These Parts Aren’t Supposed to Fail
Learn how Dorman Products is solving the CPC module failure issue in the trucking industry.
Episode 236: We’ve been hearing over the last year repeatedly about the supply chain issues plaguing the trucking industry. In this episode though, we are going to focus on one of these pain points for fleets, the premature failing of CPC modules, the shortage of replacement modules, and the solution Dorman Products has for this issue.
My guest today is Daniel Simon, a Category Manager at Dorman Products.
Guest Website: DormanHDSolutions.com
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Transcript of Episode:
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 keeps trucks and trailers on the road longer while lowering cost per mile.
You’ve heard over the last few months, almost every guest that’s been on the show has talked about supply chain issues. It’s one thing to say it broadly, there are supply chain issues and we’re feeling the pain, but where specifically is it impacting fleets? There’s many different examples, but today we’re gonna focus in on one and I’m very happy to bring back a returning guest.
So Daniel Simon is the Category Manager at Dorman Products. They also own Dayton Parts, and he’s here to talk to us about the overarching trend and then give us a specific example of how it is impacting fleets and what they as a company are doing about it to solve the problem. Daniel, welcome back to The Heavy-Duty Parts Report. So glad to have you here,
Jamie. Thanks so much for having me. Always a pleasure.
So as we were talking about this situation, you know, I picked out this one quote, “these parts aren’t supposed to fail.” So not only do we have supply chain issues where we’re not able to get parts, but now we have another issue where parts that really weren’t supposed to fail are, and it’s causing a lot of problems for fleets. So let’s just back up the conversation a little bit and talk about the overarching trend. When we talk about supply chain issues, what is the trend that you’re seeing right now?
Yeah, well, we’re seeing a trend, you know, across the board, right? Whether it’s raw materials, you know, chips, a number of different sub-components, making it really difficult to stay in stock, particularly on the after sale support standpoint for the OEs to stay in stock on some critical components that if, you know, aren’t functioning shut the truck down. And that trend, while, you know, some portions of supply chain have started to ease a little bit through, you know, through the end of Covid here.
You know, what we’re seeing is a continued pressure on after sale service. You know, for parts availability. As you know, you continue to prioritize components and sub-components for new truck builds. That’s gonna continue to put pressure on, you know, some of these critical components, like you said, some of which aren’t really supposed to fail or expected to fail, where there’s not a robust supply chain and ultimately putting trucks down.
Right, and, you know, when I talk to clients that I work with, so I work as a consultant and we do a lot of work on digital sales channel adoption, marketing, that kind of thing. One of the things that my clients as manufacturers have said to me is they’re nervous about launching some of their marketing campaigns simply because they’re worried they’re not gonna have the parts.
One thing when you really dig into the details about that is that the new truck manufacturing is gobbling up all of the parts. And so what you’re saying to me is that where we’re really starting to see the pain is on that after sale support in let’s say second owner, or even if the vehicle’s just a little bit older and it’s the first owner?
Yeah, it’s spot on Jamie, right? So there’s continued demand for new trucks, right? New truck builds have been slightly constrained through the pandemic. There’s still a high demand for new truck builds and most of those production agreements are gonna funnel parts primarily to new truck build. And when that’s constrained, particularly, you know, where it’s most acute and anything that requires any kind of, you know, microchip or processor, that’s gonna really make it difficult to maintain parts availability across the after sales, you know, service network.
Yeah, you hit the nail in the head there for sure. When you look at the behavior of some fleets, we know that there’s some fleets out there that keep their trucks like three years and then they change them, they’ve been forced to keep trucks longer. So does that contribute to the pent up demand for new vehicles now that production is starting to roll again?
Yeah, so, you know, look, I mean, freight is very cyclical, right? And truck buying habit of new vehicle, you know, new power unit buying habit is quite cyclical as well, and we’re still in a pretty strong market there from a new truck standpoint. But you’re correct. I mean, you had about a two year window through the peak of supply chain disruptions for the pandemic, where fleets, even if you normally would keep a truck for three to four years and turn that asset, they’re really forced to keep those vehicles longer.
And, you know, I believe, and this is just my opinion, but I believe a lot of those fleets now have started to reimagine what their makeup looks like, recognizing that, you know, maybe their spans on parts and service wasn’t as extreme as they were expecting, where they, they found that they could manage a slightly older fleet of vehicles and they’ll probably, you know, take that into the future.
But with that said, you know, that probably gets more into long range planning, that the demand for new truck builds right now is still certainly outstripping the, the supply components needed to build those new trucks,
Right, and so regardless of where you sit in that arc of where you’re buying equipment, you’re fixing more equipment today than you’ve ever had to in the past. So now we get into the individual parts, we get into the supply chain issues with getting replacement parts and now things start to get a little complicated. And this is where, and I know you’ve heard this too, but this is where we hear stories from the field where people are down six, eight weeks waiting for one component to get their truck back on the road.
Yeah, that’s a great point. I mean, it was, you know, and still is in some segments. So acute, I mean, I’ll use an example, there’s a specific after treatment part that’s been out of stock and, and it’s still used on new builds. You know, the challenge was so acute, the lead times were so high, the EPA actually allowed drivers or fleets to go back to the dealer to have the ECUs reprogrammed to actually exclude looking at those segments of the after treatment critical, right?
In terms of maintaining, um, the after treatment system functioning for pollution control. But if I can’t get those parts for a year, 18 months, everyone across the industry, including the EPA agreed, you know, that it was just too long of a time to keep that truck down and they’ve had to go through workarounds.
You know it’s bad with the EPA makes that move, right? Like, I mean, that is an extreme situation.
That’s right. Yeah. And it is because it was an extreme, You’re exactly right. It’s an extreme response, you know, for the government to say effectively we’re gonna allow you to, for a temporary time period here to reprogram the ECU to effectively not comply with regulations. That’s an extreme response. But the reality is, the issue was that extreme. I mean, this wasn’t an acute where a few people were, you know, six, eight weeks without parts.
You know, you had huge segments of the market that were easily, you know, 6, 9, 12 months out from maybe having a replacement part. And again, as long as there’s demand for new truck build that’s gonna continue to pull that segment of production, for new builds, instead of going to those after sale service where that truck’s down.
Okay, well we’re gonna take a quick break. When we get back from the break, we’re gonna talk a about a very specific part and a specific problem that has put hundreds if not thousands of trucks out of service. We’ll be right back.
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We’re back from the break and before the break we were talking about the trend in the industry and how the supply chain issues, you know, it’s very easy to broadly talk about that and say, yes, we have supply chain issues, but then you get into the specifics and you start to see how it’s directly impacting the trucking industry’s ability to do what it needs to do to take care of business. So Daniel, there’s a specific make and and model and we’re gonna use this as an example of what we’re talking about. Could you tell us first of all what is the product that we’re gonna use as the example and then we’ll get into the impact it’s had on the trucking industry?
Yeah, great. So what we’re talking about here is commonly referred to as a CPC module. It’s a central powertrain control module. It’s effectively the computer of all the vehicles computers. It’s a relatively small box computer that’s installed into the dash and for a number of reasons, including a higher failure rate than expected. And, you know, issues with sourcing micro components, it is really acutely out of stock from the dealer. And a critical component, I mean, it’s, most people are finding out they’ve got a problem with their CPC module cause they come in the morning and get a cold no start where their vehicle just won’t turn on.
Right, so here’s the thing. This is where that comment, these parts aren’t supposed to fail, came from a customer in frustration. So not only was it a part that you’re not expecting to fail, and you’ve got some data that says that some of these parts are failing within 50 miles of the truck being off the lot. Is that correct?
Yeah. So, and look, that’s, you know, most of these are failing after a pretty lengthy cycle. But yes, there are data points out there of even below 50 miles where, you know, these modules are failing because of, we believe the way they’re manufactured and some specific components the way they’re installed into this module.
Right, so, I mean, that’s not the norm, but it has happened and it happened more than once. You can just put yourself in the position of somebody who’s been waiting 12 months for a truck, they finally get the truck and they roll down the road. They don’t get back to their fleet’s yard and they’re broken down. I mean, you can imagine the frustration, but even in a situation where the vehicle has been in service for let’s say two or three years and then this thing fails, it’s not available from the dealer, it’s just, the part is not available. Is that correct?
That’s right. So, you know, and again, a lot of this gets into my opinion, right? Because we don’t know what the OE expectation is on failure rates. But, you know, with that continued pressure and demand on new production with limited, you know, chip manufacturing and, and difficulty in sourcing chips, it’s pretty clear that there wasn’t a robust supply chain for replacements. Not nearly beating the demand rate. And obviously, you know, from a manufacturing line standpoint, a lot of that manufacturing capacity is going to new builds because these modules aren’t going away.
You know, trucks are getting more and more complex, more and more components across cab body and the entire, you know, vehicle have, you know, additional electronics and modules embedded into them. And so this idea of, you know, central or sub-assembly modules controlling large segments of the vehicle really is not going anywhere. And those modules are produced for the most part relatively high speed and a high production environment that’s causing some challenges.
And, you know, when these modules fail, it’s not like the days where, you know, you put a physical key in a vehicle and turn that key and everything, you know, physically starts up. I mean, these vehicles really are driven by computers today and we only see that complexity increasing into the future.
Now, okay, and I’m not an engineer and I haven’t seen the specs, but I’m gonna make an educated guess here. So I’m a co-host on a radio show called Mind Your Trucking Business on TNC Radio Live. And we did a whole segment on semiconductors and we did a deep dive on what happened with Intel and their next generation semiconductor just flat out failed. And so now they’re having to use older technology and the problem is that those older semiconductors don’t handle the capacity requirements of the newer technology.
And that can be everything from heat to vibration to just its ability to conduct larger amounts of electricity and data across whatever the module’s supposed to do. So it’s quite possible, we don’t know for sure, but it’s very possible that that played a part in in why these things are failing too, because we know that, you know, the largest semiconductor manufacturer in the world is really struggling to keep up and their next generation chip just flat out is not going to market.
So their CEO actually said that they don’t think this is gonna course correct until 2024 and when they announce that it created a 6% drop in market cap value of their company. So it’s even possible it could be a little longer than that. So when you look as someone who is trying to provide an aftermarket solution, how did you approach trying to create a solution for this specific problem?
Yeah, so we looked at this and we quickly found you, you’re sort of spot on there, Jamie with, with some of those comments, right? We found a issue in the manufacturing process. Interestingly, the chip itself is okay, there’s a couple different failures we see across the boards, but one of them is pretty consistent is a manufacturing step of how a specific chip is mounted onto the board. Now look, we’ve got the, the benefit of hindsight, right?
So we can see all the challenges that come with the way the products built. And again, we’re not trying to do volume for new truck builds so we can do our repairs really in a one off way, even though we’re doing pretty high volume here and even go so far as, you know, putting, putting chips through like, you know, x-ray scanning to do quality control.
But there’s a number of things at play here. You know, the chip itself, the way it’s produced as well as, you know, the way that the boards are protected from moisture can cause issues, if those coatings get into the wrong area. So there’s really a cascade of a number of problems. But what’s interesting is, you know, this module is up in the dash, it’s really away from high vibration.
It’s away from, you know, any kind of road debris for the most part it’s away from moisture. So it really was a part that was designed and put into a location to really be, you know, sort of behind the scenes and never worried about. But yes, it’s a combination of challenges in terms of going from, you know, hand soldering in the past to more automated methods. You know, the coding process is put on the chips themselves as well as even down to the solder selection as a lot of the industry moves towards lead free solder, which has its own set of challenges.
Right, and okay, I want to give people an understanding of the impact this has had on units down in the country. So you’ve got a little bit of data on that, but um, like how many units are we talking about where trucks are down because of this specific CPC issue?
Yeah, so maybe a little bit of qualitative information out there, number of news articles, you know, I can point you to and people, if you sort of just Google CPC four, you’ll see it out there. The issue was so acute that, you know, organized crime was going out there and actually stealing modules outta trucks on the dealer’s lots, create an entire spot market.
So a number of units down is actually because of theft. I mean that’s how, you know, valuable these things became. But from conversations we’ve had across the field and with some fleets, I mean, I know of at least a few thousand vehicles that are off the road today. And the primary tidal wave we’re seeing right now of vehicles are really in the older body style Freightliner Cascadias. And a lot of those vehicles have moved into mid-market fleets or you know, even down to owner operators.
So it’s really difficult outside of a few specific cases where we know where the number of trucks down really difficult to estimate the full impact as you get out into that owner operator network or the small fleet market.
But we know it’s thousands.
Yeah. Unbelievable. So, okay, so you guys have, have come up with a solution. Tell us a little bit about the solution and how someone would go about getting access to that solution.
Yeah, great, thanks. So our solution really is holistic. You know, we very quickly when we got this in our hands, realized there’s a few repeatable failures that we could take care of that we see really primarily causing that early failure, right? It’s the same failure that you see if a truck failed, you know, with the module under 50 miles, there’s a specific component, we’re able to remove that safely.
It takes us almost two days to actually remove that component. If you go to fast, you risk damage to the board and with no, you know, new products out there, if we damage a board and I can’t replace it, right? A normal reman program, you know, or, or an r and r program or repair program, if we were to damage it, I can always replace it with an OE product. In this case we can’t cause there’s no supply chain out there.
So we’ve gotta be really slow and diligent about getting some of those components off. From there, we clean up some additional coding that may be causing problems. We reinstall that component onto the board and from there we start a lengthy testing process to make sure that, you know, that component is reinstalled correctly, including x-rays so that we can actually see underneath the component and inspect every single one of the solder joints. From there, we then look at all the rest of the failures that you would normally expect to see on an end of life module.
So that’s the other thousands of components that sit on a board to see if anything else has failed any kind of fuses, resistors or any other kind of components across that board. We built our own end of line tester and test equipment to sort of put a module through all the expected environments and conditions that it’s gonna see and to simulate that.
And from there we shipped the repaired module back to the end user. It’s a really great process, right now because there’s no core out there and there’s no new inventory, it completely returns and repair. So, you know, an end user’s gonna go to a distribution partner of choice out across the heavy-duty aftermarket and they’re gonna, you know, be able to order that module directly from Dorman’s, wholly own subsidiary flight systems, set up an account there, order the module, they’ll get a call tag from us. Cause we need to control the exact unit to the exact vehicle, right? We’ve really wanted to deliver back the repaired module to the exact vehicle that it came off of.
Thankfully, each one of these modules are serialized. We’re able to maintain that serialization through our process. But from the time that a customer orders, at their distributor of choice, we’ll generate a call tag, ship that product back to us, put it through all the repair process, all the testing process, then usually most cases in under a week or in most if it needs to make extensive repairs up to about 10 days, we’ll ship that product back to the distributor choice to get into the end user’s hands and get reinstalled to the truck.
So what they’re facing today, a much quicker solution. And frankly, we believe we’ve actually eliminated the original failure. So if you buy a new module from the dealer, they’re selling you the exact same module that first went into the truck and it potentially, you know, I would say with high confidence it’s gonna have the exact same failure.
What we’re seeing here, we believe that, you know, if not a hundred percent, nearly 100% of these modules will fail. We have a repair solution out that’s designed to eliminate that original failure mode.
So if you have a CPC failure and you want to get that one not only repaired, but upgraded so that it won’t fail again, you want to go over and visit either dormanhdsolutions.com or daytonparts.com to learn more about where you can access their distributor network and get access to that great repair and return service.
Thank you, so much for being on the show, Daniel. I really appreciate you coming and talking about this timely issue and providing us with a solution. Really appreciate you coming back on the show.
Jamie. Thanks for having us. We look forward to supporting the industry and getting these trucks back on the road. We know it’s guy’s livelihoods out there.