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Navistar unveils Vision to transform dealer, parts business

Posted: August 7, 2019 by John G. Smith

Navistar PDC

Navistar is exploring ways to deliver parts quicker than ever, and that involves better predicting what customers will require.

BOULDER, Colo – Navistar International has a vision for the future of its dealer and aftermarket experience — and it’s taking shape in what’s known internally as the Vision 2025 strategy.

A recent agreement with Love’s Travel Stops, a new parts distribution center, and an increasing focus on telematics data are just a few examples of the changes being made. The manufacturer is looking to establish a common experience from one dealership to the next, better predict when and where parts will be needed, and slash the time trucks spend in service bays.

“While many future actions are still in the works, the foundation of Vision 2025 is already in place, and is starting to provide significant benefits to our customers, who are at the center of this strategic direction,” says Friedrich Baumann, president – aftersales and alliance management.

Navistar completed a new partnership with Love’s Travels Stops on Aug. 1, authorizing most Love’s and Speedco service locations to perform standard, extended, and used warranty work on all International Class 6-8 trucks, with service repair times of three hours or less. Loves has more than 1,000 locations across North America, making this the commercial transportation industry’s largest service network, Navistar says.

The OEM is also opening a new 300,000-sq-ft Memphis parts distribution center (PDC) in Olive Branch, Miss., on Aug. 26. It will serve the region’s dealers with stock and emergency orders. But proximity to the nearby FedEx World Hub in Memphis will also enable next-day parts deliveries to more than 95% of dealer service locations, while also extending order cut-off times to 11 p.m. (EST).

“Not every parts service emergency is going to happen during an average 9 a.m. to 5 p.m. workday. Filling the time-sensitive gap of parts delivery is our main goal, and Memphis is the key to getting there,” said Josef Kory, senior vice-president – parts.

This will be Navistar’s says PDC in North America and the seventh in the U.S.

The work will hardly end there.

Navistar dealer

Navistar’s new Vision 2025 strategy is looking to transform the dealership experience.

Changing the dealership experience

Prestige standards are being developed to ensure a consistent experience from one dealership to the next, right down to the condition of the restrooms.

Navistar also plans to expand its private labeled Fleetrite and ReNEWed brands to include more products. Fleetrite itself already accounts for 96 different product lines. Later this year, a new system will be publicly launched to support customers who prefer to order their parts online, too.

But there will even be other channels for those who don’t necessarily return to dealers, including businesses that sell Fleetrite products without the stamp of a Navistar diamond on the door. Those locations will compete against businesses such as FleetPride, Kory says. And they’ll focus on multiple daily parts deliveries and shorter order-to delivery times.

Four of these location have already been launched. More are planned this year.

‘Significant change’ underway

Baumann says he saw a company going through “significant change” when he joined Navistar in April 2018, following a role as the head of the aftermarket business unit at Daimler Trucks North America. A focus on “survival mode” in the wake a failed emissions strategy was gradually shifting to a focus on business growth and innovation.

While many changes have been realized, Navistar executives are not shy about the challenges that remain. Baumann, for example, refers to the brand’s score of 7.7 out of 10 during an ATD survey released at the end of 2018. Some competitors have been scoring more than nine out of 10 in the customer rankings of their dealership experiences.

The unflinching approach has extended deep into the head office, even restructuring things like the traditional dealer council.

“We have to change it so that we’re working together,” says Mark Belisle, vice-president – distribution.

Justin Fink of the Summit Truck Group, headquartered in Texas, remembers what such meetings used to be like. There were no agendas delivered in advance. Sessions typically involved hours of powerpoint presentations, and were often bogged down in topics like prices rather than broader strategies.

The eight-member board guiding Vision 2025 initiatives — an equal number of dealers and corporate personnel — now come to their meetings with a focus on the measures that are meant to reach the broader goals. Each session ends with a clear action plan, and any related decisions have to be published within 48 hours.

Vision 2025

Discussions about Vision 2025 goals and strategies have involved huddles around this illustrations — a road map of sorts for the things to come.

Dealer and corporate personnel alike have recently been exploring an array of goals – and the steps needed to reach them – while huddled around something that could be described as a giant illustration, or maybe the playing surface of a board game. It’s used to lead discussions about targets such as improved uptime, various pillars to support the business, and challenges to come.

The drawing, discussion cards, and facilitators have anchored 39 Vision 2025 workshops that have reached more than 1,000 people. A virtual half-hour experience has reached 6,500 more, about 3,000 of whom are connected to dealerships.

Those involved in the strategy also acknowledge that the relationship between dealers and the manufacturer has struggled in the past, in part because of a top-down management style. Navistar executives typically outlined a particular strategy, and told dealers what had to be done.

“We had an issue, number one, on how to work better with one another,” says Terry Minor of Cumberland International Trucks based in Nashville.

Any real gains moving forward will rely on a commitment to being open – right down to the sharing of data.

Says Minor, “We’ve opened up the gates and we’re letting them in.”

Data the key for future aftermarket gains

Information such as telematics data is clearly a key to the broader gains Navistar wants to make. Some of them are already being realized. Minor, for example, refers to a project that involved replacing 547 clutches. He knew where his customer’s trucks were before the fleet itself did.

The more data is shared, the more predictive decisions can become, adds Kory. Data from sources like Navistar’s OnCommand Connection telematics systems is gradually being integrated into e-commerce systems and everything else that drives the aftermarket experience.

“We’re in the middle of this journey today,” he says. “Later this year we’re going to announce the launch of a tool that integrates fleets, dealers and Navistar together that provides real-time visibility.”

It’s not the only way that time has become a focus.

Since the first quarter of 2018, Navistar has improved the share of repairs completed within 24 hours by 73%, says Chintan Sopariwala, vice-president – uptime. “Gone are the days when fleet customers are talking about 48 hours and 72 hours of downtime.”

The goal is to complete 80% of repairs within 24 hours. Today the industry average is between 40% and 50%, he says.

Seven locations in Canada and the U.S. have also piloted a Dealer Inventory Alliance management system that reduced unplanned parts orders by double digits. Since March alone, the volume of emergency parts orders has dropped 40%, while the number of SKUs stocked at dealer parts counters has increased 21%, Sopariwala says.

In other words, the company is doing a better job at predicting the parts that need to be available at a dealership before a customer’s truck rolls into the service bay.

Lean management techniques, traditionally associated with manufacturing, have also been applied to 117 high-volume dealer locations. There, accelerated service lanes ensure drivers are greeted two to three minutes of arriving, and diagnostics are to be completed within two hours. Team huddles are run twice a day to keep everything on track.

Mystery shoppers and dealer feedback

“It’s incredibly important for us to get feedback from the dealers,” Belisle adds, referring to two-minute online surveys that will now reach out to 20,000 employees four times a year. The goal here is to discuss who they interacted with in the last 90 days, and identify the experience. Results will be shared during the annual dealer meeting at the NACV Show.

Using a service known as CallBox, mystery shoppers are reaching out to dealerships and their competitors in top markets, too, checking things such as the number of rings before a phone is answered, and whether they collect a customer name.

“Quite frankly, service sells trucks as much as trucks sell trucks,” Baumann says. “I’m very proud of what we’ve accomplished as a team so far, and it’s just the beginning.”

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