In our previous article, we spelled out the functional levels that make up the work truck industry supply chain; OEMs, body manufacturers, distributors, and dealers. We also described what role these major stakeholders have in creating a work truck or van, and provided a broad overview of the process to upfit a vehicle.
As a result, it should have become clear to readers why the fragmentation in the industry makes it difficult to track final configurations, and why there is no consolidated knowledge of the final configurations of work trucks and vans. This means there is no way to tie what product choices were made by which customers, which means data is not available to guide decision-making at each stakeholder level.
So, how does this lack of data in the work truck industry affect the efficient delivering of your work trucks and vans and thus your business? Never the right truck at the right place at the right time.
DATA AND MARKETING
A quick little side tour here on data and marketing. No matter what industry you are in, as a successful business person you naturally, consistently do what marketers call “environmental scanning,” i.e., keeping a watch on everything over which you have no control. This means you are always watching five key factors:
- What is happening with the economy
- What is happening with regulations
- Are there any societal changes that might be affecting your business (demographics, culture, styles, etc.)
- How is technology likely to change your world
- What are your competitors doing
Having data on these five factors is key to supporting the decisions you make, and applying those decisions to the four basic things that you do have control over:
- What your product/service is
- How you price it
- How you get your product/service to the right customer/place
- How you make sure your customers know about your product/service (promotion)
BACK TO THE QUESTION
So, how does this lack of data in the work truck industry affect you and your business? Because the supply chain stakeholders do not have the data on what final configurations are being used by which vocations and in which markets, they end up having to do a lot of guessing. This guessing is what creates the problems that affect your business directly.
From a purely practical standpoint, it means that it takes a long time to get a work truck built, because the right truck/van and the right upfit are not likely to be in the right place, and certainly not at the right time. And, that is all happening in the dark, i.e., not even the individual stakeholders today know much about their product once it leaves their factory. Here are just a few mini views into two of their issues, which then in turn drive other problems:
The distributor of, say, a service body, will sell that upfitted vehicle to a dealer. If that vehicle was not ordered for a specific customer it will sit on the dealer’s lot until a customer (contractor, electrician, or other such vocation, typically) finds it and buys it. In the meantime, for that distributor to see what is still in stock at that dealer, they have to send someone in a car with a clipboard physically to the dealer’s lot to visually check off a list of what they still have in stock, just hoping that the inventory is still on the main lot, not moved to the annex two blocks away.
Yes, today that is the only way that a distributor knows what has been sold. Then they can kind of guess how fast it sold, and hopefully be ready to restock that dealer’s inventory, or not.
The dealers are understandably cautious about having a pre-built vehicle on their lot, since these vehicles are often very expensive and, as described above, the dealer has very little data on which businesses might be looking for which configurations at that time. Plus, not a lot of good commercial promotional tools exist for dealers to help customers find their inventory.
Those are just two examples of how the lack of data affects the stakeholders in the chain. Since this lack of data exists for all of the stakeholders, you can imagine the challenges that OEMs face in being able to correctly plan their production for demand. Maybe you have been caught by “guestimate” planning—faced with a need for a certain chassis configuration, and been told, “We just don’t have those chassis available right now.”
A large body manufacturer recently reported that they internally track 15,000 body configurations—many small custom modifications—though they felt it should certainly be under 1,500. This is evidence of an industry that has focused on customization, and not on best practices for specific end user cases.
Chassis and body manufacturers work hard to discover improvements that will help you be more productive and more efficient. At the end of the day, getting that information about those unique and valuable improvements and features to you is hard, and prevents you from making the best decision when investing in a new vehicle.
Is there an end in sight? As implied in the previous article, there are some unique ways that stakeholders are working to solve these problems with today’s digital technologies.
In the final installment of this series, we’ll look at some of those approaches. Look for the final installment in the March issue of MWS.
ABOUT THE AUTHOR:
Kathryn Schifferle, is the founder and CEO of Work Truck Solutions. Find out more about Work Truck Solutions and its services, visit www.worktrucksolutions.com.