More Than Just Products
Today, every company that wants to be successful in fleet business needs a lot more than just good products, nowadays that is just a prerequisite. Those responsible at Bandag Inc in Muscatine, Iowa, are convinced that the right service and the right network is even more important than the products. Bandag claims that it has both, and is trying to further integrate all of its 220 European dealers into a single global retreading network. In order to promote this policy, the company invited 20 of its dealers from around the UK and Ireland to visit its American headquarters.
Until recently, European Bandag dealers rarely had the opportunity to look around the franchiser’s corporate inner sanctum in Muscatine, Iowa. From here the company operates many of its unique facilities including its training centre. This £19 million centre opened just a few years ago and offers a range of educational opportunities within the ideal environment that is provided by the global Bandag family. A range of different courses are given, including classes on Bandag’s overall business model including its finance and management (divided in service, sales and production management). In addition to this theoretical instruction Bandag is making a big effort when it comes to practical ‘on-the-tyre’ training. Therefore, when the training centre in Muscatine was built, Bandag incorporated a technical learning lab offering all the latest Bandag equipment. Instruction covers the whole process from the inspection of a newly delivered truck tyre to pre-cured retreading to the final inspection of the retreaded tyre. All of this is not only simulated, but actually carried out in Bandag’s learning facility.
While taking the tour through Bandag’s Muscatine learning centre, the Irish and UK dealers learned about the different options available for repairing a damaged truck tyre before it enters the retreading process.
Using a chearograph in connection with computer-based laser technology is one way of doing this and it can even save a Bandag dealer money in the long run, according to technical trainer, Frank Ortiz.
Many faults can be identified simply by carrying out a visual inspection, but if some kind of damage has slipped through the initial inspection and the dealer starts the retreading process only to find that the tyre was not in a fit state to start with, there are consequences.
Bandag would take it very seriously if any customer purchased a retreaded tyre from one of its dealers that was anywhere beneath the company’s high quality standards. Quite apart from quality control, there is also the question of money. By this point the dealer would already have spent a fair amount of money on the retreading process that he won’t cash in on if the end result is sub-standard. This is why Bandag recommends an in-depth initial examination of any that comes into a dealership for retreading.
Bandag’s UK dealers also received substantial training also on other machines like the “Buffer 8400”, the “Repair Station” or the “OSM 5400,” otherwise known as the ‘dragster’ because of its looks. However, the heart of the technical training facility is the curing chamber, where the actual pre-cure retreading process takes place. Visitors to the centre are allowed to take a tyre right through the retreading process, from first inspection to pre-curing itself. There is also the opportunity for discussion among experts and for the exchange of ideas for running the technical processes back in the UK.
Other facilities that the Bandag dealers visited when in Muscatine, Iowa, included the R&D and Equipment divisions. R&D is responsible for tread and mould development. “The marketing department gives us the technical targets,” the R&D division’s Eugene Johnston explains when giving a tour through the facility. The next thing the engineers do is look for a way to achieve their targets. The 33 staff employed in Bandag’s equipment factory produce virtually all the machinery that a Bandag dealer needs in order to be equipped for the retreading of truck tyres.
Another highlight of the trip to the company’s headquarters was a meeting with Bandag president, chairman and CEO Martin Carver, who gave a couple of hours in order to discuss business with the UK dealers and give some strategic background information on the company’s future direction and development.
During recent years Bandag has been strongly involved in defending its leading position in the US retreading business against companies like Michelin, who got into the fleet business on a large scale during the 1980s. However, Bandag is still responsible for more than half of the truck and bus tyre retreading business in the US and about 25 per cent of the overall replacement market in this segment. “How do we compete against $20 billion organisations?” Mr Carver rhetorically asked the UK and Irish dealers. First, “we have to have benchmark products against the best in the class,” he adds. But perhaps even more importantly, Bandag has to offer services for the professional fleet operators in order to create a mutually beneficial situation. Martin Carver is convinced. He even called on the dealers “to develop service capability” and more “service-networking”. According to Bandag’s president “this is the core of what we are doing strategically”. Talking about products only, wouldn’t have the effect of opening potential customers eyes, as Bandag is competing with many new tyre manufacturers, its simply has to offer more.
Martin Carver believes in the corporate philosophy of staying away from equity dealers. “Independents are doing a better job than the equities”, he says, and “we are the advocates of you being independent.” Bandag dealers usually sign contracts for a five-year period. Although they are not granted exclusive territories by these contracts, there’s “no strong competitive environment among dealers”, one dealer told Tyres & Accessories. The same dealer agrees with Martin Carver saying: “With Bandag it is a win-win situations”. When Bandag itself takes on the big national fleets in the UK the dealer, in turn, can agree on contracts with regional or local fleets. As haulage companies are getting ever bigger and more professional, so Bandag follows suit.
Recently there has been much talk about fleet activity and fleet contracts in the UK Bandag family, says Ross Medlyn. Bandag’s area sales representative says the “business is like a snowball – it’s getting bigger and bigger.” But at the same time, Mr Medlyn is confident that “we have got the network right” and that all UK Bandag dealers are now “financially, operationally and strategically strong and capable.” This comes after Bandag “cleaned up the market place,” here Mr Carver is referring to recent changes among the members of the Bandag dealers group. In addition, he is convinced that he “is taking a strong interest in what’s going on in the UK.”
The partnership between the franchiser and the franchisees means Bandag can only grow, and as a result of Bandag’s success the dealers benefit too.
Peter De Cabooter, sales director for Europe, Middle East and Asia, is singing from the same hymn sheet: “Everything is getting more complicated.” From local fleets to pan-European customers that need local and/or European solutions at the same time. “Flexible integration” is what counts here, Mr De Cabooter adds. Dictating conditions in a volatile environment wouldn’t make much sense. That’s why Bandag is drawing a line between so-called “non-future dealers” and “future dealers” that bring value to the customers and to Bandag. The American company is expected to become much more selective in the future when it comes to choosing new partners for its network, thus hoping for an even stronger group of local franchisees. In Europe alone there are more than 220 Bandag dealers; worldwide there are in excess of 1,300.
Before the group of UK and Irish dealers went to the corporate headquarters in rural Iowa, they spent several days in Chicago, the closest big city to Muscatine, although this is still four hours away. Company representatives including Ross Medlyn, Tony Whaley (sales development manager), Peter De Cabooter and Danny Van Essche (director marketing Europe) showed them around one of the biggest cities in the US, using this as an opportunity to further improve relationships and ideas of mutual benefit.