Many companies engaged in Internet commerce are banking on the hope that there will be ongoing profitable business in the future. However, at least one manufacturer - JLG Industries - is using it to the immediate benefit of its distributors and customers.
JLG's Online Express system is the aerial work platform industry's first comprehensive Internet service program, enabling its distributors to register new equipment, handle warranty filings, and order or return parts electronically.
The system was introduced in 1995 as a stand-alone program for ordering parts and was modified in 1996 to add the capability of communicating warranty information. By mid-1998, the program was made available to all JLG distributors in North and South America, and JLG sales representatives and service personnel were also equipped with laptop computers to access the system.
The program is meeting with positive response. Already half of JLG's parts orders are transmitted over the Internet, and the company's parts business has grown by 40 percent over the past two years.
JLG began its development process by surveying its distributors to determine what services the manufacturer could best offer to develop their businesses. The distributors told JLG they needed a user-friendly software system that would work with their existing computers or with low-cost upgrades. They wanted a system that would be easy to install and that would provide them with more information about service parts and warranty claims.
JLG programmers designed a simple "point-and-click" program whose software could be installed by downloading it from the Internet. JLG designed it to be operated on a PC with a Pentium 233 processor with at least 32 MB of RAM. A printer, a 15-inch monitor to maximize viewing options and a modem that can transmit at least 28,800 bps complete the package. Mike Kendall, business systems analyst for the McConnellsburg, Pa.-based manufacturer, points out that even if a distributor needs new computer hardware to install the upgraded version of the Online Express system, he can put the package together for less than $1,000.
Once the distributor had the equipment and signed on with an Internet service provider, a phone call to Kendall at JLG was all it took to start the program within an hour.
In the early days of the system, Kendall frequently traveled to distributor locations to help them install the software and learn the program. As distributor personnel became more comfortable with computers, a telephone call and the Internet became the preferred method of getting started.
To use the Online Express system, distributors access the Internet with Internet Explorer or Netscape Navigator and type in their name and the password assigned by JLG. They are immediately connected with the main Online Express system menu.
Warranty registration of new products has become one of the most frequently used services of the system. Before any JLG lift is delivered to a customer, a pre-use inspection must be conducted by a JLG-certified mechanic. Since each aerial work platform model is different, the Online Express system's software contains a checklist for inspecting a new delivery. The form can be printed out and used to record observations made during the inspection.
To register the machine, the distributor only has to key-in the inspection information, date and machine serial number. With one click of the mouse, the warranty is activated. The whole warranty-registration process has been cut from 30 minutes to less than five.
The system has so simplified warranty claims that 90 percent of them are now filed online. Paperwork is reduced and response is much quicker. There is an immediate confirmation of all warranty claims, and they are normally processed within 24 hours of receipt.
After a warranty claim is filed, there are multiple point-and-click alternatives for a distributor to track its status by warranty type, customer number, customer location, failure code and part number. The system also checks part numbers to eliminate the chance of mistakenly entering the incorrect part.
Distributors also benefit from the Online Express parts-ordering procedures. It simplifies and speeds up the ordering process and makes it possible to track the order from the time of initial placement until the package arrives. JLG has incorporated the UPS tracking system into the program.
There is a UPS-cost-estimating program built into the system as well. For shipments weighing more than UPS limits, there is the option of choosing among 50 other freight carriers, or parts can be shipped air express for emergency repairs, while the balance of an order comes via an over-the-road carrier.
With the online system, distributors can order parts any hour of the day, 365 days a year. The order is suspended until it reaches a desired quantity or discount bracket, and then can be released. Distributors receive immediate order confirmation and can track orders just as they track warranty claims. They can also get accurate information with real-time access to JLG's inventory, price and delivery time for non-stock items.
Service parts return is as simple as parts ordering. The system provides instantaneous authorization from JLG and the capability of checking status as returns are processed.
Original equipment warranty administration and parts-ordering capability represent only the beginning of JLG's use of the Internet to provide better service to its distributors. Kendall is now developing a JLG database containing the history of each machine. Information on build date, in-service date, machine component parts and service work done by JLG-certified mechanics is being recorded for every machine produced over the past 10 years. Original owner registration and the capability of changing an owner's name if the machine is subsequently sold are part of the program. The database will provide inquiry capability by serial number, in-service date, owner history and service work performed.
Kendall says the Online Express system will soon add the JLG parts manual, giving distributors instant access to up-to-date information on machine service and repairs in a cost-effective manner. The program will be designed for JLG to update necessary information and disseminate it quickly.
Kendall predicts that eventually 90 percent of its parts will be ordered online. "But it will never be 100 percent," he says. "There will always be emergencies or field problems where there isn't instant access to an Internet connection. However, its speed, convenience, economy and accuracy are so advantageous to our distributors and their customers that they can't help but benefit from using it."
