At the core of
Babcock is a household name in the southern African equipment industry. It manages the exclusive distribution and support of leading international brands in southern Africa, namely Volvo Construction Equipment and its two subsidiaries,
The success of the business has over the years hinged on its tremendous aftermarket regime. That Volvo CE, Babcock’s major principal, is a global force in the yellow metal equipment industry is no point of contention, but its major success in southern Africa has largely been buoyed by the excellent support service from Babcock.
Guiding the company’s aftermarket philosophy is Babcock’s understanding that in today’s operating conditions, equipment owners expect suppliers to meet their needs and respond to their problems effectively and swiftly. This is most certainly the case when it comes to big-ticket, mission-critical assets such as mining and quarrying equipment.
One man who has an unobstructed understanding of this is David Vaughan, who – some two and half years ago – was entrusted to lead Babcock’s Equipment division. Besides working for original equipment manufacturers (OEMs) and equipment suppliers during his 40-year career in the yellow metal industry, Vaughan also spent close to two years on the “other side of the fence” during his stint with a plant hire company.
Working on the end-user side of the equipment value chain has given him a clear understanding of the significance of flawless aftermarket support from an equipment supplier. Consequently, in his new role, he doesn’t only see things from a supplier point of view, but from a customer perspective as well.
Prior to his appointment as managing director, Vaughan had been the sales director of Babcock’s Equipment division for over five years. He joined the company back in February 2005 as general manager of the Northern Region, which encompasses Johannesburg (Gauteng), Rustenburg (North West Province), Middelburg and Nelspruit (Mpumalanga), as well as Steelpoort (Limpopo Province) in South Africa.
Vaughan started his earthmoving equipment career way back in 1979 with one of the leading OEMs, which he joined as a trainee and worked in all the different arms of the business, ranging from workshops and warehousing to parts and field service. After two years of training, he became trainee product support representative, before assuming a capital equipment salesman role. From here, he never looked back – he went through all the roles, from general manager to sales director and eventually managing director.
When he took over the managing directorship role at Babcock, he had a single goal in mind – and that was to further boost the company’s customer service mission. “Over the past two and half years, we made a strategic decision to build the business on the back of our aftermarket service strategy. We have, during my tenure, worked hard to elevate our aftermarket offering,” he says.
To this end, Vaughan’s first major task as MD was to lead the restructuring of the business. “We had to split the business into four major regions – Northern, Southern, Eastern and Export. Each region is led by its own regional manager. The goal is to offer our customers quicker turnaround times on service and parts. The new structure has ensured quick decision-making through direct lines of communication,” says Vaughan.
Another key intervention was to restructure the entire parts department. Coupled with this was the complete redesign of the service and maintenance contract offering to offer tailor-made contracts suited to each customer’s operating and economic profile. “We have also boosted the headcount in the aftermarket department, not just from a technical point of view, but also the different tiers of management to ensure optimal running of this crucial arm of the business,” says Vaughan.
A major focus on training has also been part of the aftermarket revolution. The workforce has been trained locally and overseas. Local training is conducted at Babcock’s own training centre. “Finding skills we need has become one of the biggest challenges for the capital equipment supply chain and end users alike. The situation will only get more acute as technology evolves and competition for talent tightens. Given the dynamics, it is vital for every forward-thinking company to have a system in place to develop the skills it needs, now and well into the future,” reasons Vaughan.
To be able to execute a proper aftermarket strategy, a fundamental requisite is to have the infrastructure that allows the supplier to promptly respond to any service needs. Babcock has done a lot in recent years in this regard. A ZAR100 million (about £5.4 million) investment in a contemporary facility in Middelburg, Mpumalanga, (inaugurated in 2016) took Babcock’s service to the next level in the coal-mining region.
This was followed by several investments in facility upgrades around South Africa and neighbouring countries. “A case in point is the recent move to a bigger premises in Richards Bay, South Africa, as well as in Namibia. We have also done a lot of work together with our principals, especially Volvo CE, in terms of parts pricing and availability,” adds Vaughan.
Results of these initiatives are there for all to see. Winning the 2017/18 EMEA Best Dealer Volvo Services award was a true indicator of Babcock’s triumphant aftermarket strategy. “The measuring tool of the award is an independent survey conducted by a Volvo-appointed company that gathers feedback from customers across Europe, Middle East and Africa on the aftermarket performances of their respective dealers,” says Vaughan.
“Babcock consistently achieved higher scores than its competitors in many aspects of the survey. In essence, according to our customers, we are ticking all the right boxes when it comes to the provision of aftermarket service. The award is particularly encouraging for the whole team as it recognises all the initiatives we have put in place to be able to support our customers throughout our area of jurisdiction,” adds Vaughan.
Proof of the aftermarket strategy’s success is the growth of the company’s service/maintenance contracts portfolio. “Having started with a single customer some two years back, we now have nearly 1,000 machines on service/maintenance contracts. This forms a huge part of our service turnover,” says Vaughan.
Overall, the business has done very well in the past two and half years. Sales of articulated haulers have been remarkable, especially in the mining and quarrying industries. In southern Africa, these industries tend to favour high-production type of equipment because of the large production capacities. “As a result, the bigger ranges – [articulated dump trucks] ADTs, excavators and wheeled loaders – are our market drivers,” he says.
The Volvo A30 has the largest population in the quarrying industry. However, some of the larger quarries have recently shifted to the A40, prompting major demand for the model. “ADT sales have been phenomenal. For the first time ever, in 2018 we sold more articulated haulers than any other supplier in South Africa. In our five-model Volvo range – A30, A35, A40, A45 and A60H – the A40 is currently the biggest seller. To give an idea, it enjoys over 45% market share in the country and over 95% in the Middelburg area,” says Vaughan.
The used equipment division has also enjoyed remarkable success in recent years, especially the used parts and component offering of the business, which was established some two years ago. Depending on condition and age, trade-in machines are either sold, refurbished or stripped for used parts and components. The parts and components are either stocked as they are or refurbished and sold back into the market.
Looking to the future, Vaughan is hopeful that the construction industry, which has been in dire straits in the past few years, will start recovering this year, especially after the May elections in South Africa. He believes the country’s infrastructure, especially roads, needs some immediate attention. Coupled with the recovery of the construction sector will be the resurgence of the quarrying industry, which heavily relies on construction projects.
In conclusion, Vaughan reiterates that aftermarket will remain a major focus area for Babcock. “I am very customer-oriented and committed to building long-term relationships with our customers who trust us to deliver.”
