BRUCE HENDERSON, FOUNDER of the Boston Consulting Group, once said: “Darwin is a better guide to competition than economists.”
William Ryan, chairman/CEO of Point Spring & Driveshaft in Pittsburgh, Pennsylvania, said the same thing applies to the truck industry. The stronger, more adaptive companies will eliminate the companies that don't adapt to changing technologies.
“I believe the most likely scenario for our industry is a continuation of consolidation,” he said in “The Heavy Duty Aftermarket: Past/Present/Future,” the opening general session of Heavy Duty Aftermarket Week.
“In the future, global suppliers and regional distributors will dominate the market. They'll be more efficient and stronger. The rich will get richer and stronger, the poor will get poorer until they're gone. You want to be one of the rich or one of the poor?
“Supply-chain management is more than just a buzzword. It's one of the new, yet proven technologies making the process from management to the final sale and delivery as quick, simple, efficient, and cost effective as possible. Everybody must be ready for Vendor Managed Inventory (VMI) or Electronic Data Imaging (EDI). Today, would you consider operating your business without a telephone, computer, e-mail? In the future, if you're not VMI/EDI-capable, it's possible that suppliers will not consider doing business with you because of the expense you'd add to operational costs.”
He cited a quote from H Ross Perot: “Business is not just doing deals; business is having great products, doing great engineering, and providing tremendous service to customers. Finally, business is a cobweb of human relationships.”
“People much smarter than me have reflected on relationships for a long time,” he said. “A relationship exists between people, not organizations. A relationship with a customer, vendor, employer or investor, by definition, is a two-way street. Your counterpart will maintain a relationship with you only so long as they get what they want. Relationships are costly to develop and maintain. Given finite resources, you can't invest in a relationship out of proportion to the benefits you will receive. You have to give to get, and get to live. Respect is at the heart of building relationships.
He said his company operates on four principles:
Its suppliers and customers also are its friends.
Each party must bring a strength to the relationship.
Everyone is not good at the same thing.
Relationships require work. They don't just happen.
“In the past, relationships were based on a good-ol'-boy mentality, where a simple handshake was all that was needed to solidify a big deal,” he said. “Our industry is filled with companies that forge relationships just that way. Point Springs is celebrating its 80th anniversary this year. ArvinMeritor is over the century mark, and we've been doing business with Bendix for over 50 years.
“In the constantly changing environment we find ourselves in, more must be done. Technology is changing at the speed of light. What was a successful business practice five years ago makes you unresponsive today.
“Customers depend on distributors, and distributors depend on suppliers. Those of us who integrate our processes are able to maintain the strongest relationships. Each side brings a strength to the table that others don't provide. The suppliers' side has the resources to continue investing in new technologies that a distributor could not provide for itself. When the distributor incorporates these new technologies, the product moves from the supplier to the end user more efficiently.
Tom Gosnell, president of Commercial Vehicle Systems for ArvinMeritor, spoke about the formation of the Heavy Duty Aftermarket Week.
He said that five years ago, when the initial White Paper was presented to the Heavy Duty Manufacturers Association (HDMA) board, it was learned that one manufacturer participated in 38 different individual national heavy-duty events in a calendar year, and that the average independent distributor spent three weeks attending and supporting those events.
Heavy Duty Aftermarket Week was designed to serve as a platform for future meetings of a large number of trade associations, professional groups, marketing groups, and others in the heavy-duty parts industry.
“It's intended to treat the aftermarket like the $15 billion business that it is,” he said. “We hope this is the future of the heavy-duty aftermarket in North America. And this is what we hope the event says: That we embrace our channel partners.
“It has not been easy. Collaboration among so many different constituents never is. But at the end of it all, here we are. We can't rely on our past. We have to continue to act decisively and do the different things in order to thrive in the industry in its increasingly global stage.”