The post-pandemic parts plan: Distributor and supplier solutions

FleetPride learned that size matters, and has gobbled up parts businesses like a great white shark does chum, acquiring 27 smaller distributors since 2020. These locations widen FleetPride’s parts distribution network, which includes 300 locations nationwide and five distribution centers, and are “another place for us to store some extra inventory,” Gamble noted.

And according to Jim Pennig, VP of Business Development, VIPAR Heavy Duty, a healthy inventory from a mix of multiple suppliers for similar products was key to success during the pandemic.

“Those with proper inventory levels rode out the pandemic with record sales,” he said.He attributed this to an “increased level and detail of communication with our distributors, as well as with our supplier community supporting the VIPAR Heavy Duty network.”

The e-commerce functionality has also expanded to include more administrative and user options for shop management, which aids in reporting, compliance, quotes, and reducing rogue spend, the company said.

In custom cases, FleetPride can even offer a form of predictive ordering.

“We also connect digitally with many of our customers who are able to let us know ahead of time that they’re going to need this part on this date,” Clinchy said. “And they’ve got the part on their shelf before the truck ever breaks down.”

Gamble said fleets could help “forward deploy inventory” by informing their distributor of duty cycle, region, and where exactly the trucks will be domiciled.

The pandemic “forced” FleetPride to work closer with vendors, Gamble said. This includes sharing forecasts and data “with [FleetPride’s] best and most strategic vendor partners that allowed them to ramp up production and helped them balance their cost better.”

This has paid off, said OE partner Delco Remy.

“The resources being committed to providing holistic customer solutions in this digital environment is really incredible,” said Nick Chelman, national accounts manager for Delco Remy. “We are doing our part to provide all Delco Remy product information to support our customers in the field through the FleetPride efforts.”

In VIPAR’s sphere, sharing info allowed for “a consistent and accurate gauge of product availability and other forces impacting the supply chain,” so the network could respond appropriately, Pennig explained.

He stressed fleets should also develop a “B2B transactional relationship with a distributor [which] helps significantly with expediting parts availability and the order and delivery process.”

True success all comes down to transparency, according to Brad Williamson, director of parts marketing and stratgey at Daimler Truck North America. He noted in a panel at the Heavy Duty Aftermarket Dialogue (HDAD) event in January that suppliers did end up sharing more information with the OEM during the pandemic, and were “more human with each” and “more transparent” about production issues. This included updating DTNA when too many workers were out sick to meet production goals.“A lot of times before the pandemic, there was a little bit of keeping your guard up, and I really feel like a lot of our suppliers stepped up in being open,” he said.

Williamson said sharing data and information is “a two-way street,” and the OEM also has to communicate with suppliers. He added the pandemic proved “ecommerce is here to stay.” DTNA launched the Excelerator platform in 2020, succeeding Pinnacle Truck Parts. The site can search via VMRS codes, VIN, product name, or part number, and loops in inventory info from the entire Dealer Management System, including Alliance Parts DCs.

“We’ve got to get our dealers parts, so we can get our customers parts, so we can get trucks back on the road, and literally keep the world moving,” Williamson said.

Manufacturer lesson learned: Destination Mexico

America, and the rest of the world, found out the hard way that relying so much on exports from one country can lead to ruin when the steady flow of Chinese products simply stopped when the country locked down.

In December 2022, China ended its “zero COVID” policy. This relaxed stance led to 250 million COVID-19 infections in China during the first 20 days of that month, according to figures allegedly leaked from China’s National Health Commission. The world’s largest production base has roared back in manufacturing activity, but manufacturers’ confidence in China has been shaken.

“China has been a difficult place to do business in the last three years or so, since COVID really changed some of the assumptions that we had about the globalization that was taking place in the previous decade or so,” said Kent Jones, president of SAF-Holland’s Jones at HDAD. “We’re reevaluating many supply positions that were single-sourced in China, coming to us in the U.S. and into our company in Europe. It was highly disruptive to the supply chain.”

See also: Redwood Logistics expands Mexico presence to match nearshoring focus

His co-panelist, Jeffery Porter, president and CEO of Velvac Inc., a maker of medium- and heavy-duty truck, bus, and RV parts, concurred.

“In the last four or five years we’ve been trying to move as much of our component supply back to North America as possible,” Porter said, noting that geopolitical events have also added to the urgency.

Instead of looking east across the Pacific, the heavy-duty chassis component manufacturer has turned south of the border to Mexico.

Mexico already makes a substantial portion of North America’s commercial trucks —half, according to SAF’s Jones. This includes Freightliner, Kenworth, Navistar, and Peterbilt models. Nearshoring is also attractive as the United States-Mexico-Canada Agreement (USMCA) dictates that at least 75% of auto and truck parts automobiles be made in North America.

In March, SAF-Holland broke ground in Piedras Negras, located in Coahuila, Mexico, on a 158,000-sq.-ft. facility plant to manufacture fifth wheels and other components. That factory is expected to open in August.

“This investment allows us to better meet customer demand, delivering our fifth wheels more quickly to tractor manufacturers, dealers, and customers,” Jones stated after the groundbreaking. “The additional manufacturing space not only enables us to serve our customers better but provides for future growth.”

Nearshoring to Mexico has many benefits.

“When we’re looking at key factors that influence where to put your production capacity—like availability and cost of labor, proximity to customers, proximity to supply base—I think all of those arrows point to Mexico as being a really good choice,” Porter said.

Velvac’s main plant is in Reynosa, Mexico, a border town due south of San Antonio, Texas.

“That’s all allowed us to be more cost competitive; we’re more responsive to our customers and have better control over quality at the same time,” Porter said.

Rob Phillips, CEO of Phillips Industries and CEO and founder of Phillips Connect, the third panelist at that HDAD discussion, is one of the industry’s biggest proponents of Mexican manufacturing.

“We’re very bullish on Mexico: I’m a huge fan of the workers, the level of experience from the industry perspective,” he said. “The college system is spectacular. So, we don’t have labor issues—we have people that line up [for work].”

Phillips Industries already had been producing wire harnesses in Saltillo, Mexico, for over 15 years, and in March celebrated the grand opening of a new 500,000-sq.-ft. facility. In Q2 2023, Phillips expects to make about 20,000 truck parts—cables, air hoses, harnesses, lighting, and coils—per week for OEMs, up from 11,000. For the aftermarket, production will increase from 28,000 to 40,000 parts per week.

See also: 'Just getting warmed up': Phillips expands operations in Mexico