Aftermarket meeting draws distributors, suppliers

The inaugural Aftermarket Distribution Summit concluded last week, drawing nearly 160 attendees for three days of issue-focused panels, technology updates and networking events on Amelia Island, Fla.

The new event combined the annual Commercial Vehicle Solutions Network meeting, the HDX Technology Conference and Truck Parts & Service magazine’s Truck Parts Seminar.

“I thought it was a superior meeting with exceptional programs and great takeaways for everyone who attended,” said Tom Stewart, president of Carolina Rim and Wheel and incoming CVSN president. “As incoming president, one of my goals is to get more members to understand the value of the Aftermarket Distribution Summit and to get them to attend.”

In an economic address by Michael F. Bryan, vice president and senior economist in the Federal Reserve Bank of Atlanta’s Research Department, the question on everybody’s mind – “Is it over?,” in reference to the economic downturn – was the theme.

The answer, he said, depended on your definition of “it.”

“If by ‘it’ you mean financial Armageddon, it’s probably, definitely over,” Bryan said.

Among the factors still weighing down the economy, he said, are high unemployment levels, the sharpest declines in industrial production since the 1950s and lack of consumer spending due to huge losses in wealth, job insecurity and economic fears.

Bryan notes that economic growth is about half of what normally is seen coming into a recovery period, so “recovery is going to be half or less of what has historically happened.”

On the plus side, the inventory of unsold homes is going down and the home sale index is on the rise, though up to half of that volume could be due to foreclosures. Home prices also have stabilized and even are rising in some markets, though still are far below pre-recession levels, he said.

“Look, we’ve never been here before,” said Bryan, who also is a college professor. “What I tell my students is the textbook was thrown out 12 months ago.”

The event included three panels – What Customers Want, What the Channel Needs and Protecting Product and Brand Integrity – each followed by roundtable discussions with panelists and attendees.

What Customers Want

The What Customers Want panel provided perspectives on aftermarket performance and where improvements can be made. The panel included Ted Coltrain, vice president and general manager of Indianapolis-based Dickinson Fleet Services, which serves 20 markets in 13 states and employs more than 200 service technicians.

Coltrain explained what fleet customers want from his service and repair business. The list included the best price, parts availability with same-day delivery, unlimited warranty and 24-hour turnaround. “Consistency is the name of the game,” he said, adding that they can provide consistent service experiences to their customers with the support of aftermarket distributors.

Noting that “relationships can last through the tough economic times like we’re in now,” Bryan Stanley, fleet manager at Clay Electric, headquartered in Keystone Heights, Fla., explained that his aftermarket choices are not driven solely by price.

Stanley, who is responsible for Clay Electric’s 300 cars and trucks and 110 pieces of auxiliary equipment, said parts quality was the top criteria, followed by availability/delivery. Price ranked third, and he said the aftermarket is doing well with its parts pricing.

What The Channel Needs

The What the Channel Needs panel featured three manufacturers and three distributors covering a wide range of topics that included product technologies, pending legislation and regulations, the access to information issue, and investments in technologies and employee development.

Terry Livingston, general manager-Americas for ArvinMeritor’s Commercial Vehicle Aftermarket, discussed product development and truck technologies and how they are being impacted by regulations.

Given the increasing sophistication and integration of equipment, Livingston advised distributors to partner with technology leaders and not just suppliers with the lowest price. “What you do today for survival may not help you tomorrow for long-term survival,” he said.

Gary Smalley, president and chief executive officer of Dayton Parts, offered his economic prediction for 2010. “I don’t think we can expect a V-shaped recovery to take place,” he said. “I think we can kiss that goodbye.” Smalley further predicted that Class 8 sales likely will lag behind the general economic recovery, noting that many trucks are parked, tonnage is down and mileage is down year-over-year by nearly 20 percent.

Bill Ryan, CEO of Point Spring and Driveshaft Co., offered the audience several suggestions for future success. One was to work with local schools and organizations to recruit and groom the next generation of workers, and another was to get into service if you’re just a parts distributor. “If you’re not in it today, you’re not going to be around,” he said.

Protecting Product and Brand Integrity

The six panelists for the Protecting Product and Brand Integrity session on the last day of the summit provided a diverse collection of views, ranging from exploring the value of brand to the strength of product brands, and from product positioning to the role of relationships.

John Powers, president of Florida Powertrain & Hydraulics Inc., explained how he has built the company’s brand and the subsequent rewards, including “instant credibility” when making a sales call on a new prospective customer.

Will Rodgers, a branding expert and principal at SHR, provided the audience with a soup-to-nuts overview on the value of brand and how to define and cultivate it. He included examples from Volkswagen and its hugely successful rebranding with the launch of the new Beetle in 1998.

Harold Krivan, a senior partner with Brimstone Consulting Group, provided a case study of the launch of the Euclid brand and how it helped shape how the aftermarket does business today.

Technology Partner of the Year

HDX Services, a wholly owned subsidiary of Datalliance, presented its first-ever “Technology Partner of the Year” awards at ADS. ArvinMeritor was selected as the “Manufacturer Technology Partner of the Year,” and Des Moines, Iowa-based Midwest Wheel Companies was named the “Distributor Technology Partner of the Year.” The awards were announced and presented to both companies during the closing reception at the summit.

As sponsor of the awards, HDX organized an independent board of distributors to nominate four top manufacturers and did the same with a board of manufacturers to nominate four top distributors. The entire HDX distributor community voted to determine the winner of the manufacturer award; the HDX manufacturer community voted similarly for the distributor award.

“HDX congratulates ArvinMeritor and Midwest Wheel Companies,” said Edward Kuo, executive director of HDX Services. “These two companies epitomize the spirit of this award. Both have been proactive pushing HDX-specific projects like EDI, VMI and the Price File Library, as well as creating other company-specific ways to enhance their relationships with their trading partners. They have also had active representatives on HDX standards committees and continually look for new ways to benefit the independent aftermarket side of this business.”

The criteria used for both awards were successful technology implementation, willingness to automate processes through new technologies, technology leadership and vision, and industry advocacy. “Though there were many worthy companies nominated for the awards, ArvinMeritor and Midwest Wheel truly stand out as technology leaders in our industry,” Kuo said.

The 2010 Aftermarket Distribution Summit is scheduled for Sept. 12-15 at the Grand Geneva Resort and Spa in Lake Geneva, Wis.