There were the expected criteria such as Total Compensation (base pay, bonuses, vacation, and sick day allotment), health and benefit plans. Without solid overall compensation and benefits packages, no fleet would make the grade. But just as important was the criteria that measured less tangible factors which include training, coaching, advancement opportunities, commitment to personal growth, family support, and team building.

This tells me several things that I think more companies should be aware of no matter what business they are in. Years ago I was attending a technology conference and heard a talk by a man who founded and ran a very successful company. His talk was about motivating and retaining people. His message was simple: challenge and recognition were the foundations of building great teams. Challenge creates the environment to excel and recognition on many levels, not money, is what retains people. He gave a quick but powerful illustration. At an awards dinner, he handed out bonus checks, each with a bottle of very good champagne. Later in the year he discovered that the recipients remembered the champagne more than the money; the visible recognition for their great work.

Drivers have a tough job and two of the trucking industry’s most important challenges are driver retention and driver safety. You can bet that these top 20 companies have the lowest driver turnover and best safety records because they know that it is not only money but family support, training, coaching, and other factors that recognize the driver as an important part of the company’s success.

Another interesting thing is that there is very little relationship to the size of the fleet and the ranking. In other words, many of the important factors for success don’t cost much. This is one competitive advantage that large fleets can’t dominate. Great companies, large or small have great leaders at the top and it is clear that all of these companies’ leaders understand the importance of recognizing the drivers and knowing what motivates them and retains them.

Congratulations to these fine fleets.

I ended my last blog with the question of what are some essential things to know and do to be able to sell online so you can take advantage of this new, but growing opportunity. There are some things that you can do that will set your company apart from all the rest:

• Accurate inventory – if your site says you have part in stock, the buyer needs to be able to trust that. Since they are paying for the part online, it’s critical that you have it to ship.
• Accurate part numbers and descriptions – online buyers rely on you to provide them with accurate part numbers and good descriptions. It is an effort to audit part numbers and enrich descriptions, but it will pay off in customer loyalty.
• Pictures – I won’t say it. Oh, yes, I will. Pictures are worth 1000 words. Good pictures, even from different angles will bring buyers back again and again. Some truck parts look alike with small differences. Multiple pictures can make the difference between a sale or not.
• Alternate part numbers – You may not have the part number the buyer is looking for, but you might have the same part stocked under a different number. Giving the buyer an alternate choice will lead to more sales and repeat customers.
• Direct, fast access to a real person – No matter how good your site is, people still want to talk to a knowledgeable person when they have a question. Have a clear phone number or a “push-to-talk” that gets them directly to customer service.

If you have spent any time at all searching the web for truck parts you have seen a wide range of sites from good to ones you will never return to no matter what. Some are clean, easy to navigate, and the information is readily available. Others are cluttered with specials, impossible to navigate and have very little useful information. It is worth some time to write down what you like and don’t like about different sites. Remember, truck parts sales are B2B, Business to Business. Buyers are looking to buy something now for a reasonable price from a reputable seller.

If there was ever a time to become an online leader in the heavy duty truck parts market, this is it. It doesn’t matter what size company you are to develop a loyal following online if you understand what is really important to the online market.

If you are like me, you are having a difficult time figuring out trends in the fast changing world of procurement. As a seller of heavy duty truck parts, you have built up a great company, whether it is a local independent store or a national chain. You have built a loyal customer base by providing quality products, excellent service, and fair pricing. Sounds great so far. But the sands are shifting a bit, even in the heavy duty truck parts market. Understanding how things are shifting will be the critical difference between continued success and growth, and being able to hold on the local or national truck part market share that you currently enjoy.

The difficulty in following these trends is that the change is subtle and happens quietly and before you know it, your market has change dramatically. For example, just two years ago, eBooks represented a small fraction of the overall book market. Last year, the eBook market, caught and passed the paper book market and now accounts for 80% of new book sales. Companies like Borders missed the trend and are now a part of history.

How did that happen and can it happen to the heavy duty truck parts market? First, eBooks got traction because tablets like the iPad, the Kindle, and the Nook, became affordable and more and more titles became available. But even before that, the internet became as common as the television in every household and the younger generation adopted it with a vengeance. Game over.

But something else much more subtle was taking place that clinched the deal; analytics. The eBook sellers like Amazon and Apple track searching and buying trends down to the smallest detail. What books are they searching for, from what zip code, by whom. How old, what gender, what income level and so on. You get the idea. The result is a very smart e-Commerce world. Game over.

The smart book sellers adopted the eBook market and brought new customers into their stores so that both eBook and paper book shoppers were taken care of. These companies sold “rich content” and one-stop shopping and succeeded where “print only” stores have struggled.

Back to our world, heavy duty truck parts. Truck parts, unlike books, are not discretionary, are much more complex, and are critical to the operation of any fleet. Getting the right part at the right price from a reputable seller is fundamental to the industry. To date, most fleets rely on local suppliers who know their business, know parts, and provide high value services like inventory, pickup and delivery, part exchanges, and fair pricing. But as I write this, more parts buyers are spending more time on the internet sourcing hard-to-find parts, looking for better pricing, and even better information. And as websites get smarter by tracking all the searches and purchases, they will become more like the local supplier; they will know the customer, tell them when a part has been superseded or obsoleted or what alternate might work if the primary part is unavailable.

And, like the online consumer market, the young parts buyers are very comfortable with shopping online.

So what does the independent truck parts seller do to stay in the game? Like the smart book sellers, do both. Use your already excellent business as a platform to add to your market. Your local parts buyers will have a choice to buy from you online or on the phone. Buyers from outside your market may buy that hard-to-find part that you have on your shelf.

Sounds good you say, but how do you know what is the best way to get started?

More on that later.

How is this trend going to impact the very traditional world of the commercial trucking where supply channels have been established over many decades and local, personal service is highly valued? The short answer is that online buying is gaining traction and that there will be a significant impact. The longer answer is that there are pros and cons to buying online and it is going to take some time for this industry to figure out the balance.

Some of the challenges of online buying are due to the fact that in the heavy duty truck parts industry, there is more complexity than consumer shopping because of the importance of part numbers. When you buy a shirt online, you don’t care about the part number; you care about the size, the style, and the color. But when you buy a D2 Governor, it is essential that you have a correct part number, or that the seller can identify the correct part from your VIN (Vehicle Identification Number). Also, parts can have many part numbers since the same part can be sold by OE’s and aftermarket sellers, each with its own part number. Successful e-Commerce for heavy duty trucking must be able to manage this complexity and provide the appropriate choices for the buyer to ensure that he or she gets the right truck part.

Fleets depend on local part suppliers to provide those important services that add so much value to fleet operations and maintenance. The expertise of the customer service people and the personal knowledge they have of their customers is invaluable to the efficiency of their customers’ operations. However, knowledgeable customer service folks are becoming a rarer breed as their replacements are harder to come by. e-Commerce sites are getting smarter and are able provide the expertise that the customer service person does. As online sites get smarter, they will know what equipment you have, what your buying trends are and what companies you have pricing agreements with. They will also show you suitable alternate parts if the primary part is not available. And they can get competitive quotes for you.

Another challenge of online ordering is that unless the seller is local, the parts will have to be shipped rather than delivered. So you may not be able to get it same day. The same is true for returns; you will need to send them back rather than have them picked up by your local supplier. The B2B (Business to Business) world is learning from the B2C (Business to Consumer) world that in many cases, but not all, the advantages of online shopping outweigh the advantages of local delivery. For regular stock items, buyers may be able to get a price advantage buying online. And for hard-to-find parts, buyers can search the whole country quickly and efficiently on some web sites. Good sites can have Make-Model-Year information, excellent pictures, and specifications that are not available from local suppliers.

The bottom line is this: local part suppliers will continue to provide the high value services that they are so good at. And online buying will grow more and more quickly as websites get smarter and buyers get used to buying online. So the question I ask myself is, why can’t they be one and the same? Why can’t local sellers have really smart websites to service their local customer base for everyday parts and a larger market for truck parts they have that a buyer in another part of the country is looking for?

More on that later…

Just a quick overview of VMRS classifications for those of you who are not familiar with it; we get many calls from folks who have heard of it but aren’t quite sure how it works and how it will help them in fleet management. VMRS Code Key 34 codes parts to three levels, with 3 digits each.

Here’s an example (a complete list of codes is available from ATA):
013 Brakes
013-002 Rear Brakes and Drums
013-002-003 Actuating Link – Self Adjuster, Rear Brake

One of the key pieces of information that VMRS provides is about the application in which the part is used. For example, a brake pad can be used in more than one location on the truck and it can be extremely valuable to know the frequency of replacement at each application. Are pads being replaced at one location more than the others? With VMRS each location has a different component code even though it may be the exact same part.

Now that the OEM’s are adopting VMRS, this information can be reported to them which can lead to improved truck part designs. If they collect this kind of information from fleets across the country, they can develop much more effective failure analysis and product improvements.

If your heavy duty truck parts are coded to all three levels and parts used for maintenance are tracked in a fleet management system, the information that can be gathered can be extremely valuable. You can now find out which parts are being replaced too frequently and which parts are being replaced in unscheduled maintenance.

With a VMRS code system, your fleet management system can do the reporting for you and eliminate the need to prepare written reports (which may or may not get read). Now you will know what part, at what location, on what piece of equipment, and how often.

VMRS has been adding equipment types over the years as well and now covers most equipment for diverse fleets. PartsRiver has been involved in providing codes for industries such as buses, ground support equipment, fork lifts, and heavy/off road equipment. All codes are assigned by ATA. Some organizations are now requiring suppliers to provide the VMRS code as part of an RFP.

Adding VMRS codes to a parts master and management system is usually well within a fleet’s capability. Here are a couple of things that can help the VMRS project go smoothly.

• Assign one person to be responsible the project who is familiar with parts and has some familiarity with your fleet management system. Give him or her resources needed like access to TMC and to your fleet management software provider.
• Contact Jack Poster at TMC and let him know you are starting the project. Jack can provide valuable help, training, and advice for getting the project done right.
• Contact your fleet management service provider about integrating the codes into the parts master.
• It may make sense to add codes to those parts that are used most frequently.
• Set a timeline to get the job done.

With rising costs and the need for increased efficiency, VMRS can help you achieve your goals.

If you have done a VMRS project, we would love to share your experiences with our readers.

Now, e-Commerce, or online selling is gaining a foothold in the heavy duty truck parts industry, albeit more slowly than many other industries, and it is beginning to change the parts supply landscape. For some suppliers, this may seem like an opportunity and for others it may seem like a threat to the traditional way of doing business. The good news is that e-Commerce is not mutually exclusive to the local supplier’s traditional business. Rather e-Commerce can add sales to a supplier without interrupting its existing business. e-Commerce is not going to replace the valuable services that a supplier is already providing to its local customer base, but it can deliver benefits that will increase sales and benefit the supplier’s ability to service its local customer.

Although online shopping is not substitute for a friendly voice, it does provide some benefits that cannot be ignored by the buyer or the seller. Here are some that small suppliers can realize that, until now, were available only to larger companies:

Scale: An online store loves company and can handle one or one thousand customers at the same time whereas your customer service people can only talk to one person at a time.

Reduced parts cost: As your online store grows in sales, you will enjoy better negotiating leverage with its suppliers.

Offer a choice: If the part that the shopper is looking for is not available, the site can steer him or her to a suitable alternate part that is in stock. Or if the requested part has been superseded, the system can let the buyer know and offer the replacement part.

Price: By using a login and password for repeat customers, the system will know what price the buyer gets.

A custom shopping list: Most buyers buy a limited list of parts repeatedly. Once they login, in the system can offer them their parts list making it very easy for the buyer to place an order.

24×7: Online stores are open 24×7, even on Christmas.

Process: Once the store is set up it manages payment collection, tax collection, shipping costs, and shipping notifications with a tracking number. And all of this can be posted to your internal order processing and accounting system.

Reports: The online store sees all and reports all. It knows what parts were searched, for how long, what page he or she looked at next, what they bought and what they didn’t buy. It knows what ZIP code the buyer is located in. How much of what was sold and for what kind of gross profit? And all of this part sales information can be delivered to the supplier in easy graphical charts any time and for any period.

People: Finally, no online store is complete without good customer service people ready to talk to a shopper. If you are like me, shopping online is fine, but when I have a problem, I want to get to a real human being quickly.

My sense is that the small supplier that implements a good e-Commerce system to complement its traditional business is going to experience real growth into the future. It’s not a crossroad after all, but rather two parallel roads, both heading in the same direction.

First are unscheduled repairs. When a piece of equipment needs an unscheduled repair, buyers will do what is necessary to get the truck back on the road. And that may mean buying a part that is not on contract and/or not approved by the company. At the time the cost of a part may seem unimportant compared to getting the truck fixed, however all of these maverick purchases can add up to a significant reduction in profits.

Second, if a trucking company has multiple maintenance locations, often local suppliers will sell different brands that are not on the fleet’s purchase agreement. Even though the heavy duty part that the fleet buys will work fine, it is still “off contract” and not being counted against the parts purchase agreement. And because it is a different part number from a different supplier, corporate will never know which “off contract” part is the equivalent to the “contract” part. As many of the fleets we work with now know, the aggregate over spend can be very large. Corporate doesn’t want to slow down the repair time, but it does want visibility as to what is being purchased and how its agreements are being affected.

How does a fleet manage these apparent conflicting priorities? An effective has two parts. First, develop approved alternate parts in your item master. If a contract part is not available, you will be able to see an approved alternate and an approved price. Although this requires managing superseded and obsolete parts, it is well worth the effort. This allows buyers to buy an approved alternate or “off contract” and it still gives Corporate the visibility of what is being purchased the price paid compared to the contract price. Also maintenance locations can ask their local suppliers to stock parts that are on contract to minimize off contract spending.

Second, implement at least some basic analytics. Once you have these alternate parts connected to the contract parts, both the maintenance buyers and corporate will see exactly how they are managing their parts spend. And when contract negotiation time comes around again, corporate will have more leverage to negotiate for better prices for truck parts. With good analytics it is easy to see what parts are being purchased, what the price paid was, and whether there was an approved part available.

This may sound like a daunting task, but it is very doable. If you have questions about how to implement a program like, this, please send me an email.

We can answer one key question now: e-Commerce is here to stay and will be a key strategy of parts sellers going forward; as the younger generation moves into managing truck fleets, e-Commerce will follow. The question that parts sellers need to answer is: do you build an e-Commerce site or outsource one? Here are some benefits for outsourcing which we see from our experience.

Stay focused on your core business, taking care of your customers – Building an e-Commerce site is time consuming, expensive, and must be continually managed. It is very easy to absorb too many company resources at the expense of the customer service and reputation you have built up over many years.

Get it up and running quickly and affordably – Think of it like buying or building a television. I can buy a TV today, bring it home, and watch it tonight, for an affordable price. Trying to build one, especially with my skills, would cost me a fortune and it probably would never get done right. And I would most likely have a bunch of parts still on the work bench when I thought I was done. Not to mention that by the time I tried to turn it on, they would have come out with some new model that makes mine obsolete. e-Commerce is similar; your company can get a fully functional, fully tested, up-to-date e-Commerce site up and running very quickly for a fraction of the time and cost you would incur to develop one in-house. Your commitment is to provide the parts master, pricing, perhaps images and cross-reference.

Keep up with the times – a good e-Commerce provider will continue to update its product, keeping your site state-of-the-art. Trying to do that in-house is very difficult, not to mention expensive. Let your people focus on your customers and improving the great service you offer.

Managing the details – a smooth operation is one that has a good handle on the details; processing orders, shipping, invoicing, sales tax, processing returns, and so on. All of this needs to be managed by an e-Commerce site. A good e-Commerce provider has already figured this stuff out so that you don’t need to.

Managing the money – an important part of e-Commerce is collecting payment before a truck part is shipped which means many payments will be by credit card, PayPal and wire transfer. You may also have regular customers who have an account and pay by invoice. Your e-Commerce provider can manage all of this, including the credit card transaction fees. And because the provider is processing more credit card charges collectively than your company does, the fees are usually lower.

Get smart faster – e-Commerce will give you amazing information about your new customers and marketplace. Analytics reports can tell you What – Where – When – How – and Why buyers came to your site, how long they stayed, what they looked at, whether they purchased or not. You can focus on what you need to do to improve your close ratio, not on the details of running the site.

As always, there is more, and I would love to hear any thoughts or feedback you have. e-Commerce is growing and here to stay offer huge opportunities for heavy duty truck part companies who take advantage of it.

It’s not just what parts go into your items master, but also, who, how, and why they go in. If your company has more than one maintenance location where you stock truck parts, it becomes more difficult to make sure that every part entered into your item master is accurate and necessary. Maybe this list from one of our customer’s parts master will give you a good idea of what I’m talking about.

(Click to enlarge image)

The same Webb Wheel drum is in the parts master with 7 different part numbers and was purchased with 17 different prices. The highest price is 256% higher than the lowest price. Clearly, the company has been seriously overspending, at least on this part. So even in a well-run company, a runaway parts master can erode profits.

There are some basic ‘best practices’ rules that any company can implement and get great results very quickly. Here are a few:

• Assign one person in the company to be responsible for every single part that goes into the system. This Gate Keeper is the most important piece of good parts master governance.
• Verify that the part doesn’t already exist under another part number. A Baldwin filter from NAPA has a different part number that the same filter from Fleetpride.
• Determine if the new part is superseding an existing part number. If that is the case, the inventory needs to be consolidated or noted to use up the old inventory before buying the new number. If the new part number is a replacement and you are on a LIFO inventory system (Last In First Out), you will need to adjust the replacement cost of the existing inventory.
• Make sure the new part number is correct. An ‘S’ instead of a ‘5’ is all it takes to create a new part that will never be connected to the existing correct number.
• Schedule regular parts master reviews to determine and fix duplicates, erroneous part number, price errors, and so on.

I would love know what some of your ‘best practices’ are so we can add them to this list.

First they wanted to limit the amount of time they spend on the phone; while they are on the phone searching for one part, they can’t be searching for another part that is just as critical. They often have to wait for a call back from local or national part suppliers. And if it is after hours, there is not much they can do until the next working day.

Second, they wanted a reliable way to find part numbers, alternates, superseding numbers without having to surf the web or make a lot of calls. Often, form-fit-function parts are acceptable and in some cases, “will work” parts will do the job at least to enable the truck to get back on the road.

Third, they wanted to be able to request price and availability for multiple parts from multiple sellers simultaneously. If they could accomplish this, they told us, the time savings would be huge and they could ease the constant pressure to get truck parts in house to complete repairs and make customers happy. Everyone would win.

The final result of the focus groups was a concept for a website that would do three things. First, it will help them identify a part number, its superseding number, or form-fit-function alternate parts. Second it must identify parts sellers who might have it in stock. Third, there must be a way to get pricing and shipping information from several sellers with just one request. Sounds great but how is all this going to happen?

To accomplish all this, you need to put a few things in place. First you need a parts database that will have the part numbers that are being searched on as well as supersede and alternate part numbers. Second, since this is going to be a very large database, there needs to be a search engine that can return results quickly. Third, you need to know which companies carry at least the product line of the part that the buyer is trying to locate. Fourth, the site will need to process truck part requests to several sellers and quotes back to the buyer.

The focus group members felt that this would enable them to search for and buy parts much more efficiently and keep their mechanics and customers happy, not to mention the reduced pressure on them to deliver. Now that this site is a reality, it will be interesting to see the new requirements that new focus groups come up with. I would love to know what you think would be a major improvement.