One of the most important choices a manager has to make is how involved the fleet should be with its dealers. What is the depth of the partnership? What are the boundaries and what is the communication like?
A basic working relationship with a salesperson or sales department for equipment acquisition is a given.
But the depth and philosophy behind the partnership can help a fleet not only receive the best “deals,” but also help the entities work better together and forge win-win alliances in additional areas, such as data, maintenance, long-term service contracts, warranty administration, rebuilds, and more. There are also intangibles, softer areas, such as which of two fleets will receive limited service resources or parts first.
Every area, however, can be enhanced by good and near-constant communication whether the fleet is large and national or small and regional.
Ernie Stephens, CEM, now SVP of equipment at Infrastructure and Energy Alternatives (IEA) in Indianapolis, is in the interesting position of having recently changed employers. He is currently involved in comparing and evaluating dealer partnerships between his old and new companies to see what can be done better. Early on, he is focusing on those lines of communication.
“It’s probably too early to tell what’s all going on here, [but] the more I dig, the more I find,” Stephens says. “I will say that several of my Operating Companies are having great luck with building some of those partnerships. One of them is even getting the third leg of the [AEMP Equipment] triangle involved: the OEM. A couple have no clue where to start. It’s like, ‘Well, we buy Cat and it’s all good from there, right?’”
The Equipment Triangle is a philosophy advanced by AEMP (Association of Equipment Management Professionals) describing the continuing relationship between the end user, distributor, and OEM/supplier in the lifecycle of a piece of heavy equipment or product.
It is meant to remind those in the heavy equipment industry that in this multitiered relationship everyone is entitled to receive the respect they deserve, and all transactions are to be win-win for all concerned, the association says.
The Equipment Triangle
From the end user’s perspective, the association’s Equipment Triangle represents the OEM/distributor product support programs that enable the end user to achieve the highest possible availability at the lowest lifecycle cost.
“[I’m] really trying to clean up the relationship side of things and draw the boundary lines again,” Stephens says. “I feel like my No. 1 job right now is fixing communication breakdowns. Easy to do as the new guy, as I’m not sure what happened in the past for them to stop.”
Stephens says his efforts start with talking to his OEM corporate reps to learn the history of the relationships and what feedback they’re getting from their dealers.
“Then I talk with our company equipment managers and figure out their frustrations or shortfalls,” Stephens says. “Then we get them both together and take on the dealers. This helps when going into new areas of work.
“For the areas we already have partnerships in, it’s in reverse,” Stephens explains. “Have those open communications with the dealers, and then work together on the OEM. It’s nice to keep everyone on the same page.”
John Meese, CEM, (pictured above) senior director of heavy equipment for WM (Waste Management), Houston, understands the equation from both sides, having worked at dealerships before running a fleet.
“WM has always tried to regard our OEM dealers as partners,” he says. “Without WM as a customer, their parts, service and sales business may suffer and our operations may struggle to run efficiently. With a background of 20-plus years of working in a dealership network, I understand how their business works and we share knowledge at WM corporate with our Area Heavy Equipment Managers.”
A large part of that sharing for Meese is reminding his people of how an operation like WM should conduct itself, regardless of it being a large national/major account for OEMs and their dealers. WM’s diverse fleet includes everything from heavy iron for dozing and compaction work in landfills to wheel loaders for transfer stations to on-road assets such as natural-gas driven waste collection trucks.
“I have made it very clear to our field team members that while we may be the big gorilla in the room, everyone will conduct themselves with a high degree of respect, knowing that the dealer people they work with have a job to do just as they do,” Meese says. “If a manager is struggling with a particular dealer or branch, I suggest that he/she call up and ask to meet their contact and offer to bring the doughnuts, if they will have the coffee ready.”
Already, that is a sign of compromise and a willingness to work. It’s no wonder that WM’s partnerships run deep and the gains are multlifold.
“WM has contracts with the OEMs that provide very detailed discounts, extended warranties, training, and a number of other areas,” Meese says. “All of this is put into reality via the dealers. Every OEM has a number of dealers, and these individual dealers can be managed as differently as night and day. These differences can exhibit themselves in how the programs that the OEMs provide are interpreted. A solid, amiable partnership with that dealer and their branches can contribute to how those programs are administered within their area.”
Meese cites an example of a machine that has a failure to a major component that occurs 150 hours outside of the warranty.
“A dealer technician can access the machine’s ECM and see that a high percentage of the ‘clock’ hours are actually idle hours and provide support on that repair,” Meese says. “Another example can be the preferential treatment by a field service manager who may have two customers both needing a technician. Which of the customers gets the technician may boil down to the relationship that customer has with the dealership.”
Dealer relationships smooth "intangibles"
Solid, deep relationships can indeed help fleets with such intangibles or the on-site last-minute decisions that can make or break a job. They are not without conflicts and emotions. “I think the one [valuable lesson] that I try to instill in all of our managers is to keep emotions out of their discussions with their dealer personnel,” Meese says. “Many times, I’ve had to travel to a meeting with a dealer’s senior management and their local team along with the WM local team.
“The first thing I require is that everyone get their chance to express their frustration and their side of the issue in whatever terms they need to use,” Meese says. “Once that’s done, everyone must put the emotional side of the discussion away and just deal with the facts and find a resolution that is acceptable to both sides. There is always an opportunity to find that win-win answer to a problem.”
From the dealer/distributor’s side of the AEMP Equipment Triangle, a win represents the opportunity for a sustained business relationship, allowing the distributor to differentiate themselves through problem solving and value-added product support services, ensuring that customers achieve the highest possible availability at the lowest lifecycle cost.
From the OEM/supplier’s perspective, AEMP says the relationship rests upon a foundation of trust and mutual respect for each party’s proprietary information. In the relationship, open and honest communication between the parties gives the OEM a unique opportunity to understand the end user’s needs and thus develop products and support programs that are best suited to meet those needs, thereby gaining or strengthening competitive advantage for all three sides of the triangle.
Yes, these are the textbook—or CEM manual—definitions, and in an ideal world everyone wins. But no fleet, dealer, or OEM can achieve optimum results without continuous, quality communication.
