Yanina Yakovleva, Ferronordic presesntation at Aftermarket 2012
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"STRUCTURING AND RUNING A SUCCESFUL AFTERMARKET IN RUSSIA" Yanina Yakovleva, Ferronordic presenation ar Aftermarket Business Platform 2012. More information www.aftermarketeurope.com
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Yanina Yakovleva, Ferronordic presesntation at Aftermarket 2012
- 1. STRUCTURING AND RUNING A SUCCESFUL AFTERMARKET IN RUSSIA ЭКСКЛЮЗИВНЫЙ ДИЛЕР VOLVO CONSTRUCTION EQUIPMENT YANINA YAKOVLEVA OCTOBER 25TH 2012
- 2. Agenda I.Ferronordic Machines – introducing the company II.Challenges of working on the Russian market III.Structuring and running a successful aftermarket in Russia
- 3. I. Ferronordic Machines •The biggest dealer of Volvo CE machinery in terms of territory in the world •Selling and servicing Volvo CE machines on the Russian market since 2010 •Successor of the Volvo CE owned dealership in Russia
- 4. Khabarovsk Krasnoyarsk Ekaterinburg St .Petersburg Moscow Krasnodar Murmansk Petrozavodsk Arkhangelsk N.Novgorod 4 Number of FNM outlets is planned to grow substantially Network development map – August 2012 Vladivostok Kazan’ Vologda Voronezh Chelyabinsk Tver’ Perm’ Norilsk Novosibirsk Stavropol Surgut Rostov na Donu Sovetski Velsk (62) FNM year to date 2012 (9) SSK locations V.Novgorod Tyumen Sochi Tula Yaroslavl Volsk Saratov Saransk Kaliningrad Pitkyaranta Lipetsk Ryazan Belgorod Smolensk Sikhtifkar Koriazhma Buinaksk Pskov Armavir Currently: 62 2015: ~100 Ufa Novokuznetsk Bratsk Irkutsk Chita Abakan Kemerovo Neryungri Novy Urengoy Uhta Samara Kaluga Volgograd Yakutsk Blagoveshensk Satka Cherepovets Cheboksary Vladimir Penza
- 5. Ferronordic Machines business •New & used equipment •Trade-in & rental •Additional equipment, attachments Ferronordic machines sales •Spare parts •Service sales •Soft products Ferronordic machines services
- 10. Skid Steer Loaders VOLVO
- 12. Motor graders
- 14. Pipe layers
- 15. Ferronordic Machines Results since 2010
- 16. Number of employees 165 562 78 200 0 100 200 300 400 500 600 700 800 900 2010 2012 Mechanics Employees
- 17. Number of locations and service vans 14 62 78 151 0 20 40 60 80 100 120 140 160 2010 2012 Locations Service vans
- 18. Machine population growth 5200 7500 0 1000 2000 3000 4000 5000 6000 7000 8000 2010 2012 Number of units Years Machine population
- 19. Parts stock and turnover 12 57 3 13 0 10 20 30 40 50 60 2010 2012 Million, EUR Years Parts stock Parts turnover
- 20. II. Challenges of working on the Russian market
- 21. What do we need to know about Russian market?
- 22. Territory and Infrastructure •Country’s vast territory •Infrastructural issues
- 23. Business practices •Accounting and business practices are cumbersome and requiring a lot of paperwork •Be prepared to have more headcount and more working capital
- 24. People •Not enough professionally trained people •People are passionate about what they do and are fast learners •Inefficient management styles are widely spread
- 25. More points to remember •Instability •Battlefield for big and small players from all over the world •Opportunities to grasp market share •Service culture being formed •Traditions were continuously broken
- 26. Russia is not as scary as it may seem
- 27. III. Structuring and running a successful aftermarket in Russia
- 28. What is a successful aftermarket? 1.Profitable 2.Sustainable 3.Efficient 4.Flexible
- 29. 1. Profitable aftermarket •Commercial aftermarket not technical support •The right products for the right customers at the right price at the right time •Stable revenue and profit
- 30. 1.2. Technical vs. commercial Technical aftermarket Commercial aftermarket Customer support Profit generating business unit Can be done from hub Should be closer to customer Limited number of people A developed organization is needed No sales skills required Strong sales skills and commercial process within the team Technical knowledge and expertise Commercialized service products
- 31. 1.3.Commercial process in aftermarket •Aftermarket sales representatives- our sales force •All other employees are involved in the commercial process •Customer loyalty programs •Marketing campaigns •Customer events in aftermarket •Soft products to meet the customer needs
- 32. 1.4. Sales force in aftermarket •Aftermarket sales representatives (ASR)– key person in the process •ASR has a number of tools and standard product offers •ASR is a guide and coach to all other roles in the region as far as commercial aftermarket is concerned
- 33. 1.5. Products and tools •Customer loyalty programs •Marketing campaigns •Customer events in aftermarket •Soft products to meet the customer needs
- 34. 1.6. Customer loyalty program The program allowed us to achieve the following results: •Create transparent customer discounts based on purchase volumes •Promote our own service sales •Effectively launch service contracts •Build stronger partner relations with customers
- 35. Date
- 36. Date
- 37. Customer partnership status - additional incentive for customers At the end of each we evaluate sales per customer vs potential and acknowledge the best customers with one of the following statuses According to their volumes: •Level 4 Customer •Level 3 Partnership status Silver •Level 2 Partnership status Gold •Level 1 Partnership status Platinum Benefits for customers with status will include : •Discounts for new machines purchase •Discounts for new attachments •Discounts for trainings •Care Track installation benefits •Participation in Volvo Construction Club •Status is valid for 1 year
- 38. Capital 1.7. Aftermarket marketing campaigns
- 39. 1.8. Listen to your customer •Not only when you are selling something •Organize aftermarket customer events •Engage customers in soft product development •Build traditions and framework for continuous communication
- 40. 1.9. Aftermarket customer events
- 41. 1.10. Common culture Ferronordic Machines Customer
- 42. 1.11.Know your customers •Profiling •Business cycles and buying patterns •Decision making •Business models
- 43. 1.12. Contribute to success of your customers •Help your customers achieve their business goals •Minimize machine downtime •Help them come up with new technology •Customer expertise development
- 44. 1.13.Customer operator training •Custom made operator trainings •Launch of the ECO operator program •Simulators
- 45. 1.14.Caretrack Volvo telemetric system Allows tracking of machine condition Maintenance and repair planning Resource planning Easier management of maintenance contracts Population control Spare parts stock planning
- 46. 2.Sustainable aftermarket •Organizational structure •People •Dealer infrastructure development
- 47. 2.1.Structure your organization •Uniform organizational chart across regions •Clear job descriptions and roles •Clear motivation (bonus) system linked to job description and role •Clear KPI’s in line with bonus system •Responsibility and authority balance
- 48. 2.2. Standardized organizational structure Region Location Location Location
- 49. 2.3. Invest in your people •Schools for mechanics •Train the trainer programs •Training center •Mentors and personal development plans •Succession planning
- 50. 2.4. Training center Each mechanic on average receives up to 200 hours of training per year
- 51. Trained mechanics are the best asset of a service company
- 52. 2.5.Invest into your infrastructure •Parts warehouses = availability •Service vans and tools •Workshops •Mobile service points •Customer site set ups
- 56. 3.Efficient aftermarket •Tracking performance against KPI and communicating it to the team •Resource planning based on population •IT systems (dealer management system, stock replenishment system, CRM, ordering systems, online portal)
- 57. 3.1.Key Performance Indicators Labor sales •Sales Volume •Margin •Hours per mechanic •Average price of 1 hour •Utilization ratio •Efficiency ratio •Productivity ratio •Absorption rate •Machines per mechanic Parts •Parts sales volume •Margin •Parts through workshop and over the counter •Stock value •Stock turn per year •Product mix by groups •Backorder ratio •Availability index
- 58. 3.2. New Tools in efficiency tracking •Labor utilization tracking module, 1C based
- 59. 4.Flexible aftermarket •Uniform approach to all regions •Different location modeling options (from regional hub to home based mechanics) •Mobile service •7 days a week service 2 shifts •24 hours emergency call service •Customer location set ups available
- 60. Different set ups Picture of rented place Picture of container set-up Purpose built facility 1-2 year
- 61. 10 lessons learned by us 1.Go for commercial approach 2.Structure your business model and organization 3.Invest in people (mechanics, line managers) 4.Know your customers and listen to them 5.Contribute to success of your customers 6.Invest into infrastructure 7.Be “around the corner” 8.Engage people 9.Be consistent and plan long term 10.Enjoy what you do!
- 62. We enjoy what we do!
- 63. And come we up with creative solutions!