Distributor Success: Technology and Supplier Diversification
Gain insights into the evolving landscape of the distribution industry, highlighting the importance of diversifying supplier bases, embracing technology, and investing in training.
Episode 271: In this episode, David McCleave, Director of Aftermarket for Hendrickson, explores the challenges faced by distributors and the essential factors that contribute to their success.
By understanding the impact of the pandemic on the supply chain, the importance of supplier diversification, and the role of technology, listeners gain valuable insights to make informed decisions for their businesses.
Implementing the shared insights empowers distributors to enhance productivity, maintain customer loyalty, and remain relevant in a dynamic market.
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Sponsors of this Episode
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Transcript of Episode
Jamie Irvine:
You are listening to The Heavy Duty Parts Report. I’m your host, Jamie Irvine, and this is the place where we have conversations that empower heavy-duty people.
Thank you so much for listening to this week’s episode of The Heavy Duty Parts Report. As you see on your screen, or you might be able to hear right now, this might be looking and sounding a little bit different than what you’re used to, and that’s because of a very unique situation that has occurred. And we wanted to take a few minutes before we had our conversation with Dave McCleave of Hendrickson, which by the way was just an absolutely great conversation, a lot of trends of the industry. I think you’re going to love this week’s episode, but why the different setting? Why is my whole team on here? Well, it’s because of the wildfires in Canada. Many of you in the States may have seen on the news that the smoke from Canada has descended upon the Northern States of America. And this is a absolutely unique situation.
It is affecting one member of this team personally, and that is me because under an evacuation order, we had to flee our home. This is the second time so far this spring we’ve had to flee our home. The fire is over 300,000 hectares, which is about the size of the state of Rhode Island, and it is about a mile from our town, our hometown. So Diana, you’re our Chief Marketing Officer and you’re safe and sound in Indiana and Taron, you are a Digital Media Producer and you’re safe and sound just a few miles down the road from where I am camped out.
Unprecedented time. So we very are very, very fortunate. After the first evacuation five weeks ago, I bought a motor home off my brother-in-law and I’ve been restoring it ever since. It’s a 95 E350 Ford with a 460 V8 and a Vanguard motorhome body. And I literally got it completely restored this week. My wife cleaned it, we packed it and left our house. So we drove 150 miles west, or sorry, east, and we went to my wife’s cousin’s acreage outside of the city of Edmonton. So there’s a seven acre property and all of our family have their travel trailers and motor home there. So that is where we are camped out. You might even be able to hear my generator going right now running the AC because it is as hot as Hades here right now.
Diana Cudmore:
Well, I’m really glad that you’re safe, Jamie, and that the whole family is safe. 150 miles seems like just enough to get away from that. So that’s good news. That’s good news. What about you, Taron, are you, I know you’re in Canada too, so are you safe?
Taron Hohensinn:
Yeah, thankfully I’m safe. I’m about two hours away from the fire. I do have a lot of family where the fire is. They’ve also been evacuated, but thankfully sounds like everyone’s okay. Parents hit a deer, but besides that, everyone is okay, which is good to hear.
Jamie Irvine:
Yeah, I couldn’t believe that. So Taron’s mom hit a deer, totaled her nice new car. Fortunately she’s not too badly injured. The car I think is a write-off, but they safely made it to their destination It’s times like this that we talk at the end of every episode lately, I don’t know if people have been listening for a while, they might have started to hear us say, Be Heavy-Duty and what does that mean to us? Well, it’s not just the profession that we’re in. It’s a way of thinking and it’s a way of being and how we conduct ourselves. And to Be Heavy-Duty is to be resilient, to be strong to in the face of really difficult times to rise to the occasion and to work. That’s what a heavy-duty piece of equipment does, and that’s what heavy-duty people do.
So I just want to say thank you to the over 500 firefighters from around the world. There are firefighters from Europe, from South Africa, from New Zealand, from Australia and from America who have come to Canada to help us fight those fires. And some of those firefighters were deployed to the Edson Yellowhead fire and are working right now to try to save our homes. There are heavy equipment operators, there are truck drivers and first responders, other first responders who are all risking their lives in the effort to save our homes and our town. Unbelievable. Truly a testament to the type of people that are in this industry. And from everyone at The Heavy Duty Parts Report, we certainly want to extend a big thank you for all the effort that’s going into taking care of them, of taking care of our town, taking care of our homes, and protecting us, and giving us that window of opportunity to escape while they stayed behind and risked everything. Unbelievable.
Taron Hohensinn:
Yeah, absolutely. And it’s been a long month for all of them too,
Diana Cudmore:
That’s for sure. And thank you, Jamie, for giving us such a good example of what being heavy-duty means. Your ability to be courageous and still continue to lead our team and to remain positive and optimistic is really just exemplary.
Jamie Irvine:
Well, thank you. At the end of the day, what really matters is our loved ones are safe. Property and physical belongings, although some of them are cherished, maybe lost, and I can’t lie, I am definitely feeling the stress and the strain and the worry about that and what the future would hold for my family and for people I care about. But at the same time, I know two things. I know one, should the worst happen, we will rebuild. And two, as long as we have that heavy-duty spirit, we will have the inner strength to be able to endure whatever comes. And this unfortunately may not be the worst thing we have to face in our lives. So that’s just the way it goes. And I think being resilient is something that maybe the younger generations aren’t being taught to the same degree that we were. And I think that’s a mistake. We need to teach our young people how to be resilient. And I think the best way to do that is to demonstrate it through our actions. So that’s where my motivation comes from.
Diana Cudmore:
Absolutely. Yeah, living through the pandemic is one form of testing that resilience, but then you get a much, much closer threat to life and loved ones that really can give us the stress test that we need in order to show up and be resilient in our lives.
Taron Hohensinn:
And sometimes through these trials that we face in lives, it brings us closer together with our friends, our family, and sometimes our coworkers too. Brings us closer.
Jamie Irvine:
Yeah, I was just going to say the outpouring of support from the industry has been incredible. I know that you guys have been inundated with messages from people who are checking in. How are, how’s everybody doing? How’s Jamie? How’s Taron? Are they safe? I’ve, my phone just blew up with messages from all, literally all over North America, but also from around the world because we’ve got partners that are truly global in nature. And so we’ve had messages all the way from countries like India and Turkey and Europe and many of the countries in Europe like Denmark and others, where people who know us and who have worked with us, whether it be at The Heavy Duty Parts Report or with our consulting business, the Heavy Duty Consulting Corporation, either way, they’re worried about us. And that outpouring of support has been amazing. But to me that’s a testament not just to how great our team is, but how great the people in this industry actually are. I mean, salts of the earth, the kind of people who if you had to go to war, those are the kind of people you want to go to war with.
Diana Cudmore:
Absolutely. Yeah. Well, thank you Jamie for giving us such a great check-in and for sharing your positive energy. And we’re going to be talking to Hendrickson right in this episode.
Jamie Irvine:
Yeah, that’s right. So back in, what was it, April? We were at HDA Truck Pride Annual meeting. I got to sit down with Dave McCleave from Hendrickson. We got to talk all about trends in the industry, what Hendrickson is specifically doing to help the industry. And it’s funny, I used to say that if the end times came, we’d still put out an episode next Monday. And although the end times may not be here, the fires of hell came very close to our front door. And we’re still going to put out an episode on Monday, so that’s why we’re recording this right now.
Diana Cudmore:
It might look a little different, but we’re still going to keep our word to our audience for sure.
Jamie Irvine:
That’s right. Our audience is everything to us. We keep our word. And so thank you big thank you to my team. For everyone listening right now, I just want you to know these are two of the people who have been with me from the beginning. They believed in the vision. They have been supporting me from day one. Without them, this doesn’t happen. And so to both of you, thank you and let’s listen into the conversation with Hendrickson. And after the end of this episode, we’re just going to exit right out of that interview and we will close the episode and hopefully next week’s episode, we’ll be back to normal. But I don’t know that that will be the case because it doesn’t look good right now. It looks like this is going to be an evacuation that’ll be for the long haul, so we’ll see what happens.
But to everybody, thank you for listening. I hope you appreciated hearing about this update and enjoy the Hendrickson conversation. We’re going to take a quick break to hear from our sponsors. We’ll be right back. This episode of The Heavy Duty Parts Report is brought to you by FinditParts, your ultimate destination for heavy duty truck and trailer parts. Discover a vast range of parts at finditparts.com. Don’t spend hours a day looking for parts. Instead, visit finditparts.com and get them right away. Parts availability and quality have a big influence on fleets and owner operators’ total cost of operation. If they can’t find a part, it means more downtime. If they install a low quality part and it fails, it means even more cost. Like tow bills, hotels, meals for the driver and lost revenue. That’s why we recommend Sampa. They manufacture a wide range of advanced parts for commercial vehicles. Their website has an intelligent product search engine and broad coverage of suspension, steering, and fifth wheel components. Expect More. Expect Sampa. Visit sampa.com today.
David McCleave:
Hi, I’m David McCleave. I’m Director of Aftermarket with Hendrickson.
Jamie Irvine:
David, welcome back to The Heavy Duty Parts Report. So glad to have you here. Again, you’re somebody with over 24 years of industry experience, seven years in your current role. Glad to have you back on the show.
David McCleave:
Thank you, Jamie.
Jamie Irvine:
And these events give us that opportunity to come together. We’re at HDA Truck Pride’s annual meeting. We’re here with really the heart of the independent service channel. We have 150 members with parts stores, service shops. Over the last couple years, a lot of guests on the show have talked about the impact the pandemic had on supply chain. We had a real shortage of product. How is that changing now that we’re in 2023?
David McCleave:
Certainly early on it was a supply issue of getting product, there’s no doubt about it. And then as materials became available, then became a labor concerned to get it get product to the marketplace. I think what I’ve seen happen is you’ve seen distributors sit there and say, I can’t put all my eggs in one basket anymore. And they’re starting to diversify their supplier base. They had to because when someone come in looking for a part and they didn’t have it from their primary supplier, they were forced to go do the right thing and find it somewhere. And I think that’s made, created some change in the way they supply.
Jamie Irvine:
Well, and that raises another issue because when I was starting in the parts business 25 years ago, you really could, within a year or two, you could memorize a lot of the products because they were very repetitive, right? Yes. There’s a lot of mechanical systems. It was a lot of the same stuff. That’s all changed, technology on equipment it continues to evolve. It’s making it more complex. So what have you seen when it comes to getting access to the right data around the part, the specific part needed?
David McCleave:
Yeah, so we just talked about inventory. Inventory’s always been important. It was always key if you had availability was key. I think that’s more important than ever. Now, I said, however, people have inventory now. So it comes now to who can identify the right part the fastest. And I think technology is really kind of enabling that with all kinds of digital resources. The websites themselves have gotten extremely powerful in what they can provide in the way of rich data. And I think it now comes down to the person behind the counter or even an outside parts salesperson that says, I can identify the right part the fastest. And by the way, we have it because inventory’s an anti to the game anymore. Yeah.
Jamie Irvine:
Okay. So I have observed in the last couple years, and the thing that I have, I believe is going to be one of the biggest competitive factors moving forward, is not necessarily kind of what I call the barriers of entry into the business, quality products, a wide range of products available, delivered quickly at competitive pricing. To me, that’s the minimum now to be in the business. Productivity, making your customers more productive is the battleground that we’re going to have to really distinguish ourselves because there’s not enough people and there isn’t going to be enough people. What thoughts on that? What have you seen from your perspective?
David McCleave:
Well, a couple thoughts that come to my mind, Jamie, is one, the suppliers need to do a better job, and we’re really starting to step up. And that is the training and education for the people that are there. Nobody’s a master of all things, but you got to be smart about many. So you see a lot of online sales academies and service academies for many of the suppliers. I think that’s key to making sure that the people inside those stores are productive. Okay. I think the other thing though is because of labor being a shortage is how do we get the customer to engage and do more things that would normally happen inside the counter? Let’s just take an ordering process for a minute. The customer’s calling, they have to talk to somebody, and order’s got to be input. So we’ve had fleet managed inventory, had distributor managed inventory, but I think the pandemic and technology now is in a position to really enable it and exacerbate that to where now all of a sudden that fleet says, I don’t need to talk to somebody now, and this system’s going to take care of the inventory that I need. The order’s automatically going through. And now that takes a little bit of that burden off the distributor, and all of a sudden the people that they’re having a shortage with maybe isn’t a crisis it, it’s still important, but maybe not a crisis.
Jamie Irvine:
Yeah. Okay. So I’m glad that you said that it takes the burden off of the distributor because I think when a distributor hears kind of the premise of what you just laid out, they say, well, where do I play a role? How do I add value then in that supply chain from manufacturer to the end user? So what is your perspective on that?
David McCleave:
Oh, my perspective is they play an important and crucial role in that. I mean, that’s where the relationship is. Even with technology allowing the parts to flow seamlessly, that relationship is, it couldn’t have been proven more with that through this pandemic, how important those relationships were. When you have to sit there and tell people that you can’t get a part and you can’t find it anywhere, but yet you’re going to go search every corner. And let’s face it, I know in our segment of the industry, we had people going to boneyards, for instance, getting parts for their customer. It’s because of that relationship that when the product did come back through and is available that kept them with them regardless of the technology that’s being used.
Jamie Irvine:
Okay. And I think though, what could potentially happen though is if you have a distributor who doesn’t keep up with technology, especially on making it seamless for the customer to buy, they could then get left behind. Because if you have a choice between someone that I have to stay on hold for 30 minutes to get through to a counter, yes, versus just being able to put through the order and have it delivered within a couple hours, no matter how strong the relationship is over time you’re going to, the fleets have labor shortages too. Absolutely. So they’re going to keep hitting the easy button. So I think it is incumbent on the distributors to take the appropriate investments and keep up with the trends of technology and making it more productive for their customers. That’s the winning combination where we keep the best parts of the traditional distribution model together, but we also add tech technology in there to help everybody get the job done.
David McCleave:
Jamie, you said it really well. The only thing I would add is one, you absolutely have to evolve. We all have to. We’ve all have evolved. Take yourself out of this business, look at your home life and how much you’ve evolved. I guess what I’d want to add to that particular thing is that that’s why events like this are so important, because if you’re at home in a vacuum taking care of your own business, you’re not seeing the entire outside world and what could really, really come into play to help you out this event, these events can do that for you.
Jamie Irvine:
Yeah, a hundred percent. And please one of my favorite sayings about this is that some people have convinced themselves that what they don’t do doesn’t work. That’s a dangerous premise. Yeah, I agree. You can get into trouble really quickly. Absolutely. Let’s talk about evolving equipment and the technology that comes with that. So everything’s going smart. A lot of things are being electrified. What are the trends right now with trucks and trailers with these types of products? We need 10 hours to talk about that, but pick one or two from Hendrickson’s perspective.
David McCleave:
Yeah, it is absolutely smart. Tractors and trucks, they’ve been out there and they’re getting smarter and smarter. And the trailers now are they, hey, there’s a need for the trailers to be smart. We always had locators on them, but the GPS locators. But things that, making sure that the door is closed, making sure the refrigeration is at the right temperature, having to be able to see what’s going on inside the trailer at the same time. But I think from our perspective, we’ve got a product called Watchman that is not only a tire inflation deflation system, but will also take a look at tpms, take a look at each tire and the position to tell you what the actual PSI is. And then there’s a number of other things that it’s set up to do in the way of watching wheel end health. Okay. So those are important because nobody wants a thermal event in the industry or wheel off situation. Okay. So it’s technology like that that can really help the fleets on the back end say, Hey, I understand what’s going on with this thing. Let’s get it in before there is an issue. In other words, it’s planned downtime and not unplanned downtime.
Jamie Irvine:
Right, right. I had an industry expert recently say, we’re all one wheel off away from being out of business. Right?
David McCleave:
Yes, that’s right. Yes, that is correct.
Jamie Irvine:
Yeah. So one of the things that I benefited from in my career on the parts side is oftentimes as I was learning, I would pick certain areas to kind of specialize in. And boy, that was really useful to me as I progressed through my parts career, because when economic ups and downs came, you don’t get rid of the person who has those specialties, but also has maybe a wide range of experience. So if you were talking to a technician today, what kinds of areas would you recommend that they focus on specializing in? Because things are really changing with technology, so diagnostics are becoming a big thing. But where would you recommend say, look, you’re a new technician, focus on this. This is going to really help you in your career.
David McCleave:
I would absolutely say you need start looking for people that have some computer and IT savvy at ’em. I mean, that’s where it’s really going. The electronics are huge. And look at your own personal car. It’s a computer on wheels and the truck and the tractors are becoming that as well. So I would say, do you need to have technicians that run the entire gamut, the foundations, absolutely. But where we’re going in the future with smart trucks and trailers, you really need to have somebody that can hone in on electronics.
Jamie Irvine:
For sure. Yeah. When it comes to the trailers, you’ve talked about how the trucks have been leading the way, but the trailers are quickly coming behind. You listed a couple of those examples. What other areas, and especially if you’re an independent like the HDA Truck Pride members, what kinds of areas can they focus on to try to provide a more complete solution to their customers?
David McCleave:
Well, there’s a couple things, and I want to say about the smart trailer and smart tractors is that some people start to think because of that, it’s going to drive the product back to the dealerships. And I can tell you in the discussions with the fleets that I’ve had or the fleets I’ve had discussions with, that’s, that’s not true. They are still going to choose who they want to have their parts supplier be or who have their service provider be. Okay. So the distributors still absolutely have a role. They just need to make sure that they’re working with their OE suppliers to understand the technology so that when the fleets do call, they understand it and they can service some of the components. But I think I did want to make sure I added that in on the whole smart side of things.
Jamie Irvine:
Yeah, that makes sense. And that’s an important thing because the independent side is at risk as more vertical integration occurs. On the dealer side, they also have access to a lot of resources, sometimes more so than the independent. So it is incumbent on the independent to be as, to continue to evolve and change their business practices so that they can keep up with this wave of technology, which is really just one wave after another.
David McCleave:
It really is. And that’s what we’re here for is, and that’s why we’re at this event as well. So I think it’s incumbent upon both parties to make sure we’re well educated across the board and let them know what’s coming down the road and make sure they’re prepared.
Jamie Irvine:
Yeah. Well, I really appreciate you taking some time. It’s been nice to see you again. And for those listening in, you’re listening to The Heavy Duty Parts Report. I’m your host, Jamie Irvine. We have been speaking with David McCleave, Aftermarket Director at Hendrickson. To learn more, go to hendrickson-intl.com. I’ve got the links in the show notes. David, thanks for coming on the show.
David McCleave:
Hey, thank you, Jamie. Appreciate it. Thanks for having me.
