Buying, selling, and reordering truck parts on the Internet may not sound like a big deal - until you see what some fleets are saving

If you don't think you can save money by managing your fleet's parts inventory online, you haven't talked to Todd Moore lately. Moore is vice president of Lynchburg, Va.-based F.L. Moore & Sons, a 65-vehicle fleet specializing in oversized construction equipment transport.

Moore certainly had doubts about trading his on-site parts inventory for Kenworth's PremierCare Connect, an Internet-based re-supply system.

In addition, Kenworth's system sounded pretty complex. PremierCare Connect links a customer to a Kenworth dealer's parts department electronically - in Moore's case, Truck Enterprises of Roanoke - via a personal computer. As parts are removed from the fleet's inventory, bar codes are scanned and assigned to repair orders, while the part numbers are automatically uploaded to the dealership.

The next morning, the dealer's computer system automatically notes the inventory changes and creates a replenishment order. The dealer then pulls those parts from its shelves and delivers them to the customer, where the parts are scanned into its system. No phone calls, no faxes.

Moore remained a little dubious of the whole process until he saw its impact on the bottom line. With automatic electronic replenishment, F.L. Moore & Sons didn't need to stock as many parts or spend time and money on administrative details such as filling out parts requests on paper. End result? The company saved $25,000.

"For a small company like ours, that's a lot of additional cash to have available," Moore said. "The system helped us determine what parts we need to stock and what parts we don't. It's a fantastic management tool, and it's saving us money."

The Internet advantage For Ed Caudill, Kenworth's general manager, the Internet has more than one advantage when it comes to selling both parts and service. Not only does it provide cost savings to fleet customers at the system's retail end, it also allows the OEM to better manage its own, as well as its dealers', supply chain costs.

"We're not just letting the dealer and customer interact better via PremierCare Connect," Caudill says. "It also allows us, the manufacturer, to get a better idea of what we need to carry in terms of parts using real-time data. It allows us to better predict part supply levels because, via the Internet, we have full visibility of the supply chain. We know what parts the customer is using and what parts the dealer is using, too."

Kenworth links to its dealers through its Managed Dealer Inventory (MDI) program. Instead of managing inventory manually, dealers use the same bar-code and PC connections that link them to their customers - only this time, they're linked to the manufacturer.

"We're managing customer and dealer inventory through a paperless system here," Caudill explains. "We're reducing fleet and dealer investment in parts and reducing the risk of parts becoming obsolete while they wait in inventory. Not only have we taken a tremendous amount of cost out of the parts re-supply system, it takes the guesswork out of inventory levels by improving both parts visibility and availability while also reducing inventory investment requirements on all sides."

Driving cost out of the parts procurement system itself is perhaps the greatest benefit of the Internet and electronic commerce - greater, in some cases, than getting lower prices for parts, says Matthew R. Sanders, an associate analyst for the E-business Trade group at Forrester Research.

"It streamlines the business process in the way companies manage inventory and information flow," he says. "Creating 'pure' transaction efficiencies are the huge attraction here, because it allows manufacturers to get much closer to demand-driven production. Instead of making parts in a vacuum and hoping they sell, they can look at fluctuation in demand much more closely and fine-tune production like never before."

That's one reason Forrester, which is a Cambridge, Mass.-based research firm that tracks the Internet economy, believes business-to-business use of the Internet will far outweigh business-to-consumer online connections in the future.

In a report published last February, Forrester predicted that business-to-business e-commerce will top $2.7 trillion by 2004 - far more substantial than the $189 billion worth of business-to-consumer trade expected for the same year.

Forrester says that 93% of the businesses it surveyed plan to become heavily involved in e-commerce by 2002. Here are several key reasons:

* Become more efficient

* Offer better customer service

* Reduce processing costs

* Create savings

* Utilize volume discounts through negotiated volume deals

"The Internet not only allows a greater understanding of customer needs and demands, it also acts as an information tool, feeding information about those demands back into the production process," says Sanders.

That's one of the most valuable aspects of e-commerce to Volvo Trucks North America. The company upgraded its web site to allow both customers and dealers to spec trucks online; they can also place orders online.

"It simply makes it easier for us to do business," says Susan Alt, director of business planning for Volvo Trucks N.A. "It optimizes our manufacturing processes. We can monitor what people are selecting via the web site and that aids in our material forecasting for building trucks."

At Volvo's web site, customers can use its new "Spec it out" feature to select specific equipment for a particular tractor or truck model. As the customer selects options, a calculator automatically adds them up for the total package price. Once completed, customers can print spec package and price, and take it to a local Volvo dealer or submit it online to a dealer of their choice.

"It allows customers to get as intimately involved in the specification process as they choose," says Jeff Widmer, Volvo's manager of e-business. "With the added flexibility of this new system, we went from about 500 possible vehicle configurations to nearly 12 billion."

What Volvo eventually wants to achieve using its web-based spec'ing system is a 21-day order-to-delivery cycle for its trucks, says Alt. That will enable the company to reduce the inventory of trucks its dealers keep on hand - saving money up and down the supply chain: dealers, Volvo, and suppliers.

"Using the Internet this way will really save us a lot of money internally," Alt says. "Right now, we have threemonths worth of [truck] inventory in the system today. While we will still want to have inventory on hand, we won't need as much by using e-commerce systems. That saves us and our dealers inventory carrying costs and freight costs for shipping trucks to dealerships, for example. Better material forecasting also means not being left short a part and then having to expedite it from Europe. It will drive huge costs out of the manufacturing system."

Buyer benefits The same e-commerce opportunities to drive out costs also exist in the aftermarket parts arena. An e-commerce study conducted by consulting firm KPMG says the Internet is an ideal tool not only for better business management, but for regaining operating efficiencies as well.

"End-to-end supply chain visibility can ultimately improve the cash-to-cash cycle for all e-commerce trading partners," the study found.

Similar e-commerce capabilities and opportunities exist in trucking, adds Walter Kross, a managing director for KPMG who headed up this study. "The key benefit here is the business of e-purchase and e-procurement for parts and services," he said. "Trucking is a thin-margin industry, so anywhere you can drive out cost adds to the bottom line."

That's the goal of several "e-marketplace" companies, which see an opportunity to provide fleets with a single, business-to-business e-commerce site where they can search for parts, comparison shop, and order online, without having to contact dealers and distributors by phone.

"On the buying side, companies spend a huge amount of time on the phone tracking down parts and prices," says Joseph Weinhoffer, president and CEO of VendQuest, a New Jersey-based Internet parts firm.

"There's a huge mix of parts and equipment bought by trucking fleets, construction firms, and other companies every day," he says. "Instead of calling lots of distributors by phone or visiting 15 different Internet sites, we would create one site where you could search for and order parts 24 hours a day, 7 days a week."

VendQuest currently serves the Northeast, but plans to roll out its e-marketplace model throughout the rest of the country by the end of the year.

While lower prices are certainly important, Sanders points out that selling parts and services online involves much more than price. "These are much more complex transactions. They allow you to provide the best value to the customer.

"You can't just provide parts online and thrive," he adds. "You need to bundle services around those products. That's how you will succeed in this new Internet economy."

www.@road.com - Location-specific web- and wireless-enabled productivity enhancement solutions

www.ameriquestcorp.com - Direct parts purchasing online with perferred pricing from leading suppliers

www.autovia.net - Online source that allows people access to multiple parts distributors in their area

www.bbcn.com - Real-time auction, exchange, direct e-procurement solution

www.bigequipment.com - Off-road, construction, mining, and agricultural equipment for sale database

www.carrierpoint.com - Trucking services, business partners, and fleet-management information for fleets, shippers

www.dealerxchange.com - Online real-time auction of cars (primarily) and trucks

www.etransport.com - Fully integrated electronic facility for presentation, purchase, and management of industrial transportation services

www.fleetscape.com - Web-based Vertical Market Exchange (VME) to reduce cost and complexity of buying and selling truck parts

www.gocargo.com - International container shipments; freight for auction for Internet shippers

www.hookup.com - Hooks up carriers and dealers with e-commerce solutions; everything from trucks to drivers

www.ifleet.com - Online fleet-support services, including dispatching, benchmarking, roadside assistance, dealer location, driver recruiting, and compliance reporting.

www.intouchavl.com - Provides a way for dispatchers to locate fleets, communicate with drivers via Internet

www.itruckers.com - Load-posting, industry info primarily for owner-operators; partnership between the Independent Truckers Group and WBAP Radio

www.layover.com - Free online routing, mapping, and load-matching services

www.mile.com - Online fleet-management services include driver management, fuel optimization and load matching from Prophesy Transportation

www.milemaker.com - Online routing and mile-management programs from Rand McNally

www.pnv.com - Online banking for truck drivers

www.routemaster.com - Online freight-matching brokerage, bills of lading

www.soarr.com - Dealer inventories of new and used equipment (color photos and specs)

www.tradeout.com - Brings together thousands of companies to buy and sell surplus assets; over 100 product categories

www.transportalnet.com - Carrier-focused B2B e-commerce network designed to bring members productivity improvements, enhanced purchasing power

www.transportation.com - Load-matching, live auctions, parts purchasing, insurance and fuel management services

www.truckcenter.com - New and used truck sales, including titles, insurance, third-party inspection, load-matching

www.truckersb2b.com - a.k.a. TruckersCo-op.com - A B2B program to provide savings to trucking companies

www.truckfleet.com - Dossier 32 fleet maintenance software from Arsenault Assoc.

www.truckrealm.com - Truck-related information

www.trucktirexchange.com - B2B site with tire industry news links

www.Truckxchange.com - E-commerce marketplace portal for OEMs, customers, dealers, suppliers

www.vendquest.com - Service enables buyers in trucking, heavy equipment and construction to compare and buy parts and services from select suppliers; 208.4.207.10/tchek/home.htm - Provides fuel and freight payment services,

e-Business solutions for transportation and logistics industries