Navistar Says Truck Parts Business Needs E-Commerce Approach

August 28, 2019 by Jerry Hirsch, @Jerryhirsch

The trucking industry must adopt same-day delivery, real-time inventory data and predictive stocking – technologies pioneered by e-commerce giant Amazon and others.

That’s the assessment of Joe Kory, Navistar International Corp.’s senior vice president of parts and distribution. Kory said the owner of the International Trucks brand is already working with its dealers to meet evolving customer expectations shaped by e-commerce.

Here are 10 ways he believes the truck parts and repair distribution will change.

CHANGE OF FOCUS

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Joe Kory, Navistar’s SVP of parts and distribution.

Parts providers such as Navistar and its dealers must focus on keeping their customer’s trucks running, or on so-called uptime. That’s how fleets make money and it figures into their cost-of-ownership calculations. “Those (manufacturers) that are easiest to do business with will win,” Kory said.

CUSTOMER EXPECTATIONS

Navistar must adapt to meet customer expectations shaped by every other experience that they have in the marketplace. That includes buying consumer goods from Amazon and others.

“Expectations just get higher as companies start making improvements in their ability to get deliveries to their customers faster,” Kory said. “We have customers who instead of wanting a 24-hour-turnaround-time on truck repairs, want six-hours.”

SMALLER AND CLOSER

The parts service network of the future will have more and smaller distribution points operated both by the OEM, or original equipment manufacturer, and dealers.  “These will be smaller facilities located closer to our customers and offering much different deliveries. They will need to meet the expectations of the world we have today,” Kory said.

SAME DAY

Truck makers will need to develop more ways to get parts to customers on the same day and multiple times per day. Navistar has launched same-day delivery of critical components to service centers.

“We’re also doing some pilots with Lyft, for example, to offer quick delivery from our distribution centers to our dealers and from our dealers to customers,” Kory said. “We are using some unconventional thinking in terms of how we normally deliver parts.”

DATA, DATA, DATA

Truck parts inventory systems will use analytics, telematics and artificial intelligence to predict what parts to stock and where. The industry has previously relied on historical demand to forecast for parts inventory needs. Navistar is using data to transition to predictive stocking. Kory and several Navistar dealers say it already is reducing repair times. The correct parts are stocked in the right locations for expected repair needs.

“Our future success will be predicting and ensuring that the right parts are on dealers’ shelves before the trucks that need them get there,” Kory said.

NEW TECHNOLOGY

Truck manufacturers will start to use 3D printing to make low-demand, hard to tool parts. Navistar will equip all of its distribution centers with 3D printers to make sure it can quickly provide low-demand parts for customers. This will end the need to stock parts that are rarely needed.

INDUSTRY CHANGES

Transportation models are evolving with distribution changes. “There will be more dedicated deliveries and more last-mile delivery. This will go along with the additional smaller locations that we have across the network,” Kory said.

THE AMAZON EFFECT

More customers are expected to order parts through e-commerce rather than visiting a dealer or store to purchase.

“We expect that to continue growing substantially over time,” Kory said. “We need to be prepared if we’re going to compete with aftermarket competitors and the e-commerce space.”

FEWER ROADSIDE BREAKDOWNS

Analytics and telematics will combine to detect potential problems with trucks before they occur. Service centers will schedule appointments to replace components before they fail. “Dealer shops will transition their business to scheduled work rather than fixing broken-down trucks that are showing up at the dealership,” Kory said.

CHANGING PARTS MIX

Advanced technology, including safety and collision mitigation systems, autonomous trucks components and electric drivetrain parts will change the profile of the business.

Inventories will shift the replacement parts business away from sheet metal and other parts damaged in crashes to more electronics, sensors, cameras and advance technology components.

Jerry Hirsch August 15, 2019
An improved lineup of new trucks is helping Navistar recapture lost sales and market share. Now it will retool customer service.

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