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Rush Enterprises Overcomes Supply Chain and Inflation Challenges with Data Science

“There is no magic wand to digest all of the information that you have. The only way to actually have true control is by having data-driven platforms.”

So says Gonzalo Benitez, pricing and data analytics manager at Rush Enterprises, on our latest episode. The heavy-duty truck parts industry has not been spared from the economic upheaval of the last two-plus years. Supply chain issues have caused Gonzalo’s team to work creatively to source alternative products, while inflation has led to sometimes more than triple the number of supplier cost increases per year.

Gonzalo spoke with us about how data-driven tools have been critical to executing cost pass-through and enabling transparent communication with Rush Enterprises' customers.

Read the article mentioned in the episode: Navigating the Broken Supply Chain

Featuring
Gonzalo Benitez

Gonzalo Benitez

Once you have a portfolio that's over 5,000 parts and you have thousands of different customers, the matrix starts getting so big that the benefits of having the tools that are available through this type of software really give you results. The ROI is fast, you will be proactive instead of reactive, you can be driving your business instead of reacting to your competitors, and you will be able to implement your strategies faster.
- Gonzalo Benitez, Rush Enterprises

Episode Transcript

Gonzalo Benitez: When the price changes, we’re letting them know in advance and being transparent about that, and that has helped increase our business with some of our customers by just providing additional data before they ask for it. The way that the supply chain and some of the products and how they have been behaving, the raw materials that they have been behaving. Just being able to communicate with your customers faster and on a very transparent way, it's going to be really important.

Lindsay Duran: Welcome to B2B Reimagined. My name is Lindsay Duran, and I'll be your host for this episode. I'm joined today by Gonzalo Benitez, pricing and data analytics manager at Rush Enterprises. Welcome to the podcast, Gonzalo.

Gonzalo Benitez: Thank you, Lindsay. Thanks for having me. I'm happy to share a little time with you today.

Lindsay Duran: Excellent. Well, we're really excited to have you here Gonzalo, before we get into your role at Rush Enterprises and how your team is dealing with some of the supply chain and other challenges that so many companies are facing right now, I'd like to let our audience learn a bit more about you.

Lindsay Duran: Tell us a little bit about your role at Rush Enterprises and what you're responsible for.

Gonzalo Benitez: So I've been with Rush Enterprises for five years, and I am the data and pricing manager for the aftermarket parts sales department.

So what we do is we have over 125 locations in 26 states in North America. That includes Canada. So what we do is we make sure that all of the parts that we sell through our retail stores have the right price for each and every of the markets. So we deal with things with municipalities. With contract pricing, with promotions, we help our procurement department to find alternative sources or alternative products to make sure that we can go to market competitive.

Lindsay Duran: Excellent. [00:04:00] I'm going to come back to Rush Enterprises and some of the challenges you're facing here in just a moment, but before I do that, tell us, how did you get into pricing and sales? You came from an industrial engineering background. Talk to me about how that evolved.

Gonzalo Benitez: Yeah. Well, I started in the heavy-duty industry as a survey manager.

So I spent a couple of years doing surveys, warranty jobs, and all related with trucks. I start founding the commercial part of the sales part was way more interesting. So I switched to sales. And I had the opportunity to be the sales manager for a heavy duty company for Latin America. So that gave me the opportunity to travel to over 25 different countries and develop different market strategy over there.

And basically when I started, what I found was that pricing was not only based on cost [00:05:00] and that there's a lot of additional things that go into different markets and perception. And even the brand weight on each country's different. So that was something that started just catching my interest on, “Hey, how can we do things different?”

And then I evolved into the procurement part and purchasing and with all of the different backgrounds, when I started with Rush, the procurement team, that there was a transition in the company to go to a different, more data-driven strategy. And I think that part of what I was doing the day before came just together.

And it was a great opportunity for me to take the lead on that project and just start doing writing as my main role.

Lindsay Duran: It sounds like getting to travel all around Latin America was probably a very, very good experience. I'm sure you learned a lot. Tell us more about what it was like working in sales, across all the different countries in Latin America.[00:06:00]

Gonzalo Benitez: Well, the first time that I started traveling outside Mexico was to our, neighbor country, but it was Guatemala, was in the south. And I thought that, “Hey, this is very easy, we speak the language. We can go there. We can apply the same things that we're doing in Mexico in a different country.” I know that I went there, start visiting all of the different dealerships and I basically grabbed my pricing flyers and just applied the exchange rate, apply some of the fees or anything and say, “Hey, here's what you can do. Here's what it should cost you. We should go to market like this.” So I start talking to everyone. And when I come back, I thought that I had done a great job. And we got a phone call from the general manager of one of the main heavy duty truck manufacturers that they wanted to talk to me personally, because I had disrupted their market strategies for overseas. So that's when I [00:07:00] realized how sensitive is to talk about some of this, even though it's the same language, it's the same product. There's a lot more that goes behind some of these different companies that just make price very sensitive because once you drop prices, it's really hard to make them come back.

So that was, I thought that it was going to be my last day and my last expense report, but we were able to learn from it. And after that were five years of just being able to do different things in all those different countries, but that was the first experience that I had dealing with sales and pricing in a different country.

Lindsay Duran: Well the industry Rush Enterprises is in, truck parts and heavy duty trucks. I'm sure it has gone through quite a bit of turmoil this year and last year. What are some of the biggest challenges that you're facing at the moment?

Gonzalo Benitez: One of the biggest challenge that, that we have right now is the supply chain.

Being able to get [00:08:00] all of the different orders filled. And making sure that we can get products for our customers. There's a lot of supply chain issues in the oil industry. There's a lot of supply issues in the shapes and sensors component that we have been needing to go to alternative suppliers, alternative sources to be able to get on top of, of this inflation and yield costs that go to the roof.

So just being able to, at the same time, being able to manage our inventory in terms of pricing it correctly and making sure that we can communicate with our customers, everything that is happening so that we can keep the trucks running. So those are the biggest challenges that we have right now.

Lindsay Duran: In that vein, how do you go about determining the right alternate parts and then smooth out the pricing so that you can keep pricing fair and market aligned and honor any [00:09:00] contractual agreements that you have with your customers?

Gonzalo Benitez: Well, part of what we need to do is make sure that we are partnering with the right suppliers. That they can provide parts that not only will fit, but also will perform so that we can make sure that once we install that component, the trucks stay on the road. So validating the suppliers and making sure we are offering like to like products, not only in between quality and you know, that we can support those products going forward in case that some of these customers decide to switch.

Developing the alternate, but at the same time, developing all the supply chain, the back end to make sure that we are going to be able to provide the same level of service for those customers indicate that we need to.

Lindsay Duran: You guys sit at such an interesting intersection of the economy in that you're trying to keep trucks on the road in the face of supply issues yet the more trucks that are not on the road, the more supply issues [00:10:00] we're going to have. And so you guys are really trying to keep the economy running if you will, in that regard. And you mentioned talking, you know, making sure that you have the right suppliers in place. I know that in previous years, cost changes from those suppliers were maybe somewhat infrequent. What in normal times, so several years ago, did you see, in terms of the frequency of supplier cost changes and how has that changed in 2021 and 2022?

Gonzalo Benitez: So, uh, in the past, usually our biggest suppliers had two windows for cost changes, July and January. Some of them only once a year. So we were seeing cost our contract with them, allowed us to have 90 days notice, two big cost changes for most of the parts and then just minor adjustments.

But we're originally seeing one or two cost changes with at least 90 day notice. And [00:11:00] now what we're seeing is four, five different cost changes or more. And sometimes they just let you know, with few dates in advance, five days, even just mid month cost changes. That was like totally unprecedented for some of our partners that we have to do that.

And also based on that, the way that we went to our customers was very similar. We went with our customers and offered them long term rebates or contracts and we have to be working with them, letting them know and rewarding those contracts and rewarding those relationships so that we can keep providing the same service.

And at the same time, being able to pass then all of those cost changes that have been coming to us in the more adequate way with a lot of transparency.

Lindsay Duran: From your seat, it's the pricing and data analytics manager. I imagine the situation. Led to some sleepless nights and certainly many tough decisions. [00:12:00] How do you go about executing cost pass through price updates and communicating those out to sales reps and customers?

Gonzalo Benitez: So in the past, yeah, you mentioned there were quite a lot of nights that we were just trying to digest it, the information. And in the past couple of months, we have been able to develop tools to process all of those cost changes and have the, all of the analytic that same day, so that we can notify our sales reps and notify our major customers if we are going to see any significant cost change that we cannot account for faster. So just developing that data crunching, our portfolio of parts, it's over 200,000 parts. We have over half a million unique customers. So with all that amount of data, it's millions of records for model on [00:13:00] transactions.

So we have to develop faster way to digesting all of the information that we were getting and to be able to provide our customers with transparency of this is what's happening. This is what is gonna happen starting next month or trying to give them 30 days or sticking with our contracts, take days noted as fast as we can so that we can make sure that we can keep providing them with that level of service that they're expecting without us having to be just being the buffer between the supplier and the end user.

Lindsay Duran: And I would imagine that our listeners right now are thinking, “Gosh, could they possibly be doing all of this in spreadsheets and, and Excel?” And the answer to that is certainly no. So how do you think that your world might be different if you didn't have advanced pricing tools and such a strong handle on your data?

Gonzalo Benitez: Well, probably that's why I stopped being an accountant because we [00:14:00] will be relying on our accountant, make sure that they are telling us that we are not being able to pay our bills. So yeah, basically without all of the advanced tools that we have right now, we wouldn't be able to understand what was driving all the changes on the business, as I mentioned.

So many that there's Excel and other spreadsheet, software, or tools that, that you have, there's no way that you can do all of those calculations fast and easy. So we have to rely on technology and on partners like Zilliant to make sure that we can digest that data on a daily basis and that we can get daily reports on what's happening to our entire portfolio, to our entire inventory and get the highlights of what's happening and receive those every day to make sure that we can implement them. So without those type of big data analytics, we should be relying on just at the end of the month, working with our [00:15:00] accounting team. How much did we pay for this and where’s the balance difference and just be in a reactive mode, and then we wouldn't be able to communicate efficiently to our customers and it will make us do some drastic positions that might affect our relationships or that we would not be able to keep pace with what's happening with the industry right now.

Lindsay Duran: I think you make such a great point about the importance of being proactive in the way that you're pricing and how that actually has a positive impact on the customer experience overall. And at the end of the day, that actually improves your relationships with your customers. I think that's such a great point. What advice would you have Gonzalo for companies who are thinking about buying pricing software, embarking on a pricing project, but have yet to take the plunge or make the leap to go do that?

Gonzalo Benitez: Sure. So what I will tell them is [00:16:00] there's no magic wand to digest all of the information that, that you have, that the only way to actually have true control is by having data-driven platforms that can help you do the analysis, because you can do analysis on 1, 2, 3, 10, probably a hundred parts. But once you have a portfolio that it's over 10, 5,000 parts, and you have thousands of different customers, the matrix is it starts getting so big that the benefits of having the tools that are available through this type of software, they really give you results.

But the ROI it's, it's really fast then, and you will be proactive instead of reactive, you can be driving your business instead of reacting to your competitors, and you will be able to implement your strategies faster. And at the [00:17:00] same time, you're going to be able to communicate better to your sales force and let them know that what's happening through the entire company, instead of being reactive of what others are hearing, the market like, “Hey, we hear that this went up. When are we going to go up or when is this change going to be implemented?” Without the tools of the data analytics it's I think it's quite impossible to be able to manage your business.

Lindsay Duran: I think that's a great point, especially with the speed of which things are changing and have been changing over the course of the past few years. Before we wrap up for the day, do you have any advice for companies in your industry or in the broader B2B market about how to think about success and how to best succeed in this tough environment that we're all facing at the moment?

Gonzalo Benitez: When you’re talking about B2B, one of the challenges that everybody has is you have to rely on long term contract that you have with your different customers quotes, and [00:18:00] you don't implement the changes as fast as you would do in a business to consumer model.

So part of what we, I think it's really important for B2B is to be able to provide a lot of transparency of what, what is happening and communicating to, to the customers, what it's going to be changing, what it's working for us, that part of like, “Hey, we are letting you know that this is going to happen.”

And being able to provide them with even faster data analytics on their company, letting them know, “Hey, this is what is happening. This is what will change. This is what you're going to be paying. So don't wait for your accounting to let you know when the price changes. We’re letting them know in advance and being transparent about that.

And that has helped us increase our business with some of our customers by just providing additional data before they ask for it. So that, that transparency helps them [00:19:00] move the business forward as well, because they understand they can do changes on their end, or you can negotiate with them with more, more time.

But yeah, right now, the fast pace and the way that the supply chain and some of the products and how they have been behaving, the raw material that they have been behaving. Just being able to communicate with your customers faster and in a very transparent way, it's going to be really important.

Lindsay Duran: I think that's a fantastic takeaway Gonzalo. I'd like to thank you for joining us for this episode of the podcast.

Gonzalo Benitez: No, thank you for having me.

Lindsay Duran: I'd like to thank each of our podcast listeners for being with us. Be sure to check out the link in the show notes to a recent Zilliant article on combatting supply chain issues with a product alternative strategy.

If you're interested in learning more, please reach out to us on zilliant.com. Please also take a moment to rate and review the show as it helps us to continue to put out great free content. Thanks for [00:20:00] joining us. And we hope to see you on the next episode of B2B Reimagined.

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