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Getting round

THE TABI

ON SPARES, SERVICE AND DEALERSHIPS

Sherriff: have always had a thing about the middleman in business. I see him as an oncost item and consequently am prompted to ask the question: Why dealerships; why don't manufacturers have their own direct retail outlets where they are in contact with their own customers?

Rawson : I feel that you are criticizing the whole truck manufacturing industry of this country. We have adopted the dealership principle and are quite happy with it—and look like staying with it.

Featherston: I must say very quickly, it does strike me as a peculiar situation where fleet operators have to go through dealers, and I see very little advantage to this. Take such things as guarantee claims, most of these I find are in fact referred back to the manufacturer with the dealer acting as a messenger. McMahon: So far as our parts operation is concerned, we certainly recognize our localized service responsibility and we find that the best way of meeting that responsibility from our centralized depot is to use a specialist dealer network.

Best: Having been with manufacturers land I don't mean Chryslers} who did operate their own depots throughout the country I can say that it was completely uneconomical from the manufacturing point of view, apart from which the operator did not get good service.

Haskins: Whilst I appreciate Mr Sherriff's viewpoint, frankly I would be very much against a manufacturer establishing depots throughout the country.

Lilley: In the service operation at Chrysler we have set up an organization which will enable us to give a first-class service to fleet operators. We do it through our dealer organization; through the implementation of our provisioning programme we are establishing truck outlets which will provide a service second to none. We are giving full back-up support to these dealers to provide the right type of facility, the right type of equipment. We are supporting the dealership by giving the right sort of training and the right sort of literature.

We are doing two things primarily: 1, Setting up these organizations to protect the product reputation, that is to give a service to the fleet operator or the ordinary commercial vehicle operator, and 2, to maximize that dealer's profitability. Through our decentralized service, operators are going to keep their off-the-road time to a minimum and get the sort of service which they are looking for.

Burkett: As a Chrysler main dealer for a good many years, I would support my colleagues round the table and say that even though our names are somewhat different, we are in fact an integral part of the manufacturing company. We are prepared to open our businesses when operators and in particular fleet operators need us. And I doubt very much whether the manufacturers would improve on what we are doing. Sherrill: I would like to come back: what I am suggesting is that Chrysler should have a depot where they presently have a distributor. When I was an operator I did not want to deal with someone who knew the manufacturer. And if I were a manufacturer I think I would want to run the show myself.

Featherston: From the word "gothe dealer is entirely dependent upon the factory. If the dealer says you can have vehicles in a month's time and the factory says no, sorry, you can't have them for two months, then you don't get them for two months. Having got your vehicles, what about the parts service? You have large parts holdings in London, Birmingham, Man

chester and Glasgow I am now talking around the order of £100,000 worth of parts—but I don't believe that there are many dealers outside those areas who have got the capability of holding that type of stock.

Rawson: When you say capability, do you mean cash-wise?

Featherston: Yes, cash-wise. Because if they are not selling vehicles then they are obviously not going to have the cash to stock the parts in quantity.

Best: We are in the process of building up our organization so that there is a sufficient market for every dealer to warrant the investment in service and parts. We are going to put on the road, in each of our five regions, additional factory fleet personnel in order to contact the operator and make sure that we at the manufacturing end know his complaints, whether they be about parts, service or sales so that we can correct them.

McMahon: I consider that our own parts service is second to none, and it is not geared specifically to the larger metropolitan areas. Our national spread of dealers holds parts stocks in line with certain recommendations which we provide. This is then coupled to those additional items which are held against known local demands. Over and above this, we at Birmingham parts division provide those parts outside this normal stocking range, by an emergency service designed to get a vehicle back on the road in the shortest possible time. Cottee: That's a very bold claim which you have just made and I hope it's true.

McMahon: It is not only true but recognized. Cottee: Are we possibly talking about two different sorts of operator? Mr Featherston is naturally interested, from the point of view of facilities, as a large national fleet operator and from his point of view I can see the great advantage of having a large central organization to deal with. But what about the 80 per cent of British hauliers, to say nothing of the ownaccount people for the moment, who have between one and five vehicles? Is your provisioning programme and your geographical distribution as geared to the small man's requirements as to the fleet operator's requirements?

Best: I think I can answer that one. I have tried this on a map of the United Kingdom with a pair of dividers and unless the operator is on the Land's End side of Falmouth or exactly in the centre of Brecon Beacons or midway between Perth and Inverness he cannot get More than 35 miles away from a bona fide Chrysler heavy truck outlet. Now, in the urban areas we recognize that on the medium range of vehicles you have to have service available very much nearer than 35 miles. In the high density areas of Manchester, Birmingham, London, Glasgow, Edinburgh, Newcastle and Bristol I think it will be a pretty poor job if the operator has to go more than five to 10 miles to find a bona fide outlet. But on the heavy trucks he will not have to go more than 35 miles unless he is in the isolated parts of the country which I have mentioned.

Featherston: Could I ask Mr Best what he means by an operator going 6 to 10 miles or 35 miles—to do what or to get what?

Rest: To get bona fide service assistance or first-class parts assistance.

Featherston: So, your parts dealer, as I understand it, is going to be able to satisfy a small operator in the 5 to 10, 35 mile radius on any parts he requires.

Best: When you say any parts he requires, I wouldn't agree with that because you are indicating that the parts supply would have to be 100 per cent.

Featherston: Sorry, but I'm not. Even in London where you have a tremendous parts holding one would never expect you to satisfy parts requirements to 100 per cent. Therefore presumably in your smaller areas the chances • are tremendously below 100 per cent.

McMahon: I think that this is probably a question of "what and how quickly". The answer is, therefore, that we can satisfy 97 per cent of our dealers' requirements by our 24 hours turnround time on emergency orders. Rawson: Jack Featherston suggests that he would rather have a manufacturer in place of each main dealer. Looking at the motor industry in the UK as a whole, there is a cash shortage, and for a manufacturer to invest in premises. parts etc to run the main dealerships would be totally uneconomic. Your supply of new models would dwindle and you wouldn't see another one for 10 years because of cash requirements to run a dealership network. Featherston: I'm sorry. If the manufacturer dealt directly with operators he would not require to multiply the stocks of parts that dealers hold. In other words, operators would in fact hold their own parts.

Burkett: We are stocking parts now.

Featherston: What I would like to know from the dealers is what they believe they are offering to operators which manufacturers could not offer direct. But before we can talk about parts or service we have to get the vehicles, and the person who controls the flow of vehicles to the customer is not in fact the dealer—it is the manufacturer.

Bullock: If I understand Mr Featherston correctly he is talking more about ordering vehicles and not the servicing of vehicles. I think he would rather go direct to the manufacturer and discuss what sort of vehicle he wants. lt may well be that Mr Featherston is reasonably satisfied with the servicing side of the operation through dealers, but he may have other feelings about how quickly he can get the vehicle he really wants. Mr Featherston, is that what you are really saying ?

Featherston: Yes. I think that until one can establish a delivery situation for new vehicles, then to talk about dealership or factory is neither here nor there.

Burkett: If you can't establish this without going direct to the manufacturer then there is something wrong with your main dealer. Featherston: Until I have a vehicle on my fleet strength, there is no point in my talking about spare parts or service, and the control of that vehicle until I get it is at the factory. Burkett: Yes, but your main dealer is an extension of the factory.

Featherston: Let's get down to simple things. Why should I have to place an order on a dealer for a vehicle who then passes the order to the factory? Why can't I 'phone them up direct?

Sherriff: Would the dealers be prepared to Set up within 35 miles of all main centres a 24-hour spare parts service? This is what the transport operator in the 1970s needs to keep abreast of the maintenance requirements of the 1968 Act.

Rawson: 1 would say yes, if it could be proved to be economical.

Cottee: Would you have differential spares prices for night and day in that case? Rawson: At the moment a 24-hour parts service is not viable. I think a surcharge or reduced discount for night service would not be unreasonable.

Burkett: Would you be prepared to pay full retail price for your parts if you could get them at any time in the day?

Featherston: What's "any time during the day?"

Sherriff: Any time during 24 hours.

Lilley: I think we, as a service organization of a large manufacturer, would be prepared to give every support to a dealer to put in a 24-hour operation if it was going to be viable. But it has been done before and it was not successful and did not get the support of the fleet operators.

Sherriff: But was this before the pressures of the present maintenance requirements?

Lilley: Yes, it was.

Featherston: 1"m sorry, I didn't answer your question. I think the answer is no, I would not pay a premium for spares supplied outside normal working hours.

Sherriff: But then no doubt because of your large fleet you can command a pretty good service. If I started a business tomorrow with a couple of machines could I get the service that Mr Featherston can command? Rawson: I can see no reason, Mr. Sherriff, why you should not expect good service in your dealings.

McMahon: As far as the after-sales service on parts is concerned there is no different situation whatsoever—nationally—between the small operator and the large operator.

Featherston: There must be a simple matter of economics here. You have the situation where large dealers who sell, say, 100 vehicles a year each must be able to stock up to the tune of, let us say. E100,000 worth of stock and give the service to the customers. If, however, you take a sma-II fellow in a small town who is probably only selling, say, 20 vehicles, he cannot afford to stock £100,000 worth of parts. How can he service national fleet vehicles which are bought elsewhere but are based in his area ?

Burkett: You have hit the nail. right on the head by highlighting the smaller dealer: this is where you can run into trouble. Because unless he can see the return on his investment he just isn't going to stock it. so it comes back to a relationship between the manu

facturer and the dealer to meet your demands at all costs.

Cottee: Could we get the general feeling about this from Mr Best?

Best: I know you are quoting hypothetical cases of a man selling, say, 20 trucks. but this potential is not sufficient for the appointment of a main dealer. I repeat that we have to provide sufficient potential for each main dealer to warrant the investment and make it an economical proposition.

As manufacturers we are particularly interested in the operator and in effect our main dealers are in various parts of the country the equivalent of a manufacturer's depot. We consider that the present system of carefully choosing main dealers in certain geographical locations is the best way of looking after the operator to our mutual advantage.

Coffee: This is interesting. Is this based on an assumption of single franchises? Are you talking of people who are economically viable at a big size in fairly remote areas because they also carry a franchise for another make? Best: No. I am looking upon it as an exclusive main dealer.

Rawson: Could I just take up this question of parts? I think too much importance is placed on the dealers' throughput of new vehicles. You do not stock your parts department according to the number of new vehicles you sell. It's a question of demand, Sherriff: How does a manutacturer gear his spare parts production to meet his new vehicles production ... and how does the dealer stock for new vehicles coming off the production line? Does the dealer say we must hold 10 per cent fast-moving spares, or is it 5 per cent, or do you just wait for the demand?

McMahon: Correct anticipation of the full spectrum of parts demand on a newly introduced model is difficult. However, demand in general terms is reasonably consistent against an overall historical background of similar models and we anticipate our stock requirements accordingly. It is not until the model has been in service, however, that either we or our dealers are fully aware of the demand peculiarities of that particular vehicle.

Sherriff: But shouldn't he know? After all, he's supposed to be carrying out extensive tests before his vehicle goes on to the production line.

McMahon: lain, the premise appears to be that the parts back-up to new vehicles in particular is inadequate, Sherriff: No, i am not saying that; I'm asking, what is the situation?

McMahon: The situation is that our parts availability on commercial vehicles, as for motorcars, is absolutely first class. The parts availability is very, very acceptable at this point in time.

Sherriff : Acceptable to you or the operator? McMahon: I think from an operational point of view our parts availability is at an extremely acceptable level.

Burkett: I would support you, Brian, but I see the point that lain is making: are you really saying that you have got 100 per cent parts availability nationally ?

McMahon: I'm saying 97 per cent. Burkett: But it's the 3 per cent that worries the operator.

Cottee: We have two operators here; can we just ask whether they are satisfied with the spares situation and the service situation.

Featherston: Before coming here today I had a word with my maintenance manager and asked him for details of the current Chrysler parts situation. He said that in the main centres of operation things were as near perfect as could be, but in the provinces vvhere , we only had an odd vehicle here and there and where we were dealing with Chrysler main or sub-dealers whose turnover was comparatively smaller, the situation was quite different and many parts were extremely difficult to come by. This is where, in my view, Chrysler are falling down when compared with other major manufacturers.

McMahon: When compared with other manufacturers?

Featherston: Yes, indeed. If one could have a map on the wall and see the main dealer coverage of Chrysler UK Ltd and also see superimposed on that Ford Motor Co dealers and Vauxhall Motors dealers then I believe they have far more main dealer coverage than Chrysler.

Best: You were talking about dealing direct with the manufacturers and the question of us giving information, and we have dealt with the necessity of having main dealers in certain parts of the country. Chrysler United Kingdom Ltd have set up five regional offices which we are strengthening and part of the duty of the regional office is to make sure that the main dealers in that territory know when fleet vehicles go into that territory. We are building up the regional offices to give the fleet operator better service

Cot-tee: When we have challenged some operators to justify their complaints about spares, we have sometimes found if you get down to detail that it is simply bad organization on the part of the operator. He either is very poor in specifying part numbers or, having been told by a dealer that that particular part is not held by dealers but is a factory held spare, because it is very slow moving, he nevertheless shops round and tries to find one. Is it your experience that spares "shortages" can often be laid at the door of bad organization and lack of forethought by the operator?

Haskins: I would like to come in here .. and take you back to my original remarks. I hate to talk to a voice on the end of the 'phone to which I have great difficulty in putting a personality. This is why I used the words "personal contact". If my storekeepers run into trouble' on spares my office door is open; they can come to me and I can make contact with the person that I want to talk to.. .. I can iron it out in two or three minutes and the spare is on its way.

Cottee: You have a very great advantage over a large number of smaller operators who may find that the storekeeper who was at the XYZ manufacturer's store yesterday has done and the new man doesn't know you or your storekeeper or anyone. It seems to us thatthis lack of personal relationship is the problem in very many cases. When it goes, the system goes. Does this reflect on the system relying too much on the person?

Still, it seems to me that having covered spares, service and dealerships we've come up with some striking conclusions. One is that the Chrysler United Kingdom spares situation is in the main rosy and we have heard no complaints about that except possibly in the rural areas, which Mr Featherston mentioned, where he thinks there is room for improvement.

So far as service is concerned, 24-hour service is a great idea but it seems the operator has got to pay for something that has not proved economic to provide in the past.

Would you each care to add a final point, gentlemen?

Featherston: I would like to see operators being able to order direct from the manufacturers; it is for the operator to decide where he is in fact going to place the final order: Best: I would like to state that whilst the conversation has been beamed at fleet operators, the same service and parts facilities apply to the small operator as well; we are not concentrating only on the big operators.

Lilley: Yes, this is so. We are very conscious that he is part of our bread and butter and we go out and look after him just as much as we want to look after the fleet operator.

Haskins: Could I leave with just one request to the manufacturer that the spares department gives a lot more consideration to clearly tabulating supersession part numbers. This is the only loophole I can find at the'moment.

Burkett: I would like to say that Chrysler have gone a long way in conjunction with their main dealers to meet the needs of Mr Featherston and also of the smaller operators but I still feel that there is further improvement to be made.