a garbage collection truck is how Heil's number one distributor award for refuse truck replacement parts was won by Quality Truck Body & Equipment Company in Youngstown, Ohio.
"You have to be able to service what you sell, or customers will go elsewhere," says Smithberger, the president and a co-owner of Quality Truck Body. "We really excel at service after the sale."
Winning Heil's distributor award for refuse truck parts several times was not an easy task in a city where the economy has been struggling to recover since the recession of the 1970s, says Bob Freeze, vice-president of Quality.
Before the recession, steel mills ran three shifts and Youngstown had a population of 170,000. Following the recession, the population dwindled to 90,000 and only one steel mill is now in operation.
But the distributor persevered in this environment and won Heil's award for refuse equipment parts sales, Smithberger says. The distributor won the award for most parts sales in 1996, second most parts sales in 1997, and is on track for the top spot in 1998.
Quality Truck Body has been a member of Heil's million dollar club every year since 1992, Smithberger says. To become a member of the club, a distributor must sell at least $1 million of Heil products each year.
"We produce these volumes because we stock the parts and have a saturation of Heil refuse collection trucks in the areas we cover," Freeze says.
$200,000 Parts Inventories Quality Truck Body's shops in Youngstown and in Detroit, Michigan, have a $200,000 inventory of parts for refuse equipment trucks, Freeze says. Both locations sell Heil refuse collection trucks and are full-line truck equipment distributors.
Heil operates a ready-truck program that allows distributors such as Quality to sell a complete refuse-collection truck, he says. Similar to a pool program, Heil stocks chassis that distributors can draw from when building a vehicle.
At least once a week, Heil faxes lists of available chassis to Quality and other distributors, says Freeze. Truck chassis stocked by Heil for distributors include Sterling, Navistar, Mack, and Volvo.
"We pay no floor-plan interest in the ready-truck program, and it takes only three days to receive a chassis," Freeze says. "We have a real advantage because we can sell the complete vehicle."
Recently, a shortage of heavy-duty chassis with Allison automatic transmissions is the only impediment to further increasing sales of refuse trucks, Freeze says. Chassis ordered with Allison transmissions have longer delivery dates compared to chassis with other transmissions.
Sterling cannot deliver chassis with Allison transmissions until February 2000, he says. Heil cannot deliver any refuse truck with an Allison automatic before March 1999. Slow deliveries of Allison-equipped chassis have been occurring for the past 12 months.
Refuse Truck Sales But Quality's sales remain strong for new refuse trucks, Freeze says. From January 1 to mid-August, Quality sold 83 refuse collection trucks from the Youngstown location and Detroit branch. Quality sold 132 refuse collection trucks in 1996 and 104 in 1997.
"If we keep the volume up for the number of trucks sold, parts sales will follow," Freeze says.
In 1998, Quality expects to do $12 million, primarily because of the extra capacity in a new 30,000-sq-ft shop that opened in February.
Quality built the new shop after an adjacent carpet warehouse burned down and the building was razed, Smithberger says. The distributor purchased the building site and a three-acre lot next to it that will help increase the new equipment inventory.
In the shop, Quality has a shear and pressbrake to fabricate custom floors when needed for refuse collection bodies, Freeze says. Other fabrication work is done when the distributor occasionally builds stake bodies.
In addition to mounting refuse bodies on new chassis, Quality keeps its 29 shop employees busy refurbishing and painting garbage trucks, he says. After the trucks are rebuilt, they are prepared in one of four bays in a building separate from the shop and painted in a 46-ft spraybooth.
Rebuilding Garbage Trucks In the Midwest, a garbage collection truck has a life of about seven years, Freeze says. But a rebuilt garbage truck can last an average of four years longer.
About two garbage trucks are rebuilt each week in Quality's shop, Freeze says. On a typical garbage truck rebuild, Quality replaces the hydraulic cylinders the packing blade, and repairs the refuse body floor.
For the new trucks it builds, Quality sells the vehicle owners 90% of the replacement parts needed to repair the vehicles, Freeze says. The other 10% of the parts are sold by competitors.
Refuse collection trucks are high maintenance vehicles and need a lot of parts, Freeze says. The trucks have many moving parts and hydraulic components that wear quickly.
"A garbage truck cycles 300 to 500 times a day compared to a dump truck that cycles at the most maybe 10 times a day," Freeze says. "Garbage men have to operate the packing blade at every two or three stops on a residential route."
Besides the cylinders and hydraulic valve banks on a refuse collection truck, the newer vehicles have electronic components that Quality stocks, he says. Supplying these parts after the vehicle sale is what drives profits at Quality.
Refuse Parts Sales Parts sales for refuse collection trucks account for 25% of the total sales volume at Quality, Freeze says. The other 75% is new equipment sales, of which 50% is refuse collection vehicles. The other 25% of new equipment sales are dump bodies, van bodies, snowplows, tailgate lifts, hooklifts, utility bodies, and other truck bodies.
Quality does very few retail, over-the-counter parts sales, Freeze says. However, the distributor has a parts counter, which is mostly busy selling snowplow parts during the winter. Quality is a parts distributor for Western snowplows, Flink spreaders, Buyers spreaders, and PTO parts from Dana and Muncie.
Quality would like to sell more retail parts because of the higher markup, he says. Most parts and equipment sales are handled by five salesman, four of whom work in Youngstown and the other in Detroit.
Neither location does telephone parts sales, but a national 800 telephone number is available for customers, Freeze says. Quality uses the 800 number in advertisements it places in American Waste Digest magazine, local newspapers, and the Yellow Pages.
Most of Quality's refuse equipment sales are made within its established territory of the northern one-third of Ohio, he says. Truck equipment sales for Quality are made in a more localized market near Youngstown and northern Pennsylvania counties that border Ohio.
Equipment Sales Territories Occasionally Quality makes refuse and truck equipment sales as far east as Philadelphia and State College, Pennsylvania, and as far west as the Indiana state line. Freeze recently sold a refuse container handling crane to Browning-Ferris Industries (BFI) in Telford, Pennsylvania, located between Allentown and Philadelphia.
The Detroit location sells refuse equipment in Michigan's lower peninsula south of a line through Flint. During the past five years, the City of Detroit has purchased over 100 refuse collection trucks from Quality. The city was purchasing the vehicles from another manufacturer before Quality sold Heil refuse collection trucks to the municipality.
The City of Detroit and BFI are Quality's largest accounts, Freeze says. BFI has a three-state region with offices near Pittsburgh, Pennsylvania, that purchases refuse equipment and parts from Quality.
When BFI and other nationwide refuse companies purchase parts, they publish prices they will pay, Freeze says. Even though Quality sells a lot of parts, the distributor makes most of its income from sales and installation of Heil refuse truck bodies.
When Smithberger started Quality in 1971, the economy was suffering and business was nowhere near as good as it is today, he says. But he was determined, and had faith that his refuse truck equipment and parts business would succeed.
Long-Time Heil Distributor Another person with faith was Joe Heil, who met Smithberger early in his career and signed him on as a distributor. The pair established a long-standing business relationship, and Quality has been a Heil distributor for over 27 years.
"Joe was a wonderful person who helped me however he could," Smithberger says. "At the end of the first fiscal year I was in business, Joe Heil wrote me a letter and told me how well I did."
At the time, Quality was much smaller with sales less than $1 million a year. Heil wrote Smithberger every year until his death.
"It's been an excellent relationship," he says.