customers, equipment, business, aftermarket, e commerce, people, caterpillar, opportunity, sell, manufacturer, product, sales, support, challenges, moving, service, inventory, shovel, distributors, data
Damon Pistulka, Kris Harrington
Damon Pistulka 00:05
All right, everyone, Welcome once again to the faces of business. I’m your host, Damon Pistulka. And with me today, I’ve got Chris Harrington from Gen alpha. Chris, welcome.
Kris Harrington 00:16
Thank you. I’m so excited to be here with you, Damon, I know we get the pleasure of being together on some other things every week, and this is gonna be really nice to just have a conversation one on one.
Damon Pistulka 00:28
Yep. Yeah, the other stuff we are, we’re actually kind of, we’re structured a bit, which is good. So today, we’re just gonna have a conversation about growing OEM manufacturing sales with e commerce. And I’m really excited that as I’ve seen some of the gen alpha stuff and, and and really, it’s, it’s, it’s an interesting and, and very practical way for OEMs to really rethink how they deliver every information all the way through their, their supply chain into their repair facilities, distribution channels down to the customer.
And I’m excited to talk about that. When we get to it. Absolutely. Yeah. So tell me, you know, the thing is, Chris, you’re you’re the co founder of Gen alpha, and I’m and and you’re, you’re in manufacturing, you’re you’re working for some of these companies. Let’s talk about your background, and really how it came to be that you’re working in in some of these larger manufacturers. And then you decided to go out and start a e commerce platform company.
Kris Harrington 01:33
Yeah, well, thanks for that. So oh, where can I start? So you know, it’s interested I was in the US Navy. So I, I always say that I think that there was something calling me way back then, because I was a machinist mate in the Navy just for, you know, a short time of my life. But it will it formed the building blocks, I’m sure of helping me understand how things mechanically work. And while I I’ve never been in service outside of the Navy, I did sell aftermarket parts, I sold large pieces of equipment. And I think just having that basic understanding of that foundation really helped me.
I always say that manufacturing kind of chose me. So in the story behind that is that I was an athlete in school, and I was a decent student, but I was a better athlete than I was a student. But I always wanted to, to impress my coaches by being a good academic as well. I think that was part that just really helped me do well in school. But there was a local manufacturing company. And I think they still do this today that they give out an award each year to all the schools in our area to one female and one male, and they call it the Athlete of the Year award.
And they base it on both your academics and their in your athletics. And they bring you in, they have a nice dinner your parents get to come in Coach K was the speaker. Oh my goodness, I was like, I played basketball. I played soccer. I ran cross country. So back then you could play three sports. I know. It’s for kids today. Yeah. Um, you know, that was really powerful for me, because that company was the same company. When I came back out of the Navy, I gave my resume. And I mentioned that I was the athlete of the year.
And now I was back from the US Navy. And they gave me a role. And I worked right there on the shop floor. So this was pre me going to get my education, I was a non law student went to Marquette University a little bit later in life. In fact, I completed my education in my 30s. But I had gotten all this life experience, you know, and, and when life was taking me to a certain point, I was realizing that I couldn’t grow any further if I didn’t have the education. So I really had this opportunity to work in many different areas within manufacturing before I went back and got my education.
So I went to school. I studied finance, so business with a major in and finance and well, I should say I originally was thinking accounting, and I looked around the room one day at all the accountants and I said no, I don’t fit here. So I guess. So my original role in a large manufacturing company that was servicing the mining industry. The name is bucyrus International, was as a financial analyst. And I’m so thankful I came into the company as a financial analyst because I was taught to use the MRP system as a tool. Yeah, not only was it my tool, but I was running Reports and data for many different areas of the business.
So I didn’t start in one specific area where I was only providing information for them, I was providing detailed reports and having to analyze them to find the little nuggets of information that they needed, so that I could help them in that area of the business. So it taught me, you know, to analyze the data in each area of the business, I started to learn very quickly what was important to those leaders in that business. So, you know, the financial team wanted something, the CEO wanted something else, the sales VP needed some other type of data, the aftermarket director was looking for another set of detailed data.
So by providing the reports, and and looking through the analysis, I really started to get this, this business Foundation, that was pretty incredible. When you start thinking about starting your, your professional career. And it was really from there, I think I had an opportunity to be useful in many different areas, that people started kind of latching on to me and say, Hey, would you like an opportunity over here? Yeah, and that was kind of my career inside bucyrus, I moved from financial analyst to a product manager where I was analyzing a product within our aftermarket business.
Then, over in Canada, they needed a national parts manager for all our entire Canadian operations. And I just raised my hand and said, I’ll go, you know, and what’s interesting is when I arrived there, because I had come from the corporate office, they thought I had the answer to everything. So now I had, I was the parts leader in Canada, but I had all these other areas of the business in Canada seeking my advice, because I had come from corporate. So I just happened to fall into this space where I just had to keep being this resource, which, which allowed me to have this incredible experience.
Damon Pistulka 07:12
And you interacted with so many different pieces of the business because of that, I’m sure,
Kris Harrington 07:17
absolutely. You know, it really is the foundation that has helped me and I promised to get to the story of how we found it jet alpha. So
Damon Pistulka 07:29
got some other questions before we get there. But this is great. This is.
Kris Harrington 07:33
So you know, I’m in Canada, I have this incredible leader in Canada, who his the way that he sells is to bring the entire team. So he would bring our Of course our sales team, but he would bring the service team, he would bring our manufacturing team and our aftermarket leader all into a presentation with the customer. So together, we were selling the value of our business to this customer, he wasn’t always alone trying to sell why you wanted to work with besides Canada, he was saying, you want to work with Bisset sires, Canada because of these people, and how they’re going to support you after you buy our equipment.
So I started learning from him how he presented the company and our services and how we could be more useful to the customers. Interesting that was around 2007 2008, where if you remember that time in history, there were a lot of challenges with supply, similar to what’s happening in manufacturing today. And what was happening for us is we were having a higher demand for our products, and our lead time kept moving out. So the only way that I could solve and help my customers on the aftermarket side was to really plan with them.
So I had to get into the planning and looking at how many hours do you have on your equipment? When are you going to need the parts so that we could back in the lead time and make sure we were ordering in advance of lead time. It wasn’t uncommon for us that periods of time to have 20 week 25 week lead times and if you’re not planning then the equipment is sitting, or it’s being used past its maintenance period, which runs the risk of other air challenges. So I really got into that that maintenance planning while I was in Canada. Um, yeah. Yeah.
Damon Pistulka 09:34
That the the picture is coming together clear. And now thank you so much for that.
Kris Harrington 09:41
Yeah. Yeah. So you know, then I i there was an opening back in the US for the director of aftermarket parts for the globe. So I stepped into that role moved back to Milwaukee, Wisconsin, which is actually where I’m from, and now I had an opportunity to overseas The entire aftermarket and implement some of the ideas and things that I saw firsthand and how we were servicing the customers in Canada. So it was a really fun and interesting experience for me because I had moved into practical.
And then when I came back to corporate and as you know, you’ve been in business a long time, there are often challenges between corporate and subsidiary, right, yeah, subsidiary saying, Hey, I’m in front of the customer all day long corporate, you don’t know what you’re doing.
You’re raising the prices, I can’t sell for that, you know, your lead times are too long? Well, we have a production challenge, you know, so I lived one experience, having come from corporate came back and got to kind of bring that practical experience into the corporate environment. And I think it created a much more well rounded team, because I was able to share the ideas, we even refocused where we weren’t just product managers for products. But now our product managers were responsible for a region of the world and helping them grow their sales.
So their performance was measured not just by the performance of the product, but also the performance of the region. So that tightly aligned us with those regions and ensure that we were supporting them in the best way possible. So after that had an opportunity to support the team in Brazil to win participates in a very large contract with the largest miner in Brazil. And really, this was so important to us that if we didn’t win this business, we would have pulled out of Brazil, because all of that they were committing all of their business to one vendor.
So we really had to put our best foot forward. I was part of that project team and, and we ended up winning the business. Brazil was a very interesting experience for me. But that got me into equipment sales, so beyond just aftermarket, but now incorporating all the wonderful things I had learned in aftermarket, which a big part of the decision process for new equipment is how is that equipment going to be serviced? And I think I, I with the support of the rest of the team was really able to speak to that. And I would credit the leadership that I had back in Canada who’s who taught me to see past a specific area. So I spent some time in Brazil.
At that time, we started looking at a CRM system, because we knew that we knew we needed a customer relationship management tool to track all of our opportunities, because one of the things that we had gotten very good at was trying to analyze our market potential and compare it to our actual sales and identify the gaps so that we could clearly focus in on the areas of opportunity. Now, we thought that a CRM system could help us get there faster, because it would be a great way to track those opportunities throughout the world. So we went and we we rolled out Microsoft Dynamics that was the CRM that we had chosen. And right after dynamics, we started thinking about e commerce.
And this was 2011, timeframe, 2009 10. And then into 1111, is when the project got pulled because we were acquired by Caterpillar, we had been moving down a process to start implementing e commerce at bucyrus. But when we were acquired by Caterpillar, they had already been down their own process. And of course, they’ve already made investments in what they were doing. So our project got tape tabled. And we all went to work for cats and got any experience and it was wonderful for me there, which I didn’t realize how much value would bring is that your Cyrus was a direct sales model.
So we we sold through subsidiaries, but we sold direct to customers. Caterpillar, of course, is a distribution model. They work through distribution. So spending two years with cat, I had an opportunity to understand how do you how do you partner with your distributors to then sell to end users? And what is the difference in that relationship? And I can understand both the good things and the you know, the challenging things when you speak directly to the customer.
Damon Pistulka 14:49
Yeah, yeah, that’s that’s something. So I’ve got a lot of questions here. So let’s just get started. So first of all, let’s go back away. So do you think being anonymous Additional student in college you got better grades because of that?
Kris Harrington 15:04
Ah, absolutely. I knew what to focus on. And I, I wasn’t going to put myself through it. If I didn’t do well, yeah, it was a deal with myself. It was all myself at that point.
Damon Pistulka 15:19
Yeah, that’s, that’s cool. That’s it. I I did my first my undergraduate degree that I got, I, you know, it was, you know, coming out of high school kind of thing. But then I went, I waited a few years and did get the graduate work. It was amazing how I magically got smarter because I actually applied myself. Yeah. And I was just curious when you were saying you’re non traditional, and it’s because it’s right, you know, you, you, you, I’m here to to get focused in and get this done.
So that’s off the topic, but it’s just some I was curious about. So when you when, you know, you had this experience, so this, this is cool. So Osiris is going direct to customer you’re doing that. And so what kind of equipment first of all you’re selling because I think of mining equipment, I think of I you know, I being around in the Midwest for I grew up in in Wyoming and Montana, the big strip mining stuff. So what were they selling?
Kris Harrington 16:14
Well, initially, we were selling shovels, drag lines and drills, so your surface mining products,
Damon Pistulka 16:20
so it’s big stuff,
Kris Harrington 16:21
the big stuff? Absolutely. And then we had several, you know, acquisitions of our our own while I was with bucyrus. Yeah, we, we acquired the tariffs mining division, so we got more surface out of that. So drills and the electric shovel. And then then we we acquire DVT, which was the underground underground business. And that’s really when we became very attractive to Caterpillar because now we had the full scope, surface and underground for these large mining companies, you know, billion. Yeah. Billions of dollar companies who, yeah, they do surface mining, they do underground mining, so we could offer something that no other company at the time can offer?
Damon Pistulka 17:09
Yeah, yeah. Well, that’s cool. Yeah, that’s, that’s cool. Because it, you know, the well, and you think of the service needs, the service needs on something that absolutely positively has to run 24. Seven, forever, basically, or have very planned and very short downtimes. Is, is much different than someone’s card, their home that if it doesn’t run, it may not be a big deal for a few days, you know, in those in those 24, seven operations like that, it makes a huge difference. Just a little bit. So,
Kris Harrington 17:43
yeah, uptime is critical, depending on the you know, the the mining operation in the order that they were that they were in an hour of lost time could be $100,000 or more. Yeah. So you didn’t want to be responsible for not getting the parts to your customer on time to get their equipment back up and running. For sure. That’s,
Damon Pistulka 18:03
that’s for sure. That’s for sure. So when you looked at that, and then the other thing that you were talking about that was very interesting is the direct model, compared to the distribution model. So you say versus selling direct to the end customer? What did you like and dislike about that model? And then we’ll talk about the distribution model and some of the challenges in that.
Kris Harrington 18:29
Yeah, I, you know, I personally love being customer facing. So I do think that when you get to spend time with the customer, and understand their problems and challenges, and be able to truly relate that back to your business and try to identify solutions. There’s something special about that. And of course, there’s a higher margin level when you’re not working distributor. So the margin, the margins are different when you do it well, and you perform well, there’s a larger opportunity for the manufacturer at that point. Yeah. I love to talk to customers. I love the customer facing aspect.
Damon Pistulka 19:16
Yeah. So the distribution model, then, what were some of the challenges that that put into into play for you?
Kris Harrington 19:26
You know, first I had to understand the caterpillar way of business. And I did come to understand that for Caterpillar, their distributors are their partners and customers as well. So you know, the difference is that they get to hold them accountable to things that typically when you’re a manufacturer, fighting to earn your customers business, you’re not holding your your customer accountable, whereas Caterpillar can hold their distributors accountable. to certain things, and that would relate to discounts and support and other things that they would get.
But I will say that the biggest challenge that we had was the, the different way in which the two companies, their product lines were and let me describe that.
So Caterpillar produces mining trucks. And, you know, they, they produce several different models, but they produce 1000s of them. So their product line was high commonality with a larger turnover, which was very easy to have inventory to support the fleet that’s operating, okay. In the bucyrus. world, I think our largest year was that we produce 27 shovels in one year, outside of that we were producing, you know, depending on the year and the demand in mining, you might have a five shovel year, a 15, shovel year, you know, a 24, shovel, you’re back to 18.
And then that 27 was high. So and you have multiple models, again, depending on the the size of equipment that’s needed. So it’s the size of the bucket. So that that the inventory, planning for bucyrus was very different. Yeah, and I’m planning on a caterpillar side. And what we had to do was teach the district distributors, how to play on with the customer in the same way that we had learned to do it through all our subsidiaries, because essentially, what we did is we divested all of our subsidiaries to the dealers, and that now they were responsible for that business.
But they were used to this Caterpillar model where you needed the inventory, and it was available, and there were trucks coming off the line always. So even if inventory was low, in one area, production was always planning for it. So there was this opportunity. Whereas on the on the bucyrus, side, it was slightly different. And I think that was a challenge for everyone. Because, you know, the customers now had to go look at the dealer for support, and the dealer was still learning that product, you know, the different product line, and understanding these challenges and ramping up with their own service personnel to be able to support this different type of equipment.
So those were the challenges, you know, keep these customers and the uptime that you referred to earlier. You know, ultimately, at the end of the day, that’s what you’re doing, you’re, you’re getting that those production units running. And there’s a big learning curve when you when you transfer that much product to a distribution network, and you no longer have that in country.
service people available.
Damon Pistulka 22:58
Yeah, that had to be quite a challenge. And it’s a completely different model when I’ve got 1000s of units compared to 10s of units. And and you can’t just throw him in Tory everywhere around the world, and you don’t know what’s gonna sell, you got to strategically plan where it goes and, and like, and like with that low volume inventory. Some it’s very, very, very expensive that you’re not going to have, you’re not going to want to spend the money to keep inventory at every location, either. That’s right. Yeah. Interesting stuff. Yeah, interesting stuff, for sure.
So all of a sudden, you’re not all of a sudden, but you’re sitting here at Caterpillar one day, and and you just go, hey, let’s go start an e commerce platform for OEM manufacturers. I mean, this talk about the accounting, he came up with this idea and and with some other friends, he co founded this thing. So let’s, let’s hear about that a little bit.
Kris Harrington 23:51
Yeah. So, you know, what we had realized is that we were doing something special to help grow the aftermarket. Back in our bucyrus days, and a lot of it was focused on solving problems for our customers. And we knew that one of the biggest challenges for customers was in planning, and it was the support between customer service and the business that that needed your parts and service support.
So the equipment operator, so we thought, Well, what if we could it and I will say that the other aspect that we saw as a challenge is that when a product left the factory, typically it was moving with a static manual that went went with it, right. So in those days, you know, for a shovel, we had three manuals that went so it was one of three two of 333 and they were very thick manuals,
Damon Pistulka 24:51
little six inch thick things that they used to put with equipment. Yeah,
Kris Harrington 24:55
yeah. So you know, these things would ship out when the equipment shipped. And immediately they were they would be outdated. because things are always changing back at the factory, obsolescence, supersession upgrades changes, those things were very difficult to communicate back to the equipment owner. So what would happen is you’d go visit the the mind, and you’d sit with that equipment owner and you’d be planning.
And they would pull out their parts book. And they have sticky notes everywhere within these parts books, because they were crossing out part numbers right in the current part number, and you might see three cross outs because that that piece of equipment has been operating for 15 years.
Yeah, over the 15 years, they’ve got this old manual, and sitting in one area of the business. So everybody asked to go into it, check the manual when they’re looking for things. So that was a big, challenging area. So they would come in, say they they needed a part quickly. And they didn’t know the part number. And sir, answering the question on what part number they needed, was a big challenge. So we initially started Gen alpha with the idea of, let’s improve that process, let’s make sure that equipment owners have access to the latest information inside the MRP related to the equipment they own.
Because every piece of equipment is usually either identified by a serial number of then a model something unique that they referenced to say this is the product I own. And then they start to describe the problem that they have it to help identify what product they need. So we thought if we could take and there was technology out there available to take bills of materials in 2d and 3d drawings and repurpose them, you know, reduce the file size, introduced some hotspotting.
So some interactive identification of the parts so people could see this visually. So basically turning that static manual into an interactive image where they can look at the 2d drawing and hotspot to it or interact with a 3d model, and just click on the parts within the 3d model, and it would tell them in the bill of material, which part that is. And the cool thing about that is that through an integration to the AARP, you could get the latest update on the changes that have occurred to that part over time. So part number four might be legacy, Part 123.
But the current Part number is four or five, six, yeah, it’s your integration, we were able to quickly show that. So that was helping people improve the identification and solve that problem. And that’s, that was the first problem that we set out to achieve. And then when once we did that we recognize Okay, we can repurpose engineering bills and materials to do 3d drawings, we can make this interactive, we said, well, we might as well have a button, we’re already integrated to the AARP, let’s give them price and availability and allow them to add it to their shopping cart.
So that’s where e commerce came in is that we had this E catalog with e commerce built around it, but it was limited e commerce at the time. And that was Those were the problems we were we were setting out to achieve, we thought we could ease the process of doing business with a manufacturer by updating this process so that customers were no longer having to go find that one manual that’s old and outdated, but rather go to a safe place online with their credentials. And just by entering their serial number or their Vin get full access to the current bill of material. So that was the original goal and design.
Damon Pistulka 29:04
One. And in doing that, too, you just made the support mobile, which is a huge deal, especially if you’re working in in construction or mining or something where you can be all over and carrying a you know, six inch thick binder with you out to a shovel that’s two miles from the maintenance place or whatever you’re doing that’s that, that that all just adds to the complexity. Whereas you know, a tablet or a laptop, in the right setting is is right there beside you to make sure that you’ve done you found the right things.
And then then if you go beyond it and think about the maintenance and other things that you can help with that same kind of online data. It’s it. It’s a very powerful portal to provide to the end customer, which ultimately, as you talked about the people around the table to help you sell that system is another person almost sitting at the table. That is a dramatic differentiator between you and someone else.
Kris Harrington 30:04
Yeah, it is the tool, right? Yeah, it’s a tool that is used by the end user. But there are so many other areas of the business benefiting from it as well. Customers can use it technical service. Yeah, well, if a technical service person is standing out at the machine, just to your point, now they can pull out their tablet, be right on that piece of equipment. And, you know, things that we’ve introduced into the product are roles based type of different roles. When you log in, you get to do different functionalities.
So a technical service person might not have the authority to buy, but they have the ability to be at the customer’s place of business on that factory floor in the mining pit, looking at the equipment, adding the things that they need to their cart, under under that customer’s account number. Yeah, very quickly turning it into a quote, that’s now said to that maintenance engineer.
Yeah. So that when they leave the inspection site, your quote with the parts that you need for the for the repair is is all in your email. Yeah, no, all that maintenance engineer has to do is maybe send it over to procurement and say, Please get these out these on order. And through this rules based login, the procurement person logs into the commerce site sees the quote, because it’s under their account, and they just convert the quote into an order. So the admin for all of that is taken away, and now leave safely have the parts that they need, and can be on their way. So
Damon Pistulka 31:39
yeah, yeah, it’s it’s very interesting when you, when you see how the origins of things, really, you know, how they come together, the origins of things and how they come together, and you’re trying to solve one problem that you’re like, Oh, we get to this point, if we just had ecommerce, that’s even better. And now you’re talking about how adding the roles and thinking of how you better serve the customer with e commerce by with a with an e commerce solution by doing this.
And and giving people certain abilities is really cool, because the the applications are really mind boggling. First of all, I said here, my brain just rolls into I mean, because you look at things you just look across the board, you go, okay, CNC machines, you look at that snowplows you look at whatever you’re building, you know, really, whatever you’re building, it’s a larger kind of OEM purchase our OEM kind of product, and it really is cool how you can drastically change the way that that after the sale support and services handled.
Kris Harrington 32:48
Yeah. And I, you know, it’s so interesting, too, because we saw for the catalogs, now you’re getting safely to the parts that you need, add them to your shopping cart, you can create an order, checkout, you’re done. And then we went further and said, Okay, now they need access to that purchase history, so that they don’t have to call customer support to know when the product is coming when it shipped their tracking information.
So you just keep chipping away at all the reasons they called your customer support, to free up the customer support from some of those tactical, yeah, routine activities so that they can be moved off and work working on maybe some of the data analysis that can come with an e commerce site, or they can be answering the more challenging problems.
Yeah, I’ll tell you the challenging problems. And this was true for us and bucyrus, too, you know, you, you would get so many emails, faxes and phone calls a day, and that you were getting to as many as you could, and the easy ones were the ones you took care of the fastest and yeah, pricing availability, create the order, create the quote, and then just on to the next one.
Well, the ones where it was challenging to truly identify the right part. And we needed somebody maybe in technical support, or an interpreter to go and look through the data and engineer, so the delays and all of that, that’s where time was missed, and customers would become very unsatisfied. So you’re able to give a better customer experience when true challenges come up. And they will after report is all about solving problems, right? It doesn’t mean all your problems go away. But it helps ease the process of doing business with you for all the routine activities for sure.
Damon Pistulka 34:40
Yeah, that’s incredible. Because I think about the you know, the system and that and when you look at the there are so many additional challenges that you’re going to be able to look at and help customers solve in these things that relate back to the kind of bucyrus stuff and when you think about operating hours or, you know, just and and if I the customer could update my operating hours in the system every so often on these kind of servers, things that you have to provide. It just there’s just so many different things you can do. It’s really cool.
Yeah, mind boggling. So let’s, let’s switch over a little bit to the, to the e commerce part of this because you know, that the e commerce came out of this. But really, as you move into e commerce there, there are things that you can do in e commerce that that you a that’s more difficult to do in traditional sales, and be there some there’s some, you know, some different advantages and challenges to e commerce.
So what are some of the things that you see that that adding the e commerce and and going from more traditional sales based support in aftermarket sales? And moving that more onto an e commerce platform? What are some of the things that you really see companies enjoying? and benefits from that?
Kris Harrington 36:07
Yeah, the first place I would start is the ability to be proactive, okay? These aftermarket departments, no question, they are bombarded with things from their customers all day long. And you could have the best intentions that you want your customer service reps to be able to talk about, you know, if they’re asking for this, see if they also need these parts.
First, many of those customer service people just don’t even know the equipment well enough to know how to make those relationships, right. So, um, and it may be there’s a new product upgrade, or you’re, you’re running a promotion in a given month, in or maybe you have some aged inventory, and you’re trying to turn your aged inventory.
These things, while you might talk to your customer service team about them, again, they’re so busy, that they rarely have an opportunity to know, does this opportunity fit with this customer in the equipment that they own? So they are they just don’t have time to be proactive in it in a selling tool like e commerce where you have the ability to do promotions, and product Rep. product recommendations like bundling upselling cross selling, you know, essentially it’s the suggestive selling based on what accompany customers looking for that is very proactive.
Yeah, because you you get to put all of that into the system and automate it. So when they are looking for the that bearing the seals, nuts and bolts that go with that bearing are also offered to the customer where again, your customer service rep has been in the role for a year never even seen that drag line? Yeah.
Damon Pistulka 38:04
They wouldn’t know. They don’t know that needs to go with it. Yeah,
Kris Harrington 38:08
that’s right. So you get to leverage the value. You know, in every business you have, I’ll say a bob, right. So Bob knows the equipment really well. He’s probably been with your company as a manufacturer for 2025, maybe 30 years, and he can rattle off skews. He doesn’t just know today’s skew. He knows what it was 10 years. Yeah, he but but you need to take all that information that Bob has, and get it somewhere so that it can be a benefit to all your customers. And we’re not all relying on Bob and his knowledge and what’s up here. So that proactive is one thing that we have found customers get to benefit from.
Damon Pistulka 38:58
And and when you talk about that, I’m sitting here thinking about that same system that helps that end customer that wants to do it by e commerce. See that also helps the human interaction if they want to call you because you’re you’re inside customer service people really to be efficient should be on a similar screen seeing similar things to to because then they become a lot smarter. It’s almost like you put AI in them or AI in them and and you just you just increase their intelligence on that piece of equipment.
And they didn’t even realize but then in the distribution model, you’ve just given that that intelligence then to the people at the distribution. That’s that’s not what they’ve learned through tribal knowledge or anything else. It’s direct from the manufacturer to the distributor. So your quality of information overall at that service level is much higher because we’re using a common system that’s that is going Okay.
Great. Or Sue, you need this part for this shovel, it’s like you need these other three parts to and by the way, you better lawyer order this kind of oil, we don’t stock it, but you’re going to need that too, you know, and you just give them all that kind of stuff. So they understand what and make them successful, just because you use that information to upgrade everyone’s knowledge throughout the chain, because you’re talking about e commerce. But this really gives the human interaction a much higher level of service as well.
Kris Harrington 40:27
Yeah, and you know that, that touches on something else that you get to do with a tool like ours, which is several different levels of personalization, right. So most of the companies that we’re working with, have a group of customers, these are the installed base owners of your equipment, so they already have accounts with you. Typically, they’re logging in with their credentials. The beautiful thing about that is you can assign the equipment they own to that account. So they’re not looking at the noise of all the units you’ve ever built and have to go search through all the you know, they’re seeing the specific, you know, if they have a fleet of equipment, that’s what they see.
And so they can safely go in and look at their equipment, they can favorite parts, they can favorite machines, they can set up shopping lists. So if whether it’s a dealer who comes back regularly, and does a stock order, maybe the stock orders for consumables in one month, and every three months, they do other types of safety stock type orders, and now they have the shopping list. So they’re not hunting and pecking and finding what they need.
Once they’ve established Hey, this is what we need from this manufacturer on a regular basis, all they have to do is push their shopping list to the shopping cart and checkout. And now it’s easy for them. Auto reorder, yeah, you’re personalizing with the ability for them to auto reorder, similar type of concept. But now the order is just going through on a regular basis. So the levels of personalization that you can do, because you’re because you’re now in an e commerce environment environment where you know, the account, you know, what equipment they own, you know, their pricing, you know, what region of the business, they’re in, all of this becomes very powerful.
And then the beauty is all the data that you’re capturing, yeah, customers are coming in using your site. So, you know, I say this all the time, but there is no greater level of data that you can get then having any commerce platform today for aftermarket equipment manufacturers, you know, we slice and dice their data at bucyrus to really get finite and look for opportunities, whether they were margin opportunities, yeah. growth, potential opportunities, even things that were in our industry that we might not manufacturer, but we’re accessories to the industry we’re in so that we could be a third party supplier for that.
Yeah. So but you know, the data that you get on the customers who are doing business, particularly, and you and I have talked about this, you know, what are they searching for an automatically buy every time they come to your site, maybe they don’t even use the search bar, because again, they’re using their shopping list.
They favorited they’re just checking out, they’re consistently buying, they’re not checking price, it’s like every time they need it, they come to you for it. Well, if that’s the case, those are opportunities to raise the price, right? And we always look for where are the areas where we can raise prices, rather than, oh, we’re gonna raise 5% across the board, and then maybe have some parts that start falling out because people that’s no longer an attractive price point. Right. The other thing you see is all of the searches that are happening on your ecommerce site, and then they’re not buying. So that search to order hit rate.
If you if you say okay, they’ve been searching in the last three months for these parts, and maybe it’s 10 are coming rising to the top, go evaluate those 10. Did you have inventory for the 10? If you didn’t, a nice first step is just try to put some inventory on the shelf and see if that creates the conversion. Right. So yeah, likely people are going to come back and search in the next three months now by having inventory. Did you get the Did you get the sale? Yeah, yeah. And so you’ve corrected inventory. That’s going to tell you that there’s probably something wrong with your price.
People are still searching for it. And they’re not buying it and you have it on hand because in our world, equipment and aftermarket parts, availability of product does sell we sell see it all the time. You know, usually, most people are not planning as much as we tell them to plan for their future maintenance. Most are reacting to failures that are happening with the equipment, and they need those products quickly. So you have them you sell them. If you don’t, you may miss out if there’s an alternative supplier that can help them.
Damon Pistulka 45:24
Yeah. Yeah, that’s, that’s so cool. Because I think that you touched on a few things here about about that. And the the one that I didn’t realize until we were talking earlier this week about it is really how this data that you’re you’re gaining from the the e commerce allows you to really understand a what your customers want, and maybe you don’t have B that your customers want, and they and you probably have opportunities for price increases, or on the other two, if it’s something that people search a lot, and they don’t ever buy, you know, and there is inventory, maybe you need to look at the we have room to to get our prices more in line if there’s other opportunities for them to buy from other places.
So it’s really interesting, but the one thing that talking today really opened my eyes on was the fact that you can really significantly upgrade your knowledge level of your entire support staff by doing this because your your service person in the field just got smarter, your customer service person just got smarter. The the distributor distributors just got smarter you repair person that that’s in a, you know, some there’s just it’s pervasive throughout the company, by the data, the way you utilize the data.
Kris Harrington 46:45
Yeah, you’re right. Um, you know, training is a big challenge. More of the baby boomers who are moving out, and there’s gonna be a great exit here as we get into 2025 through 2028. A lot of retirement of those people that carry that, I think they call them oak, oak trees or something. And Caterpillar, those were the people that had been there a long time had roots and everything else, right, yeah.
But as you you get in these generational groups who, that move around from company to company, and they, they’re going to spend a short period of time, if you can keep them there longer, and give them a great career and, and show them and keep educating them and showing them opportunities and have a digital, digital way for them to learn. That is the way in which they do learn that you’re helping them help your customers in a way that’s very different than historically what we’ve been able to do as OEMs. Yeah, yeah, the training aspect that comes up all the time, and especially today, where there’s a talent gap.
Damon Pistulka 47:55
Yeah, yeah, many
Kris Harrington 47:56
manufacturers are struggling to bring in talent. And if you don’t have tools, like equip, which is the solution we offer, then you’re missing out on a very visual way to help these people quickly understand your products and what they what they do.
Damon Pistulka 48:14
Now, listen, that and and we’ve got a few minutes here before we wrap up, and I but I want to cover this one topic, because we talked about a little bit and I didn’t realize this, from a sales standpoint, in a business standpoint of both top line and profitability. Do you see that when they implement this, these kind of systems that, that they’re able to grow their sales and the profitability or what really happens when they do that?
Because I just I’m curious about that, because this is a this is a sizable investment, no doubt. But when you could, if you’re, we talked about the training thing, and I think that’s just phenomenal what that would do to consistency of that across an organization. And that’s going to drive dollars, but what are you guys seeing as you implement a systems like this across industries that, that you’re driving top line and profitability in these these things?
Kris Harrington 49:09
Absolutely. You know, and I will say that the transition to e commerce is a transition. So yeah, manufacturers should not expect the moment they turn on their ecommerce site that everybody comes right. And that’s just not many times your customers won’t even know that it’s quite available to them yet until they need that next interaction with you. Yeah.
So if there’s time in this, what we find is that, you know, manufacturers who make this first available to their distribution network have high levels of adoption, and efficiency grows everywhere. What’s interesting about this, and it’s true for both when you sell to a distributor or you’re selling direct or you’re doing a mix channel and offering both Is that because you’re pricing is coming out of the system as standard pricing.
And there’s no mediator in between whether that’d be the salesperson or the customer service person. So there’s no accepting of the customers PEO which might have a price point that’s slightly lower than yours, but people are just accepting it and putting it in the system. When they enter those orders at the standard pricing that you have, even if it’s their, their pricing, typically, the online orders have a higher margin than the offline orders.
So that is a level of profitability that we see right there. And you should expect that. Additionally, because of some of these things that we talked about, like bundling product recommendations and other things, there’s new ways to increase that average order value. So of course, every manufacturer is trying to find new ways to benefit from existing clients. And e commerce can certainly help you with that. So your average order value is going up, because you’re offering additional products, think about even that 3d drawing.
So I’m safely in the assembly, I know I need the motor, and maybe the gasket around the connection to where that motor fits is a little flimsy and should be shot. Well, because I’m in that 3d drawing, I see the gasket number right there, too. So I’m not just gonna buy the motor by the the the bolts and nuts and all by the gasket. And I’ll make some changes so that I’ve I fully can put it back together with some new components around it. Now before if they’re just like, Oh, my motor, you know, it’s Friday, or get on the so they are they have the ability to add those additional items.
So average order value goes up, order accuracy goes up. Because customers are guessing customer service departments aren’t guessing the integration to the eirp with the current part number, you’re having fewer returns. Because of that, the accuracy goes up as well. So those are some very key profitability metrics that we see as more and more business transitions to e commerce. And what you find is that when you start seeing these results as a business, is you say, Whoa, whoa, if we could get people more over to e commerce than going through these other channels, and reserve those channels for other, more critical activity or complex activities.
Yeah, it’s better for our business, and you start getting momentum, and people who are behind the ecommerce initiative, because e commerce is still something new for many manufacturers. Yeah. And some people on the sales team might view it as a threat, when in reality, it’s an opportunity for everyone and should be considered an opportunity for the sales force as well making their job much easier, and giving them better opportunities to grow their own commissions as well.
Damon Pistulka 53:17
Yeah, yeah. Yeah, that’s something because I, you know, when we, when we started thinking about this conversation, and I was preparing for it, I was thinking about, you know, yes, it’s nice to add the OEMs and, you know, see its ease for customer orders or whatever. But really, when you think about the, the way it can increase the intelligence of everyone that’s involved with the system. I mean, that’s, that’s massive.
I think that’s massive. And then when you talk about the ways that you can, you can increase the order size and and the and, and really, the support to the customer, so they’re getting everything they need. They’re don’t have to, you know, come back or or do the wrong thing. It’s really pretty incredible. And speed. Yeah,
Kris Harrington 54:03
yeah, you know, we’re also we expect everything now, right? It’s just the way that we are. So if you can free up even just a portion of your customer service department today, and allow this self service that gets I love to talk about e commerce systems as self service portals where customers can go to get their information. They’re not just ordering, it’s not just a place for transactions, they’re getting all that information around there equipment, any maintenance videos, any support that any MSDS any operator’s manuals, all of that is safely there.
All my tracking information when my orders are coming copies of my invoices paying my invoice, right think about the level of calls and emails are coming in. To do that, if the day when you can’t find enough good people to staff and customers because of supply chain issues are are more frantic about When are my thing is coming and they want to know things. If you had this portal for them to go and then look at this detail, they wouldn’t need to bombard your teams and they couldn’t be focused on those supply chain issues.
Damon Pistulka 55:12
Yeah. So much opportunity here. It’s it’s super interesting when you start to look at it and how OEMs can really grow their grow their aftermarket sales with e commerce, and, and I talked about sales, but grow and grow the, you know, the effectiveness of their of their support, and really enhance the brand, by giving people the self serve option better service and the way they can, because the data gets in the hands of the people that need it.
Kris Harrington 55:42
That’s right. So for these OEMs, this becomes a big differentiator, when the customer is thinking about that equipment has reached its useful life, and now they need to replace they need a new fleet of equipment, right?
Are they going to go to the next guy are they going to come back to you because your service, your support, the tools that you have, after you own the equipment are so valuable to them, then they’re not going to take the risk of moving to another alternative that coming back to you to give you the business again. So now you’re not just winning on the aftermarket, you’re also keeping that oay business and that next new piece of equipment. So that’s the key behind all of this. Ultimately, it’s not just an aftermarket sale, it’s an odd sale to
Damon Pistulka 56:29
get to get the new product sales and then get the aftermarket right after it and keep the cycle gone. So Chris has spread so awesome to talk. I mean, we could spend another hour here easier more, because it just it it really is amazing. The the where this came from how you you guys saw a need and then stepped out and built this, this platform to be able to support it. So if people want to learn more about Gen alpha, learn about what things are going on, what’s the what’s the best way to reach out?
Kris Harrington 57:04
Well, please go to Gen alpha calm, that’s GE na lp PH a.com we have a ton of resources out there. Not only do we want to sell our e commerce platform and help manufacturers grow, but we we are constantly putting out content to help these companies in all areas of aftermarket that really is our focus. So we’ve got a newsletter. If you want to sign up for our newsletter, you can do that. You can also find us on LinkedIn at General for technology’s
Damon Pistulka 57:34
Awesome, awesome. Well, Chris, thanks so much for being here today. And thanks everyone for listening again, this face is a business with Chris Harrington from Gen alpha. Thanks so much. I appreciate you stopping by and sharing your knowledge on growing OEM manufacturing sales with e commerce. And I hope everyone listening enjoyed it. Thanks for being here. You bet you have a great evening, everyone.