By Bob Allen
This article was published in the June 2019 edition of NTEA News.
Special feature: A conversation with George Survant, NTEA’s senior director of fleet relations, on the importance of partnerships in the work truck industry.
When a commercial vehicle breaks down on the side of the road or on a job site, the cost of having that specific vehicle unable to be mission-ready can become very expensive, very quickly for the company that owns it. At that moment, the vehicle’s owner really can’t put a price on having a partner that helped create a more reliable truck in the design and build process.
So then why has much of the industry previously built their relationships on a price-driven model at the expense of, well, an actual partnership?
“The ability to rely on stable relationships with suppliers and customers is becoming increasingly important for the long-term reliability of the work product, the reduced time from order to delivery and the builder’s ability to add value to the process,” said George Survant, NTEA’s senior director of fleet relations.
“Reliability is a real value in this equation.”
And what’s the value of unreliability? The cost of a repair, vehicle downtime or more critically the loss to the customer that vehicle was supposed to serve.
“As trucks and the manufacturing process have become more sophisticated, the more effective communication that comes from a partnership relationship creates the foundation for building the complex equipment that is the norm for the industry these days,” Survant said.
“In my experience, when there is a clear and established relationship, better products can become the result,” he said. “Key communication is important in making trucks much more effective in the long term.”
So instead of evaluating strictly on purchase price, “typically, you evaluate your purchase decision based on a total value consideration rather than first price,” Survant said. “In practical terms, what you are buying is experience. There are challenges and problems in building these complex pieces of equipment.”
While mulling over the pros and cons of partnering, consider the landscape of the industry today given the trend toward consolidation, Survant said.
In addition, he emphasized, “The people making buying decisions in the industry have undergone significant turnover in personnel because senior and tenured professionals are exiting the business and taking their vehicle knowledge with them.”
Amid this consolidation and turnover of personnel, partnerships have developed.
Besides being potentially a better approach in a rapidly changing industry, for fleets and truck buyers, building a solid relationship with an established supplier who is likely to be there for you long-term should be given serious consideration, Survant said, because a truck purchased today may last nine to 15 years.
In addition, “There’s a tendency for existing players to become more sophisticated,” he said. “The smart play is to work toward partnerships.”
To buttress his opinion, Survant offers a few reasons.
- The more experience buyers and suppliers have with each other leads to better communication, defined expectations and ultimately results in a better vehicle.
- Partnering allows the vendor community to stabilize anticipated inventory and supply. Stability makes just-in-time delivery more effective. Stability saves money for everyone. Conversely, unpredictability can create disruption, and a disruption can create long-term quality problems.
- Partnerships allow suppliers and fleet managers to anticipate needs and roll out new products. “It allows for a soft landing for new ideas,” Survant said. It enables better planning and efficient production while incorporating more sophisticated and evolving products.
- Then there’s the potentially invaluable partnership with a supplier you trust. In an increasingly sophisticated industry, familiarity breeds contentment. And if the relationship between the customer and supplier has reached the level of partnership, new suppliers will need to do much more than just provide a lower bid. Survant offers an aphorism from another rough-and tumble industry: boxing — where, it is said, it’s not enough for an unknown challenger to just try to wrest the title away from you on points. He has to take it from you — the champ.
“You can’t just beat the champ,” Survant said. “You have to beat him resoundingly.”
Partnerships also can foster relationships driven less by hunch. As a dollars-and-cents example, when a supplier doesn’t know when a customer will pay for the vehicle, is that supplier able to provide their best pricing due to the uncertainty?
“There’s a real cost embedded in instability,” Survant said.
But with the stability partnerships promise, each side benefits by knowing what its costs will be year over year, he said.
Survant pointed out many NTEA member companies are practitioners of partnerships, doing a “stellar job of cultivating and maintaining long-term relationships in the commercial truck business.”
However, a partnership is a fragile entity that needs constant care and feeding, he said. “Right now, the constant change of personnel within the industry is providing both challenges and opportunities for companies to work more closely together. The best relationships within our industry are based on a willingness for customers and suppliers to support each other.
“Long-term success needs a long-term relationship.”