Sept. 14, 2012—State Farm Insurance is planning to expand its Web-based parts procurement pilot through PartsTrader in Chicago, Dick Luedke, media relations specialist for State Farm, said Friday.
Luedke said State Farm’s Select Service shops in Chicago will begin using the program in December. A specific date has not yet been set.
State Farm selected Chicago as the next location for its pilot due to the city’s size, which will allow the company to test the program on a larger scale, Luedke said. Roughly 450 Select Service shops exist in Chicago, while the other four markets where the pilot is currently active only have 150 participating shops combined.
“The reason we’re doing this is because that market is such a big metropolitan area. We want to test the scale and technology of the program in a larger metropolitan area,” Luedke said. “That allows us to scale the program and the technology in that unique environment. Obviously, Tucson and Birmingham are good size metropolitan areas, but Chicago is much larger so we want to do it there.”
Luedke said State Farm does not currently have plans to launch the PartsTrader pilot in any other markets. By December, the program will be used in five U.S. markets, including Chicago; Tucson, Ariz.; Grand Rapids, Mich.; Charlotte, N.C.; and Birmingham, Ala. Roughly 600 State Farm Select Service shops exist throughout those five markets.
State Farm has said its PartsTrader process should improve part availability, process efficiency, order accuracy and create a better experience for customers. But the program has been met with overwhelming resistance from shop operators who argue it cuts into profits, slows operations and relinquishes to insurers the last segment of business that repairers actually control.
