What I Need From a DealerBy Joanne Costin
Article Date: 03-01-2008
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.
The fleet manager for Ryan Inc. Central says he wants to partner with progressive dealers. He also shares other criteria he looks for when choosing who he does business with.
Greg Kittle is just one equipment manager, but managing a $143 million fleet for Ryan Inc. Central, based in Janesville, Wis., makes him a very important customer of at least 10 preferred dealers and a big potential customer for hundreds more. Kittle recently shared his thoughts on how dealers might become better business partners for construction firms like Ryan Inc. Central.
Ryan Inc. Central opened for business in 1884 and today ranks as one of the largest site contractors in site preparation and earthwork in the U.S. Operating in the Midwest and Mid-Atlantic regions, the company is involved in a variety of construction markets including single and multifamily subdivisions, commercial/industrial construction, landfills, wetlands, power plants and golf courses. Because of the company's size and experience, they are often called on to handle the projects with the tightest time schedules, largest scopes and most difficult soils.
For Ryan Inc. Central, iron is the single biggest item on the company's balance sheet.
"In a site development company, equipment expense as a percentage of gross sales is far higher than for any other contractor," said Kittle. "If you are a highway/heavy contractor that does highway work, governmental paving, road reconstruction bridge building, your equipment cost as a percentage of sales is far smaller than it is for a site development company." According to Kittle, higher utilization means average fleet age is generally a lot lower in a site preparation company.
Kittle's role is to not only manage the short-term return on investment from a core fleet comprised of 2,000 machines and trucks, but also the long-term asset value of the fleet. Assisting Kittle in this role are two equipment maintenance managers who are responsible for preventative maintenance and a technical services group comprised of three people responsible for machine health and equity preservation. Dealers are critical partners, with 90 percent of the company's repair and maintenance events outsourced to them.
Outsourcing allows Ryan Inc. Central to focus on their core competency of "moving dirt." But it also supports the company's belief in strong dealer partnerships. "We are sensitive to dealer margins," says Kittle. "We need them to make money so we can sustain our partnership. Product support is a good outlet to get them some margin and some revenue. It is for relationship purposes as well as for the competency issue."
Mutual nondisclosure agreements add a level of trust to the partnership. "We are able to have a dialogue that most people don't have," said Kittle. "Our biggest fear is some of the national accounts that want to buy directly from manufacturers. That is a horrible idea. We like having local distributors."
The Ideal Dealer
So what is Ryan Inc. Central looking for in a dealer?
"We like people that have an involved ownership and value long-term relationships." Kittle believes it's important that dealers look at their business in its entirety, not just in terms of a single machine sale or a product support event. "Sales is the easy part of the equation," said Kittle; "product support is more difficult."
Progressiveness is another quality that Ryan Inc. Central values in the dealers with which it partners. For Kittle this means a willingness to try new things such as integrating business systems.
"We waste incredible amounts of time," said Kittle, "- my time, their time, everyone's time - with antiquated mail invoices and nonelectronic means of data transmission."
In fact, Ryan Inc. Central is currently working on a pilot program to integrate its IT systems with two of their current dealers.
"They all need to start making the whole experience less cumbersome," said Kittle. "It is not just a matter of buying a machine and expecting it to run well. We need to figure out how we can do business together and take costs out of the relationship."
As an example, Kittle would like to access a dealer's rental inventory online, select the machine he wants, and arrange for pickup, purchasing and payment with a few clicks, and no human involvement.
"I would pick one dealer over another because they had a b-to-b system that was effective, all things being equal," said Kittle.
Product support is another area where Kittle believes dealers could benefit from embracing new thinking. With technicians in short supply, he'd like dealers to offer these services for rent.
"They need to have a little more sophistication in delivering those types of products and services," said Kittle. For Kittle, a progressive dealer is continuously looking at the health of their machines with the assistance of the manufacturer, and finding any product issues in the field.
Education is another area in which dealers can gain a competitive edge. It is important to not only educate end users on how to avoid product failure, but also to prepare fleet owners for the future by sharing their knowledge in areas such as emissions regulations. Kittle believes dealers aren't doing enough to educate both themselves and their customers about emissions, EPA tools and aftermarket solutions.
"Someone in that dealership needs to be able to speak about the different emission requirements throughout their area of responsibility and help guide their customers in fulfilling those obligations."
Do Current Preferred Dealers Make the Grade?
On average, Kittle gives his preferred dealers a B, but says performance varies from dealer to dealer.
"There are some that get an A in product support and an F in sales."
The biggest reason for an F? Not delivering what you promised. On the positive side, Kittle says he has been pleasantly surprised by the Deere dealer network and is also very satisfied with the Caterpillar dealer network. The company uses more Deere dealers than any other type.
Kittle cites flexibility as well as investment in training and tooling as key factors that make one dealer better than another. "The best dealers have flexibility in their delivery and invest in the tooling and training," said Kittle. "They can adapt to the business model of the customer."
Partner is a term that is often thrown about loosely in business conversations, but Ryan Inc. Central has clearly embraced it. Now may be the time to ask if your business is ready to do the same.
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