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Why Domestic Manufacturing is More Important Than Ever Before

Learn why many companies are turning to domestic manufacturing, and why this is more important than ever before.

Episode 206: Pandemics, supply chain disruption, inflation, and geopolitical conflicts are dominating the headlines. For North Americans, why is domestic manufacturing more important than ever before? 

My guest today is Collin Shaw, the President & COO at the Heavy-Duty Manufacturing Association (HDMA). 

Collin Shaw is the President & COO at the Heavy-Duty Manufacturing Association (HDMA). In this episode, learn why many companies are turning to domestic manufacturing, and why this is more important than ever before.

Guest Website: HDMA.org

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Transcript of Episode:

Jamie Irvine:

You’re listening to The Heavy-Duty Parts Report. I’m your host, Jamie Irvine. And this is the show where you get expert advice about heavy-duty parts that keep trucks and trailers on the road longer while lowering cost-per-mile.

The pandemic has caused all kinds of problems. And we see a lot of things dominating the news, headlines, everything from the pandemic, the supply chain disruption that has occurred. There’s inflation, there’s geopolitical conflicts, and all of these subjects are dominating the headlines. For North Americans, why is domestic manufacturing more important than ever before? That’s the subject of today’s episode. My guest is a returning guest, Collin Shaw, but he’s with a new organization. Collin is now the President and COO at the Heavy-Duty Manufacturing Association, also known as HDMA. Collin, welcome back to The Heavy-Duty Parts Report. So glad to have you here.

Collin Shaw:

Great to be back Jamie. I have always enjoyed my experience talking with you, and I think, you know, the content you provide is always timely and very good for our industry. So I really appreciate you having me back in this new role. I couldn’t wait to be able to share some of the things that I’ve learned in the last little bit in this role and what I see in the trucking industry as a whole.

Jamie Irvine:

Right. So, I mean, at one point you worked for a manufacturer now you’re working for the HDMA, why is domestic manufacturing more important than ever before? It might seem like an obvious question, but I’d like your take on it.

Collin Shaw:

Yeah, what’s, what’s really been interesting. So I took on this role just a little over two months ago and in meeting with several CEOs, supply chain executives, purchasing and executives, as well as OEMs, what we’re seeing is that the manufacturing here in North America has become ever more vital in that changes to how business is done through the pandemic and what’s happening with shipping times and things like that have become difficult. The uncertainty in the global markets and what’s happening around the globe, it, the uncertainty of getting parts is become difficult. And so, for example, when, let’s say a company puts in an order for parts that they have to ship across the ocean, and maybe it takes 90 days to get here. What we’re finding is that a lot of the times, or sometimes, the OEMs will change what that is mid-order and because of the contracts that they have, the suppliers aren’t protected.

So they’re stuck with all of this inventory. That’s either on an ocean freighter somewhere or in transit, and they have to go back and then reorder parts again. And so what we’re seeing is that proximity and closeness to the OEM has become ever more important to just get the right materials at the right time. To the OEM, it didn’t used to be such a problem when there were not issues at ports and there wasn’t, you know, global complications in the supply chain, but it’s become ever more important to just be close to your OEM or where you need to ship it. So you can react very quickly to what they need, because they may change up their orders. And you know, I would say the terms and conditions and contracts, a lot of companies have probably haven’t kept up with where we’re at today in the global environment. So the OEMs may only have to give a very short amount of time and notice that doesn’t reflect where the parts are in the entire supply chain. So it becomes very difficult for manufacturers to react if everything is coming from across the globe and they have to wait on shipping containers and things like that.

Jamie Irvine:

Right. And certainly, I think for many years, most of us were almost spoiled. We had this feeling that the global supply chain was certainly more robust and more secure than it actually was. And I think that’s what this pandemic has shone a big light on. Now, let me ask you something. I always like to take these larger issues, kind of macro issues, bring them down to the individuals who work in the industry and by extension society, because I say all the time, the trucking industry is the backbone of society. So what happens in the trucking industry affects everyone. What’s at stake for both the trucking industry, as well as the individuals who rely on it?

Collin Shaw:

Well, I think the biggest thing at stake is just not getting what we need on a regular basis as a society. As I’m a trucking organization. And I came from that supplier world, it’s very hard to be able to not deliver parts to trucks that are off the road. And that’s a very serious condition that all of the supplier community takes very seriously the truck down issue. And when there are issues in the supply chain and you can’t get the parts that you need, that disrupts things very quickly in our society and with the goods that we try to ship and send and receive. And so at a very micro level, we can all be very quickly affected by that. And we’re seeing the effects of that today as companies and suppliers struggle to deliver the aftermarket parts as trucking companies are having to keep trucks longer.

So they’re having to do more maintenance. They’re having to do more service. It’s putting a bigger burden on the aftermarket and with some of the disruptions in the global supply chain at a very micro level, we’re seeing the effects of that. If you go to the grocery store, you know, I was looking for Legos for my kids and, you know, if you go to Target or something, you’ll see that there’s less on the, on the shelves. And I think that’s a direct result of what we see of just the capacity, not quite being there in some instances because of those kind of things.

Jamie Irvine:

Well, and there’s the inflation issue as well. I don’t think a lot of people necessarily see the direct correlation between for example, open driver positions or trucks that are down and unable to operate on how that directly affects prices. But as long as demand outpaces, the supply prices will continue to go up. So we’ve got to get our part of this under control, where there’s enough people driving, there’s enough trucks on the road and where now that demand can fall below supply, that’s gonna push prices back down again. So that’s one direct way where it impacts people, like everyday people.

Collin Shaw:

And I think a lot of times people just blame it on gas right now, gas is the easy culprit and granted, you know, diesel prices have gone up quite a bit. We’ve seen that they’re coming down a few cents now, but that’s an easy scapegoat. And what we’ve seen is that it’s not just fuel, but it’s driver costs. It’s the operations of the fleets. It’s you know, if a driver’s gotta stay somewhere, there’s extra costs included there. So this inflationary aspect, you see it in the overall spot rate and the fuel piece of that spot rate is just a piece of it. And so that inflation is affected by all of these things. As drivers can command better wages, as there’s a more premium on getting parts when people need them quicker, it just has a whole trickle down effect that is easy to blame just on one area, but is part of a bigger whole that maybe not everybody’s seeing out there.

Jamie Irvine:

So you’ve had a chance to work in this position for a couple months now, like you said, you’ve had a lot of conversations with manufacturers. What’s your sense on how manufacturers based in North America are gonna respond to these global macro forces? What’s gonna change in manufacturing over the next few years?

Collin Shaw:

I think a couple of the things that I see with the opportunity to bring some manufacturing back to North America. As companies are looking at that, one of the things that I think is gonna be a benefit to this is gonna be the digitalization of manufacturing. As companies are looking to invest in North America, as they’re looking to build, perhaps in new operations, it gives manufacturers a chance to start over. So the ability to drive technology and digitalization and automation into the manufacturing process really helps to improve the operations. And that’s not at the loss of, I think jobs it’s making things much more efficient. There will be people still needed on the lines, but the ability to visually inspect part quality via a camera, or provide augmented reality instructions to an operator to assemble things is vital.

And in the trucking industry where a lot of the products are very specialized, you know, even a class 8 truck can be very specialized with very different suppliers putting different parts on, and you can have different braking systems and different safety systems. Those kinds of things are very valuable in the manufacturing operation that I think is gonna be a big benefit to people bringing manufacturing back here over the next few years. The other piece of it is hopefully more stability into the supply chain, as there’s more control locally, as people are setting up shop closer to the end operations, it provides more stability, little bit more visibility, more control and the ability to work with the OEMs a little bit easier on manufacturing.

Jamie Irvine:

Yeah, I work with a lot of manufacturers as a consultant and I recently did a meeting with one. Now, now, if this doesn’t kind of, as an anecdote show you the big shift that’s happening, nothing else will. An Indian manufacturing company from India is moving to the US to set up a manufacturing facility in Texas. That’s like never happened before in my knowledge, it’s always been the other direction where people were moving manufacturing overseas. So the very fact that that people are recognizing, look, this is gonna change. And if we want to be in the North American market, I think we need to be in North America. I think that has a big effect on everyday people that are relying on the trucking industry. And I think it’s a good thing for all of us.

Collin Shaw:

I do too. And our industry has always been one that has to be very fluid because of the nature of the products. You know, the type of freight that’s hauled can be very different between, you know, if you’re a truckload or if you’re a flatbed or if you are hauling chemicals, the nature of that requires the products to be a bit more specialized. And my original career started out in Jeep. And so, you know, Jeeps are always very customizable but when you look at the commercial vehicle industry, that that flexibility, uh, reminds me of that. And the ability to customize a product is really important and that’s being close to the OEM it helps you just be a little bit more flexible, helps you to react to those kind of things. If they need something special, being halfway across the world, maybe easy to update software, but to get a part, you know, those things can take time as we’re learning.

Jamie Irvine:

We’re gonna take a quick break. We’ll be right back. Don’t have a heavy-duty part number and need to look up a part? Go to parts.diesellaptops.com or download the app on Apple or Android to create your free account. Looking for high-quality fuel injection for heavy-duty applications? Having one supplier for fuel injection allows you to better serve customers by providing them with a complete line, which increases your sales and profitability. Learn more at ambacinternational.com/aftermarket. We’re back from our break. Before the break, we were talking about the situation in manufacturing, how it impacts the trucking industry, how it’s going to impact you as an individual. Now I’d like to shift our conversation to learn a little bit more about the Heavy-Duty Manufacturing Association. Colin, how is HDMA structured and why did it come into existence in the first place?

Collin Shaw:

Yeah, so this was a world I really didn’t know much about. I came from the supplier world. I worked Z Wabco that was later acquired by ZF. And so association work. It’s still something I’m learning, but HDMA, is a division under MEMA. HDMA has been around for about 25 years as a division, but MEMA has been around for almost 114 years and MEMA represents the entire motor equipment manufacturers. So we have a division for the Original Equipment Suppliers Association, which is for light duty suppliers to OEMs. We have AASA, which is the Association for Aftermarket and Automotive Aftermarket Suppliers Association.

Jamie Irvine:

It’s only been two months on the job, you’re forgiven. And I challenge anyone to try to say that like five times fast.

Collin Shaw:

And they’re the counterpart to OESA that supplies the light duty aftermarket. You have MIRA, which is the Association for Sustainable Manufacturing, and they focus a lot on remanufacturing. And then the group that I’m responsible for HDMA, which is the Heavy-Duty Manufacturers Association, we all work under the same vision to advance the business interests of our member companies. And so I work alongside those divisions to help create content, advocacy, networking opportunities to help our members push their business interest forward in the industry with OEMs, with government customers and things like that. How it’s structured, so I have a team that works for me in HDMA we have a research group, we have a marketing team, we have a sales team and we have a programming team and we all work together to attract new members, work together to build programming and content, you know, around things like councils and HDAW and HDAB, which people are more familiar with. And then our research side we do primary research, we do surveys and things like that. And all those just go to provide value to our members.

Jamie Irvine:

So you mentioned advocacy, I’m just myself being exposed to advocacy for the first time, especially around right to repair. So we, we did an interview a few months ago with the Autocare Association and, and with Mark Karen from Total Truck Parts, and we were talking about the important role they’re playing in Washington to try to move right to repair legislation forward, to protect all of us. So what kind of advocacy work are you doing and how does that like trickle down and impact people who work in the trucking industry in a positive way?

Collin Shaw:

Yeah, so in addition to things like right to repair a number of the things that we’re working on are things like what’s happening at the ports. So we just held our advocacy month, Ann Wilson, who’s the lead for MEMAs Washington DC office. She got representatives from the White House to address our members to talk about what’s happening at the ports, upcoming union negotiations, some of the success they’ve seen and then gave our members an opportunity to ask questions of representatives from the White House. We also provide feedback to NHTSA on things like safety regulations, braking regulations, upcoming CO2, and NOx regulations. So what we’ll do is we’ll take feedback from our members. We will put that all together and be able to form opinions and give feedback to NHTSA or the DOT on those kind of things.

So we do that under the framework of our government affairs council which we have member companies sit on that as well as various subcommittees for environmental issues, safety, things like autonomous driving, and we’re able to provide feedback and as well as help members with specific issues, you know, if a member has a specific need, we have the contacts that maybe some of our members don’t have at these organizations to where we set up one-on-one meetings. Talk about these very specific issues that they may be seeing with the specific regulation.

Jamie Irvine:

Well, that’s awesome. So a lot of our listeners, they’re fleet maintenance managers, repair technicians, parts, people, how should those kinds of people in those roles, uh, leverage their relationships with manufacturers to be more successful? You know, one of the things I always found as a sales account manager is always was surprised when a distributor rep didn’t want to bring a manufacturer’s rep into the field. I never understood that mentality because my whole sales career basically could be, you know, built on that one thing where I brought manufacturer reps out and we work collaboratively together to help the fleets. So just from your perspective, if you’re in a fleet or you’re in a distribution company or you work at a repair shop, how can you leverage relationships with manufacturers to help you be more effective in your job?

Collin Shaw:

Yeah. You know, coming from that world, I think there’s always maybe a hesitancy to think that, Hey, maybe, maybe we’re too small. Maybe these guys don’t wanna help us. But you know, literally every, all of our companies, to one degree or another set up operations and set up things and processes to help every single company and they wanna help, they wanna provide the answers. That’s what they’re there for. That’s why they have call centers and things like that. And so it’s important to understand that our member companies are there to listen. They’re there to help. They want to make sure that everybody’s getting the right parts. And I think, you know, the fleet guys, they, what I found in being in a role at a supplier is oftentimes the fleet guys knew our products better than we did.

They’re in it every day, they know it from maybe not the technical specs of, okay, this is what this software is supposed to do, but they know how that product functions, they know some of the weak points and they can give really good feedback. And so it’s a give and take relationship to where the manufacturers can help really identify diagnose problems. But a lot of the times what’s beneficial is that the manufacturers get really good feedback because these guys really know the products, they know them in the real world and they can provide that feedback that all of these, all of our member companies strive to get. And so that relationship is really valuable. And I think that oftentimes fleet maintenance managers or people may forget that the suppliers are there to listen. They wanna fix any issues. They want to understand what’s happening. And so never forget that if you’re a fleet maintenance manager, that the advice you can give back and the feedback you can give is invaluable. And so they want to hear from you, they want to have that connection and they wanna make sure that they can solve their, solve your issues and also work with you to present further issues.

Jamie Irvine:

Yeah. That you know, what that resonates with me so much. It was exactly what I found, you know, working with manufacturers in the field and I worked for a manufacturer at one point in my career as well. And you’re absolutely right. Like getting that feedback from the real world is so valuable. So, you know, if you’re in that position, don’t think that you’re just taking, because you’ve got something to give. And so it is a real two-way street. Let me ask you one final question. How can we all support the Heavy-Duty Manufacturing Association? Like what can regular people working in the industry do to give you guys support? Because obviously with the advocacy and research and safety, you’re doing a lot of good work that all trickles down and benefits us. So what could we do to help you?

Collin Shaw:

Yeah. So there’s a number of ways. So, you know, first and foremost, we’re an association for the supplier community, but what we do is a lot of outreach when we put together our council. So let’s say you’re not a supplier, but you want to be involved somehow. We have various councils that we’re always looking for people to provide content. So we’ll bring in fleets, we’ll bring in research specialists, and our member companies really like the highest rated stuff that we do is typically when we bring in like representative from a fleet or an OE because they just bring this amazing perspective to what’s happening. And so if you’re listening and you’re not a supplier, there’s so many other ways to provide content and feedback. We have monthly webinars where we give an update on the status of the industry.

But those are the kind of things where if we have a specific thing, maybe we wanna do a panel with some fleet maintenance managers just to talk about what’s happening in the world. Those are the kind of things that we’re always looking to do and always looking to help update our members on. So we operate councils for leadership, sales, executives, technology, executives, marketing executives. And so all of these kind of things, we’re always looking for people to provide feedback. In addition when it comes to things like HDAW, which is the Heavy-Duty Aftermarket Week, that’s a great way to come and network with the supplier community, through the one-on-one meetings that we help to facilitate. That is a fantastic way. We’re right in the middle of the planning season for 2023 and so keep an eye out for those kind of things, because that’s a great way to come and network and build those relationships that you may not have the opportunity to, especially if you’re a smaller distributor, you can really come and meet with some of the OEM reps that you may not be able to get to on a regular basis.

Jamie Irvine:

That’s fantastic. I can’t wait to HDAW ’23. I missed ’22 because of COVID restrictions. I got exposed to it a few days before scheduled to fly out. So that was a heartbreaker. So you and I have some things to talk about for 2023.

Collin Shaw:

Absolutely looking forward to it.

Jamie Irvine:

You’ve been listening to The Heavy-Duty Parts Report. I’m your host, Jamie Irvine. And we’ve been speaking with Collin Shaw, the President and COO of the Heavy-Duty Manufacturing Association, also known as HDMA. To learn more about HDMA, visit hdma.org, links will be in the show notes. Collin, thank you so much for coming back on The Heavy-Duty Parts Report. It was very, very great to talk to you again.

Collin Shaw:

Jamie, as always thank you very much.

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