What Are Fleets Asking for From Manufacturers?
Learn what fleets are asking from manufacturers in 2022, and how TMC is helping open that door of communication.
Episode 174: We were at the Technology and Maintenance Council Annual Meeting in beautiful Orlando, Florida. The theme of the show was Electrifying Performance in Maintenance Management. In this episode, we talk about what fleets need from manufacturers in 2022 and beyond, and why fleets can benefit by being part of TMC.
My guest today is John Adami from Northwest Heavy Duty.
John is a returning guest, you can learn about how the OEMs strategy is impacting the Aftermarket by listening to episode 85.
Guest Website: NWHeavyDuty.com
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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 show where you get expert advice about heavy-duty parts that keeps trucks and trailers on the road longer while lowering cost-per- mile. We’re at the Technology and Maintenance Council Annual Meeting in beautiful Orlando, Florida. The theme of the show is electrifying performance in maintenance management. My guest today is John Adami from Northwest Heavy Duty. John is a returning guest. You can learn about how the OEM strategy is impacting the aftermarket by going back and listening to Episode 85, we’ll have links in the show notes, John, returning guest, welcome to The Heavy-Duty Parts Report, but this time in person, so great to see you.
John Adami:
Oh, it’s fantastic to be here. Yeah, I’ve really been looking forward to this. This past couple of years actually has taught us some lessons and moved us forward in some ways. But overall, it’s something I’d like to forget about.
Jamie Irvine:
We definitely all are looking forward to better times ahead. So you work with manufacturers of commercial equipment and what I was interested in learning from you is what are fleets asking for from the manufacturers right now in 2022? You know, we’re at this event, it’s for the fleets, the manufacturers are here. What do the fleets need?
John Adami:
Well, I think it’s pretty clear, Jamie, that what the fleets need desperately is trucks and truck parts because both of those resources are in short supply, but that is just a situational topic. That is something that’s affected all of us because of the supply chain. And now of course, energy prices have gone through the roof. So they’re looking at ways they can mitigate the impact of that on their business. So there’s very near-term or short-term needs that they have. How do I keep the equipment that I have operational and how do I position myself to get new equipment? Because there’s a scarcity in both those areas, but there are some other longer term needs when you ask that very general question. Fleets need trucks that are even more efficient than they are today. They need those trucks to be as safe as possible, and they need their operation to be clean. You know, there’s this ongoing theme around zero emissions and it’s real and gonna be a more prominent conversation going forward.
Jamie Irvine:
Right? So when I think about a word that I keep hearing in all of our discussions here at TMC, I keep hearing the word utilization. Why is that so important and such a focus now for fleets right now, again in 2022, but why is that gonna be an ongoing concern moving forward?
John Adami:
It’s gonna be an ongoing concern because it’s always been a concern, right? These are businesses, they have this huge investment in assets and they’re successful because they get a good return on those assets. And it’s simple math. If the trucks aren’t rolling, they’re not generating returns. So what has shifted a little bit perhaps is, you know, the ways we are able to measure and predict utilization. There are people like Sandeep Carr that can speak much more eloquently than myself about where data is being generated and how it’s can be used effectively. So I believe I would suggest that utilization has always been important but as we try to get the greatest return on these assets, we need better tools and more of them to predict and manage vehicle downtime, vehicle uptime, depending on your perspective.
Jamie Irvine:
When I think about talking to fleets, one thing that they learned, this wasn’t in the notes, but as it comes to my mind, one thing that a lot of fleets learned about during the supply chain shortage is especially in 2021 now bleeding into 2022, they learned that losing visibility of their parts is actually a much bigger problem and is costing them way more than they thought. And one fleet put it to me this way. They said that the repair technician shortage actually kind of covered over how much losing visibility of parts was costing them. And now with all of the emphasis on supply chain, it kind of rose to the consciousness level of everyone who’s measuring this. And they’re saying my goodness, this is costing us. How do you think the people who manufacture parts and who are making them available are gonna be able to help fleets with that issue, making the parts more visible from the moment they order them to the moment that they get them?
John Adami:
Well, that’s a great question. I can tell you, I was involved last week in a site visit where one of the suppliers we partner with very closely, entertained a product marketing manager from one of the vehicle OEMs. And that product marketing manager was there to learn about the supplier. But at the same time, she was there to kind of give some visibility into their thoughts, of where the parts business is going. What are their important objectives for 2022? And that topic of whether it’s dealer managed inventory or other programs along those lines are, I can assure you, they’re top of mind for the vehicle OEMs and in the independent aftermarket, there has to be something complimentary, something similar, that’s doing the same thing. It is not easy to at a specific dealer location or a specific part shop to predict what the demand is going to be for a particular component.
But as you back out to the regional level or back out, even further to the national level, you have the benefit of data to see exactly what type of technology is in demand. It might be brake pads. It might be any number of filters or other components, but the higher level the view is the better, the picture of demand is. And at that level, you can force inventory into the local warehouses. And then in turn, those warehouses can make suggestions to the specific dealerships. The same model of course applies on the independent side. If you have a nationwide distribution network, you can look at the data in that way. And then again, now the local dealer has a choice, do I accept this recommendation or do I go with my gut? And I think going with your gut, it’s not going to be the ideal business model going forward, not when the data is that good. It’s a cultural shift to suggest that the computer back at corporate headquarters, knows my business better than I do, but I think a lot of dealers will employ that strategy and it’ll be successful for them.
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 and before the break, we were talking about some of the things that fleets need moving forward. John, I’d like to talk to you a little bit at TMCs Annual Meeting, the theme is electrifying performance in maintenance management. And that was the part that I wanted to kind of focus in on. So how is electrification gonna impact maintenance management in the future?
John Adami:
Electrification certainly brings a lot of challenges. Anybody could debate when that transition might happen. But I think you look at the vehicle complexity and you immediately realize that electrified vehicles just don’t have as many moving parts. That’s obvious. Another perhaps obvious point is that in an electrified vehicle, you lose some of the traditional entry points where the repair process starts, right? If you know you have to bring in a vehicle at 10, 15, 20, 25,000 miles for lubricants, and you take that out and you present someone with a vehicle that basically doesn’t need to be checked out for a hundred thousand miles. You’ve lost those incremental opportunities for someone to look the vehicle over and make suggestions, examine this, fix that, et cetera. So there can be a doom and gloom attitude towards the maintenance and the servicing of electrified vehicles. I would like to suggest there are other offsetting opportunities that are presented.
First of all, there’s some key parts of the vehicle that will have to be maintained appropriately. You still have an air brake system, depending on the size of the vehicle, of course, air system, HVAC system, the cab seating, et cetera, which will require maintenance. But some of those newer companies that coming into that space, they might be coming in without a strong dealer network or a robust parts distribution process. I think there’s a lot of opportunities for support companies to come alongside of that and provide those maybe as a third party provider. It’s a little bit early to, you know, for the crystal ball to be all that accurate. It’s gonna be change and change is always difficult, but the opportunities are gonna be out there. These vehicles are going to break down and they’re not gonna fix themselves.
Jamie Irvine:
Well, John, that’s why I wanted to get it on camera, so I could look back on it and see how accurate these predictions are. John, I wanna shift gears a little bit. I have really enjoyed my membership as a TMC member, but I’ve only been a member now, not even the full year. And for those people who maybe are sitting on the fence as to becoming a member, or maybe they’re just learning about the Technology and Maintenance Council, why should people consider being a member, regardless of where in the trucking industry they currently work?
John Adami:
How much time do we have? Look I’m undoubtedly biased when it comes to that topic. I was aware myself of TMC probably in the very late 1980s, came to my first event down in Florida in ’89 and again in 90. And to be honest, I thought it was another truck show. I thought it was a replica of the mid-America truck show in Louisville or something like it. And it wasn’t until I switched employers the following year that they said, oh, no, no, no, you’ve missed the whole point. And I came to the meeting in 1992, as the company had bought into TMC and was a full member of TMC. And they registered for the entire event, not just the trade show. And it was like, you know, the curtain was pulled back in the Wizard of Oz. You’re like, oh my goodness, this is entirely something different.
And it was different to the point of being overwhelming. It was confusing how many things were going on. I had the fortunate experience to be mentored by some really good people from the start, people that, you know, either within my own employer or other people that I met early in the process. And they, first of all, let me answer at a very high level. TMC is uniquely positioned to bring together key constituent parts of our industry. It started with the fleets and it started over 65 years ago when they realized that there were some issues that they had to tackle together, they had to collaborate in order to get the type of equipment that they wanted. So fleets are at the heart of the TMC value proposition. If you’re a fleet maintenance manager or executive, you can come here, you can network with other peers who will gladly share of their knowledge, right?
Huge advantage right there. And then you have direct access to this coalition of suppliers that might be vehicle suppliers, equipment suppliers, the majority are component and system suppliers. And those companies, if they’re member companies of TMC, they’re sending engineers, they’re sending high-level service managers, trainers, because they, they want to present themselves in the best possible way to the fleet community and they’re not saying ‘buy our product’. That is not what happens at TMC. What they’re saying is what do you need? And how can I more effectively partner with you, train you, answer your questions. So you have these constituent communities that all come together. They do it twice a year. In the spring there’s also a trade show, in the fall there’s also a technician competition, but the ongoing emphasis, as you know, because even in one short year, you’ve kind of opened the hood and peaked under the engine.
You get it, you understand how things work. There’s all this collaboration that takes place. We have the collaboration taking place, generally speaking in two big categories, one the art of maintenance and the other is the art of vehicle design. So in one case, the suppliers are pushing information back to the fleets and saying, you have our after treatment system, you have our seats, you have our trailer floors. Here’s how repair them, to maintain them to, to predict, you know, what might happen to them over time. And this information most, you know, some of it’s at the technician level, a lot of it is at the managerial level. It’s helping maintenance managers understand their vehicles better, how to dialogue with the supplier of the vehicle, how to get the most out of the equipment that’s already in their shops. That’s one conversation.
Then there’s this other conversation that happens where the fleets are presenting their wish list. Those are the engineering RPS instead of the maintenance RPS, RP is a recommended practice. And these engineering RPS are a conversation about when you give us a cooling system for a bunk, we expect it to perform in this way, right? We don’t want to wait forever for the temperature to drop 10 degrees from 90 ambient down to 80, or from 90 to 70. This is our expectation, so that the fleets have a platform to say, this is the vehicle that we want. Let me emphasize another part of what TMC does that is very personally engaging for me. And that’s this conversation around the truck of the future. Part of our resources here are engaged in describing the future truck, the truck that is on the road 10 years from now, it’s a chance to look beyond today’s technology and say, how much better could these vehicles be?
They could be easier to maintain, they could be more efficient. They could be safer. It’s so many ways you can have that conversation. And what TMC does is to make this whole thing digestible and manageable, they break it up into categories. So you’ve got a group working on electrical. You’ve got another work group working on tires and wheels. Another group works on the engine. The other one works on cabs and controls. And so on. You have a segment for light duty vehicles. You have a subject of corrosion has a whole different track all by itself. So you come to TMC and you learn a lot. And over the course of three days, there will be several tech set. These tech sessions will focus on a specific topic and these events are planned a full year in advance.
So you look at where the industry is going, what the hot topics are, and maybe you have an emissions regulation that’s coming up. So you get a panel together to talk about that emissions regulation. And you might have someone from the EPA, you’ve got a vehicle manufacturer there. You’ve got an after treatment company there, and you’ve got a fleet there. And the regulator will tell you here’s, what’s coming and here’s why it’s coming, which is quite valuable. Sometimes we feel like we’re left in the dark and unaware and uninvolved. And then you have the vehicle OEM speaking in general terms, because they’re not just talking about their product. They’re talking about the industry. Here’s how we’re gonna meet this after treatment challenge. So in 2024, we’re gonna have another big emissions and fuel efficiency change. And there’s gonna be a lot of different technology on these vehicles, whether it’s aerodynamic treatment or maybe six by two powertrain designs, this is a form where fleet maintenance managers could get ahead of it and understand and be educated. And then there will be somebody on that panel from the fleet, and they’ll be speaking truth to power. And they will be saying, I don’t want these skirts that just, you look good and then get trashed every time I go on an on ramp.
Jamie Irvine:
So John, as I listen to you talk about all of that. I didn’t want to interrupt because you’re so wealth of knowledge and you’re so passionate about it and you covered, you covered it very well. I don’t want listeners though, to think, whoa, that’s like way over my head. What’s beautiful about it is that it doesn’t matter what level you’re at. It’s not a company membership, it’s an individual membership. So you could be a truck driver. You could be a repair technician. You could be working at the fleets, a parts distribution company, a manufacturer, there’s a place for every single person in this. Your voice is important. We want to hear from you. We want you to participate in this. And so that’s something I wanted to emphasize just on a personal note though, these shows, I mean, COVID aside now that we’re back, it is fantastic, but what what’s kind of like a personal highlight when you come to one of these shows?
John Adami:
Without a doubt, Jamie, it’s the personal interaction. All right. And I might get a little philosophical or I might get emotional. I don’t know. You might get both. I have been part of this industry now since the fall of 83. And I am so, you know, to have found a career that applies in several different dimensions. One of the most important things is that being in the transportation industry means we serve a vital role in the health of and wellbeing of all citizens in our respective countries. Our way of life is directly impacted by the flow of goods, into our homes and to our communities. And you really notice it when it’s not happening. So I’m proud of the overall mission that we fulfill. But the other thing that has been such a gift to me is that it’s a small enough community that you form real relationships in.
And I could give you any number of examples. One that caught me, there’s been a couple that caught me this week, but one in particular was Monday morning. I serve on the mentor committee here and I get the privilege of welcoming people that are coming here for the first time. We might have several hundred people here for first time and I’ll only meet a handful of them. We try to, but we pursue those people. We try to engage with them. And five years ago, I remember meeting Sasha for the first time and being captivated by his enthusiasm and energy. And it was a privilege to welcome him into the industry and then over subsequent meetings to check up on him and or him check up on me. And when he came out to Seattle to have conversations with customers, he made a point of calling me up and saying, let’s go to dinner, right?
But on Monday of this week, you know, my heart was in my throat a little bit. He was in one of the task force meetings. I walked up to him. I said, how are you doing? Because Sasha came here from the Ukraine and he has family that was left behind there. And for us for a few minutes to talk to each other about what’s going on outside of the work arena, I gotta tell you that makes a difference. TMC is not a church or a country club or something like that, where relationships drive the mission. On the other hand, relationships absolutely do elevate the conversation and they accelerate what we do. If you have the opportunity to sit down with people over time, you develop trust, you open up communication. And that absolutely has a return when it comes to the business that you and I do.
Jamie Irvine:
You’ve been listening to The Heavy-Duty Parts Report. I’m your host, Jamie Irvine. And it’s been nice to have John back on the show. If you wanna learn more about Northwest Heavy Duty, go to NWheavyduty.com links are in the show notes. John, thanks for being on The Heavy-Duty Parts Report and for coming here and doing a live one here at TMC.
John Adami:
You know, I will do this anytime that you invite me, Jamie, it’s a privilege. Thank you.
