How dealers fit into an increasingly complex supply chain

Change is one constant in the aggregate industry, from the consolidation of crushed stone, sand and gravel companies to the ever-evolving technologies that producers employ.

But one thing that largely remains the same about our industry, from one generation to the next, is that it is relationship-driven.

Producers tend to work with manufacturer and dealer partners they like and trust.

When it comes to selecting and servicing equipment, people are often the one constant connecting companies throughout the supply chain.

“When you’re looking for a machine, it’s your own personal machine concierge,” says Tim Miller, sales manager at Montabert. “You have a salesman who comes to visit you who knows your people, the way you operate, where you specialize and they’re able to provide that continuity.”

Continuity, that is, in the face of consolidation and a wave of new manufacturers entering the U.S. market.

The equipment options available to the market just a generation ago were vastly different than the ones available today. Now, with so many reworked, repositioned and newly introduced brands to wade through, producers must regularly come to grips with the lines dealers represent amid a revolving door of change.

“That’s what happened here with Lippmann getting bought up by McCloskey,” says Travis Wise, vice president of operations at Wisconsin-based Wingra Stone. “The Volvo dealer was the Lippmann dealer, but now a Cat dealer has Lippmann and McCloskey.”

That Metso just acquired McCloskey potentially complicates matters on the dealer front further. But Metso, of course, is not the only equipment manufacturer active on the merger and acquisition front.

There’s been a significant amount of consolidation on the equipment manufacturer level lately, raising questions at times about who represents what among dealers.

Sometimes, a producer’s dealer contact for a particular brand remains unchanged in the aftermath of a deal. At other times, producers find themselves dealing with brand-new dealer personnel.

After most deals, though, producers are left wondering what’s to come for an equipment brand they utilize.

“We’re renting a Kleemann tracked crusher,” Wise says. “John Deere bought the Wirtgen Group, but the Komatsu dealer is our vendor for Kleemann. I would think that might change, but you never know. The Komatsu dealer does really well with the Kleemann line.”

Consolidation’s effects

The rise of consolidation undoubtedly shaped a number of equipment manufacturers and their brands in recent years.

Not too long ago, manufacturers were very focused on one, maybe two, components of aggregate processing. But some have evolved to offer their own lines of crushing, screening, washing and/or conveying equipment.

The one-stop shop has quickly become a sought-after manufacturer model.

“Fifteen years or so ago there were far fewer manufacturers that had full lines,” says John Garrison, vice president of sales at Superior Industries. “When I worked for Simplicity, we were just the incline screen guys.”

Consider, too, that the makeup of the typical manufacturer 15 years ago probably made the dealer’s job building a line card easier.

“A lot of times you shared a dealer with a bunch of manufacturers,” Garrison says. “You were one product on their line card of 21 different products.”

Times have changed, though. The more manufacturers expand, the more their dealer networks must adapt.

Still, successfully adapting a network is easier said than done, especially when a dealer has a good sales history representing another brand or a long-running relationship with a competitor.

No multiple-line manufacturer wants a dealer to carry just a single line of theirs. Manufacturers covet exclusivity. But transitioning a full line to a dealer can be a years-long, perhaps even a decades-long, endeavor for manufacturers.

Until exclusivity can be achieved within a market, multiple-line manufacturers are trying to make the most of the complex supply chain.

“I think we’re all adjusting on the fly of trying certain things and seeing what works here and there,” says Mark Krause, managing director of North America at McLanahan Corp. “Right now none of us can afford to shut off the business that comes especially from the state of Texas.”

All of the crisscrossing lines of equipment at the dealer level may be sorted out in a matter of time.

“We have a 20-year business plan,” Garrison says. “We’re not trying to strong-arm anybody. Most manufacturers don’t want to segment a line out. It’s tricky. You don’t want to have your conveying and washing guy be one guy in California and screening with someone else. It becomes a difficult thing.”

Dealer consolidation

Another wrinkle in the supply chain is that dealers are regionalizing to position themselves to better serve producers.

“The local dealer merged to form regional partnerships,” Miller says. “They now provide better service to the customer. You get a dealer that had really good rental programs and did well with rental customers yet struggled in the retail world merging with a dealer that struggled in the rental world but did well in retail, and that creates a much larger knowledge base. That can’t be bad for anyone.”

Even as dealers regionalize, Miller stresses that they maintain the ability to serve producers locally.

“Dealers have done a great job of keeping their people as advocates of the customers,” Miller says. “We have these big conglomerations, independently-owned places that have 12 locations. They’ve done a good job of letting the salesmen maintain that personal relationship. The sales techs, the PSSRs (product support sales representative) on the road are the ones who know the customer and help the customer navigate that new system.”

While Miller recognizes the effects consolidation have on the supply chain, he argues that the supply world remains a relatively small, tight-knit community.

“Guys move around a little bit,” Miller says. “The name on the building and a guy’s title may change, whether it’s a dealer salesman or manufacturer rep. My position may change tomorrow, but I’ll still be with Montabert. The same goes with dealers, [if] they go from a PSSR to equipment sales. It’s still the same guys. They’re always willing to help out, even if their role changes.”

Sometimes, all a producer needs is someone available locally to provide a service.

“That dealer needs to know where he can find parts for a machine he has to be around,” Krause says. “I may not be the authorized dealer, but I want to be that one call that customer makes and I take care of it from there.”

Producers don’t want to spend an hour on the phone hunting around for a part. They want to make one phone call and have a problem solved. Whether that call is to an authorized dealer or simply to someone with a connection, that’s often all a producer requires.

“Your relationship with the customer is first and foremost the most important thing,” Krause says. “If I’m that dealer, I don’t care if I’m selling a guy a Superior or a Metso cone. All I want to know is who’s got my back if there’s a problem so I don’t ruin the relationship with that customer.

“As manufacturers, we have to realize that’s what matters most,” he adds. “If we’re going to really supply what those guys all want, we have to realize that we need to support that dealer and customer relationship as much as our own relationship with that customer. That means we have to swallow a little pride.”