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Presented by Alan Fox and David Manse!

10th October 1981
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Page 25, 10th October 1981 — Presented by Alan Fox and David Manse!
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Which of the following most accurately describes the problem?

AFTER-SALES service is a vital aspect in any industry but more so in a service industry like road transport. Alan B. Fox (Iveco) and David Mansell (OAF) faced the delegates on this sensitive subject, telling them how the manufacturers viewed their own service and the operators' attitudes to it. Manufacturers who do not place the proper priority on after-sales activity will not last long in business. In road transport this is more than true because companies making and selling the products of the cv industry are involved with them for a very long time after the initial sale has been made, according to Mr Fox.

"When we sell vehicles we have to be concerned about what happens after the sale. We must be concerned with developing and sustaining an organisation to make sure the vehicles are kept running — to service and maintain them, and to supply replacement parts conveniently as they wear out or go off the road," he said.

Mr Fox said that much market research had been carried out in efforts to establish concerns which are important to vehicle operators. After-sales support always comes out high on the list of essentials and this is recognised by all manufacturers.

He posed the questions "What are operators' after-sales problems and are they being solved?" Only the operators can provide accurate answers to these questions and they will be different depending on who is asked, he said.

One operator will argue for parts availability, another will want better dealer service facilities in his locality, a third will be looking for more comprehensive training facilities for his staff. According to Mr Fox: "The only answer for the manufacturer is to aim continuously to improve all his after-sales services."

He sees the most difficult aspect in establishing such an operation is to decide what has to be provided to produce the right level of after-sales support to the product — to identify the potential demand in the first place, and then the size and location of dealer network to match It.

However, when setting up in a new market, the problems like the costs are daunting. He said IVECO is well through this setting-up phase having been established in the UK for over 15 years with Magirus and eight years with Fiat.

Mr Fox said if the operator is to have the benefit of acceptable after-sales support, it is essential that the manufacturer has the right attitude. They must start by recognising that everything must be done to ensure a satisfactory performance from the vehicles, whether the customer is a major fleet or a small operator.

He continued: "The customer, regardless of size, is the most important asset of any business. Operators who raise a complaint must never be considered a nuisance — they have a problem, and the contact must be taken as an opportunity to put the problem right."

According to Mr Fox, the objective must be to aim contin uously to raise the standar( after-sales activity in respel both spares and service, I both dealer and manufacti But the great difficulty is d this within the economic straints set by the scale of total business,

"It is a different proposi for a manufacturer concei with just a narrow sector of market, as opposed to covering a spread from tonnes gross to maxim' weight tractors and heavy road equipment," he said.

The requirements at the and bottom ends of the we scale are quite different, acc, ing to Mr Fox. Looking at de location, for example, it is sirable for the service point t( reasonably accessible from operating base in the case smaller vehicles — within tel 15 miles or half an hour tra ling time — since less than per cent of such vehicles are viced by their owners.

In the case of heavies, he s it is estimated that up to 70 cent are maintained to sc extent by their operators, so main requirement is the ag of parts, the location of dealer becomes less importer

He went on to say there also differences in space quirements, and when cover the field, the ideal dealer lc tion is a large site in a built area to cater for the light veh operator's needs.

When considering cities st as London, Manchester and mingham, costs for such operation would be totally prc bitive, it is therefore difficult find dealers there. Instead, pattern is to have locations the peripheries of cities wh space is more readily availa and less costly.

Assessing potential demz for vehicles and service is di cult; doing the same in resp of parts is even more so. Thi particularly the case with nes introduced models where thi is no historical information av able on which to base stocki levels.

The finance needed to esti adequate parts back-up for s that will be sold in )nably high quantities is iderable. There is a major ntage when model range )nalisation is company y. This brings benefits to operator and also to the ; manager — as does design lity.

is is sometimes in conflict operational requirements aeping up to date with the :et but nothing is more frusig for the parts manager his getting his parts coveright and then learning that 3 has been a change in deeven the most minor alions can have wide effects. Fox told the delegates that still not generally realised difficult a job those have are involved with supplying cle parts nor how costly this tion can be.

-1 spite of the considerable Is being made, and a lot of cated work, there will als be occasions when a parti

r part is not obtainable ar from the dealer or the lufacturer. This is the testing for the after-sales organise," he said.

irts availability figures are n quoted as a measure of iency but he said that they 3 very little relevance to the rator needing a vital missing

the odd not-available five or )er cent of total parts holding items that are rarely needed, few problems are created, if they are fast-moving is, then there are serious difIties. It is little comfort to an rator wanting a part to be that it is one of very few of 20,000 line items that is not Iediately available.

e warned the growth in the rket of outside sourced urious" parts has a damageffect in this area, much ater than is often realised. iere are many outsiders lming the profit from spare -ts supply but they get )Ived only with those parts ing a big turnover.

hese are the "fast movers" brake linings, clutches, filtgaskets and so on, leaving vehicle manufacturers resisible for the more costly and rver-moving parts.

ecause these "fast movers" 'e a big turnover, profit mar s can be cut, and naturally, ; makes an attractive proposi to the user. But the problem that such suppliers do not re any responsibility or comment to maintain supplies — i especially maintain quality als — they can easily drop out if their supplies dry up or the profits become less attractive through a fall in demand by a model going out of production.

"It is then the manufacturer who has to tke the responsibility and perhaps be criticised for not having in stock a part that he may rarely have been asked to supply previously because of the few pence saving in the good deal offered by the outside supplier," said Mr Fox.

He said that this is a problem that has to be faced by the indus try as a whole. "The hard fact is that the manufacturer has to be able to make a profit on spares to enable him to fulfil this vital service function, just as he has to make a profit out of new vehicle sales which is not too easy at the moment, to provide the total after-sales back-up to his products."

In the recent past to meet the problem, at least in part, some manufacturers have made re ductions on selected items in their parts price list. This in a way is like "loss leaders" in the grocery trade as the parts selected are not restricted to fast moving items but more to the type of parts normally put forward by fleet operators when evaluating alternative vehicle makes for purchase.

He said it was very important for operators to include parts in an exercise aimed at assessing costs of operation which is now recognised as being far more important than simply comparing vehicle buying prices — or worse still, discounts.

However, when assessing parts usage costs, it is not satis factory simply to compare part names. As well as the cost of 'maintenance, which includes parts, main factors in assessing cost of operation are durability and reliability of the vehicle design and these same factors should be taken into account when looking at parts prices.

"What is important is the 'value' of the part," said Mr Fox, "and comparison of parts fitted to different makes of vehicle will not be feasible on this basis until manufacturers produce vehicles of identical specifications.

"A good example of how misleading it can be to compare only part names is to look at the shackle pin design that has been used for many years on certain Magirus heavy models."

He believes that the attitude of the manufacturers when the problems arise is vitally important.

Every manufacturer has a unique and fast system for supplying parts for VOR orders, but even now, there are operators who do not use these systems properly. When unable to get a part from the usual source, dealers will phone around other dealers in an effort to find the item.

In the process they waste valuable time before involving the manufacturer by which time the customer is probably irate.

In circumstances where an urgently needed part cannot be supplied by a dealer, the first essential is for a VOR order to be placed as quickly as possible on the manufacturer.

There is a good chance that he will be able to supply — and deliver within 24 hours — because in a shortage situation he will try to retain, as far as possible, a minimum stock on his own stores shelves for emergencies, rather than supply against dealer stock orders.

It is important to work within systems established to cater for service difficulties that may arise and for operators' staff to be made aware of the most effective procedures. The same can be said about the use of breakdown recovery and other services offered mainly at low or even zero cost by many makers. These are only effective if drivers are taught how to make use of them.

Operators have responsibilities also and must be prepared to play their part in ensuring that the services available are used to ensure the smooth running of his vehicles. It could be said in some areas, however, that as a generality, operators place almost too much responsibility on the manufacturer and have be

come wholly dependent on dealers for even the smallest item.

Operators could do a lot more to help themselves and at the same time keep away from problems that could be avoided "Too often operators carrying out their own servicing will do nothing to plan their parts needs, leaving the order of items like filters and others that should be anticipated requirements until the vehicle arrives in the workshop," he said.

He said that even in the most professional cv dealerships, there will always be the occasion when even the most regularlyused parts will be out of stock — perhaps through a sudden rush of orders — and this should be taken into account.

For these very reasons, it is essential that operators build up and maintain a close liaison with the dealer on the expected maintenance schedule — planning ahead in an organised manner will improve operator profitability.

Mr Fox said: "There can be no doubt that the involvement ol the manufacturer and dealer in after-sales care has improved considerably over the years.

"Remember the days when al the heavy end of the market, it was possible to manage with just one or two company depots and distributors to cover the country. How different it is not — and it is not finished yet."

He said just as there is a trenc for fleets to break away from total involvement with vehicle operation by going to contract hire, so we can see increasing interest in maintenance work being put out to contract — to forms of full-service leasing.

More and more companies are asking the question "Is it economic to do our own servicing?" and looking for ways of getting away from the problems. It would be naive to think that there could ever be a time without problems on the after sales side.

There are too many variables to take into account but manufacturers do put considerable effort and investment into reducing the risk to the operator in reducing, for instance, the cost of ownership, especially through new and improved design levels to give greater reliability and durability.

"We may not be successful every time and may even fail in strange and surprising ways, but such occasions are rare when the substantial numbers are taken into account," he said, "and obtaining the best results from a vehicle requires cooperation between operator, dealer and manufacturer.

"Each has to play a full part and each has to accept his particular responsibilities to achieve the best results," he continued.

Mr Mansell said that road transport is unlikely to go through dramatic changes in the coming era, though he expects a continual improvement in the state of the art through evolution.

Certainly economic forces — legislation, the need to conserve energy and pressure from the environmentalists — will on the other hand affect total business and that goes for the area of after-sales service.

He pointed out that he was referring in the main to commercial vehicles over 31/2 tons gvw and had limited it in scope to the European scene. Quite another scenario would be written for Third World countries which are important markets for most European truck manufacturers.

Mr Mansell turned his attention to aspects of the business where changes can take place external or internal reasons and the influence they are likely to have on after-sales service, trends and developments.

He feels that products of cv manufacturers who survive the new era are likely to become more homogeneous in basis oncept and appearance. They Mil, he said, be of higher standard and quality and there will lot be much to choose between various manufacturers in terms of product value for money.

The reasons he gave for this assumption were six fold.

• The cv designer is being constrained and influenced more and more by legislation, rising energy costs, environmental and social pressures, safety standards and very often the major component suppliers.

• The escalating costs of R & D and bringing a new model into production on a shorter life cycle is accelerating the ever-changing face and structure of the manufacturing industry.

Economic and competitive pressures are forcing manufacturers to go for increased cooperation in order to reap the benefits of economies of scale in developing and producing major components such as engines, transmissions, axles and even cabs.

This in itself will to some extent tend to lessen the manufacturer's identity with its product.

• There have been statements made recently, mainly by US manufacturers, that they plan to develop a "world" truck. Mr Mansell said: "Frankly, in my view, a cv to serve all world markets and the wide range of applications is just not conceivable.

'On the other hand, the concept of worldwide major componentry from which a variety of cv locations and market requirements can be satisfied on a 'meccano-set' basis is more likely. Apart from the benefits of economies of scale in manufacture, there is the added advantage of standardisation."

Mr Mansell believes this partial loss of manufacturers' identity in the product except for items of detail will be compensated by a greater emphasis on after-sales service "where at the end of the day the real battle is either won or lost".

To illustrate the point, Mr Mansell described a recent survey among a wide selection of fleet operators on the Continent which came up with a purchase decision criteria in choosing their next make/model of vehicle on the assumption that the net buying price between the major European makes would be more or less the same.

"After-sales service influences directly or indirectly the realisation of most customers' expectations, which is what manufacturers should be concerned with," he said.

According to Mr Mansell, product reliability and total cost of operation are high on the list. This was to be expected when, he said, the standing and run

ning costs of a typical UK 32-ton artic rig today doing 50,000 miles a year are taken into account.

"Every day off the road is costing nearly £100, not to mention the loss of earning power and customer dissatisfaction,'' he warned. In the microprocessor and computer age he expects rapidly advancing technology to be applied more and more to the cv. There are three areas most likely to see such developments that have a bearing on after-sales service, according to Mr Mansell.

• Computer-aided specification selector and vehicle performance prediction. This is a system already used by DAF. From basic input by the customer on his total vehicle requirements, the system will speedily determine the exact specification, taking into account the countries legal constraints.

The system also provides information on the expected vehicle performance including fuel consumption. Getting the specification right for the job and providing the customer with what he can expect in terms of performance before a sale, can take away many after-sales service headaches for all parties.

• A "black box" with built-in devices to register vehicles performance and behaviour to warn the driver and fleet engineer when and where service or maintenance is needed.

Information stored in the "onboard computer" would release data on fluid levels, maximum and minimum temperatures recorded during the operating period, turbo boost pressures, blow-by, wear rates on brakes and clutches, integrity or electrical circuits etc.

The equipment could also include an "all systems go" checkout for the driver. Such a system would be invaluable in carrying out a good planned preventative maintenance programme.

Vehicles are also expected to be equipped with diagnostic connection points for carrying out rapid service checks and measurement of critical wear items.

• Another area where DAF sees the use of microprocessor is in a device for guiding the driver to enable him to optimise his fuel consumption against a given performance. We already have such a device in operation which has shown results of up to 20 per cent saving in fuel consumption without sacrificing trip time.

Developments in this area, said Mr Mansell, can be expected to progress rapidly to the

point where the whole con inter-relations between c. ratio, engine load (throttle tion) and engine speed for mum vehicle performance fuel consumption wil controlled automatically.

Such a system, howe would need to incorpora variomatic type of autor gearbox.

Mr Mansell explained after-sales service starts w sound dealer network with c rage where needed for co nient services and parts ail These people are at the "s end" of the business and re sents a manufacturer's r precious asset.

He said there are signs ir cv dealer trade that changes have to be made in the futui make the dealers more vi and able to cope with the creased demands expected f operators in the future.

The high cost of money, recent downturn in European automotive busin has made many dealers vul able. "Some manageme need a shake-up, a need more business prof sionalism," he said.

Many workshop facilities under-utilised and new facili are needed in many cases, in view.

According to DAF. there likely to be more forward i gration by manufacturers wh independent dealers are no be found in some key strat( areas or where a dealership r into financial problems. 1 trend is already evident on Continent, less so in the UK.

Mr Mansell thought that some areas it is likely there be a reduction in the numbe main dealer facilities, but an crease in satellite service poi that are wholly-owned brancl of the main dealer.

This restructuring will prov a more efficient unit with its c tralised administration, sal major repair workshop, m parts stock, and at the same ti provide the operator with wider service and parts co rage. tter use of the dealer ,hops will become essenorder to make that side of usiness profitable, and at :me time keep in check the 3e-out rates. There are instances in the UK where e-out rates are more than imes the mechanic's hourly this trend needs revers

a obvious way of achieving according to Mr Mansell, is ieping the workshop open ahours on a two-shift ba4any workshops in the UK pen no more than 50 hours ak they need to be open ast 80 hours a week to be :able and are able to proservice at times when ed by the operator at cornye rates, he thought.

believes that many dealers elocate their central operaout of the towns and city es, due to cost and space lems, and nearer the major depots and other distribupoints.

le can expect more profesal business approach in the ar management. This will in? making full use of modern auter, software systems for controls, invoicing, service rds, inventory planning, ;eting, customer date, and icial control.

this area manufacturers expected to give dealers 9 support in setting up ams which in some cases link in with their own, partirly parts stock control and ice history records," said Mr sell.

a expects dealers to enter the easing business and offer ract maintenance schemes ;h again will be supported ie manufacturer.

his opinion, a 24-hour callservice will become a stand requirement of any -thwhile dealer. Such ames will be linked into the nufacturers' 2 4-hour tilingual centralised internaal service system. The whole :ess of dealing with VOR )Iems will become more effiit using modern radio comnications systems feeding ctly into the national or interonal telephone network, he

the workshop area, he beed that diagnostic checking ipment will become a stanI tool. Many other timeing pieces of measuring de:s, handling equipment, tooland servicing facilities will :ome commonplace and ential in an age when skilled hanics are likely to be scarce I expensive. Component ex

change, rather than repair, will be the order of the day.

DAF expects the whole business of parts supply to change with both manufacturers and dealers becoming more aggressive and professional in marketing parts in order to compete with the increasing competition from a new breed of parts supply houses that are entering the market from all directions.

It thinks some manufacturers can be expected to develop their own multiparts organisation, and follow the recent trends in the car business.

Mr Mansell said that by the end of the eighties, the cv dealer network will have taken on a new look. "It is one area where manufacturers intend to devote a great deal of attention it's their lifeline for survival," he said.

We have already touched on a number of areas where manufacturer is either directly or indirectly involved in after-sales service support. Some additional support services' we envisage will emerge from the manufacturers if they are not already' available.

Developing his theme of support services, Mr Mansell said he envisaged services emerging in the future. For example improved service training for both dealer and fleet personnel. Such course being both factory on subsidiary based or conducted on site using a mobile training unit and the latest audiovisual equipment.

Special attention will be given for training people in the new skills that will be required in the industry, specifically electronic and microprocessor technology as applied to cvs.

Other developments he listed were professional factory advice to dealers and fleets on workshop tooling layout and systems; tougher dealer audits by manufacturers with the object of improving the dealerships' standards, quality and efficiency, more extensive range of factory-guaranteed exchange components, whole life costing coupled to operational leasing could in the writer's view become a reality within the next ten years.

He agreed that it was already possible to predict the total life cost of a vehicle in the same way as for an aircraft given known routings and load factors. Manufacturers, he said, could place lift limits on each component for unit docking, and he gave as an example, an engine may have a major docking schedule say of 20,000 hours when it would be taken out of service, using unit exchanges, and go through a major strip-down and inspection and rebuild sequence before it can be relicensed.

He anticipates more flexible and longer servicing intervals to tie in with vehicle legal checks to reduce downtime. He believes with the superior oil now available extended oil changes at 20,000km (12,500 miles) or more are feasible.

"In fact by using spectographic oil sample analysis on a regular basis much higher intervals could for many operations be safely used as well as providing a lot of information to the fleet engineer on what is happening inside his engine," he said.

Mr Mansell said that despite warranty practice varying in each country, the trend is more towards a 12-month period with unlimited mileage with parts and labour being paid for. "The costs of warranty are well controlled and monitored by the factory quality control people and are included in the price of the vehicle."

He said there was already a move by some manufacturers to offer extended cover or insurance on major components and drive lines after the warranty expires. He explained that such contracts should be between the dealer or manufacturer and customer rather than through an insurance company who like to have their profit. Mr Mansell said there is a great deal of confusion in the UK in the interpretation of the Sales of Goods Act, particularly in respect of loss of use. "This needs sorting out, but don't forget if the law makers and those responsible for its implementation take a too generous line then the operators will have to eventually pay in the price of the vehicle, which in turn will be passed on to the customer," he warned.

In conclusion, Mr Mansell said: "Without doubt, the next ten years in the cv industry are going to be exciting and challenging for manufacturers, dealers and fleet operator. Aftersales service will certainly play a more important role in forming a closer link and better understanding between all three parties.

"I believe that an improved attitude will prevail between manufacturer, dealer and the customer. It must not be forgotten, however, that we are all in the business to make a profit and there has to be scope for all parties to achieve this capitalist objective in order to survive and so serve the millions that depend on road transport and will continue to do so for many years to come."

As Peter Fry will tell you, the whole industry must in the years ahead unite to change its image from being the people that build and operate "those dirty, noisy juggernauts", to an industry that truly cares about improving standards of safety, levels of noise and all other social or environmental considerations that go towards making the world a better place to live in.

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