NSF International launched its Automotive Parts Distributor Certification program in July 2011. The program holds parts distributors to high performance standards through a stringent certification process. The standards include requirements for distributors to have ISO 9001-certified management systems, parts traceability and inventory tracking systems, defective parts procedures for customer complaints, and parts recall procedures. LKQ Corp. became the first aftermarket parts distributor to become certified under the program in October 2011.
FenderBender sat down with Terry Fortner, vice president of industry relations and market development for LKQ Corp., to discuss the significance of this certification, and the affect it will have on the collision repair industry.
Why was it important for LKQ Corp. to get certified under NSF International’s Automotive Parts Distributor Certification program?
We take quality and quality assurance very seriously. We also take pride in being the market leader. NSF International, in conjunction with the Automotive Body Parts Association (ABPA), developed this program, and we saw it as a critical evolution to our quality control processes. It’s another level of quality control that even original equipment manufacturers (OEMs) and distributors don’t have to go through.
The NSF distributor certification ultimately allows LKQ Corp. to distribute parts more effectively to our end users, which are collision repair shops. It also benefits our strategic customers, the insurance industry. It helps with efficiency gains any time we’re able to add an additional, effective step in quality assurance. It’s another commitment to quality that should benefit collision repair shops and their technicians as they repair consumers’ vehicles. That was the driving factor that caused LKQ Corp. to become certified under this program.
Distributors must adhere to fairly strict requirements in order to get certified under the program, and to remain certified long-term. How difficult was it to achieve the certification standards?
There are specific quality standards associated with NSF International’s program that distributors must meet. Fortunately, LKQ Corp. was already meeting and practicing many of those standards. For example, the company already had an ISO-certified management system, many of the manufacturers of the parts we distribute already met ISO standards, and we had already rolled out internal quality assurance programs.
But the company had never been audited for some of the processes prior to applying to join the program. So we had to undergo specialized audits to validate that we were meeting the necessary standards specific to NSF International’s requirements. It was an extensive, stringent process to get admitted to the program. It took several months’ time from submitting our application to when we were approved for the program.
There was also a significant cost associated with completing this. LKQ Corp. had to pay for the auditor’s time and expenses, and there were significant internal costs in manpower and other charges.
Under NSF International’s program, distributors are required to have a system in place for parts traceability, service and quality. In what ways does that properly address the needs of the collision repair industry?
The traceability idea is nothing new to LKQ Corp. The company has had a system in place to do that for several years now. I am not aware of any other aftermarket crash parts distributor that has the traceability in place that we have. We are the market leader with those quality assurance distributor programs.
Parts traceability benefits collision repairers because parts can be recalled much more easily if necessary. Recalls can involve major part defects, or simple ones—like a right taillight being put in a left taillight box.
If there is ever a national or internal recall, we can initiate those recalls much more effectively. We can simply go into our system and recall products from our customers through technology rather than executing any manual processes.
That’s a big benefit to collision repairers because manual recalls can be a huge hassle to them. With our traceability and ability to recall, it’s a much more seamless and effective process for shops. It’s a prevention strategy if there happens to be any problems. Traceability also assists in validating that the shop gets the part they ordered.
How often are parts recalls necessary for LKQ Corp. to conduct?
It’s a very low volume. LKQ Corp. has had an extremely low amount of recalls. In fact, the aftermarket has experienced significantly fewer recalls compared to the number of OE manufacturer recalls. But just because it is a low volume doesn’t mean it isn’t important to have effective processes in place for dealing with recalls when necessary.
Why is it beneficial for an organization like NSF International to mandate these processes?
It’s beneficial simply because NSF International is an independent, third-party organization, and keeps a watchful eye on the processes distributors follow. It ultimately makes us a better distributor any time we have a qualified third-party assess our business and highlight areas where there could be improvement. It ensures a commitment to following best practices.
That’s a great point. Unfortunately, LKQ Corp. is currently the only distributor that has earned NSF International’s certification. Does that surprise you?
I am not surprised. LKQ Corp. has been at the forefront of quality assurance for quite some time now. The reason we were first to become certified may be due to the fact that we were already working on various quality standards in advance. We might be a little ahead of the curve compared to some of our other competitors in parts distribution.
What quality standards are you referring to that LKQ Corp. already had in place?
First of all, we have our own quality assurance department. The department is composed of eight people. I believe we’re the only aftermarket crash parts distributor that has its own internal quality assurance program with that many employees.
LKQ Corp. also has other quality assurance programs and processes in place. The company distributes parts certified by the Certified Automotive Parts Association (CAPA). We also offer the Assured Quality Replacement Parts (AQRP) program in place. Further, we distribute NSF International’s certified parts.
Today, with the addition of NSF International’s Automotive Parts Distributor Certification, we have four levels of quality assurance in action. We are filled up with quality.
So why is NSF International’s Automotive Parts Distributor Certification program a good thing, and what benefit does this certification bring to the collision repair industry?
It’s all about ensuring quality, and being able to take quality assurance to the next level. Our customers want quality parts. And LKQ Corp. is a supporter of producing quality products.
It is hugely beneficial to the industry if LKQ Corp. can become a better distributor. That’s because improved processes on our end lead to improved cycle time for collision repair facilities.
Higher quality and greater efficiency benefits the industry because it helps reduce total losses, increase repair volume for shops, and control the cost of repairs. That should ultimately make collision repairers’ lives easier for installation, ease-of-use and throughput of repairs.
That’s exactly what this program is designed to facilitate. Achieving certification under this program is simply the right thing to do for the industry, and for consumers.
The aftermarket versus OEM parts debate continues to go back and forth. With this certification, do you feel LKQ Corp. is now able to more strongly stand behind its belief that it supplies collision repairers and consumers with quality parts?
We don’t stick our head in the sand when it comes to quality. We stick our head up and grab the bull by the horns when it comes to quality because that’s what we strive to deliver everyday.
We offer a lifetime warranty for every one of our aftermarket crash parts, and have always stood behind our products. That’s nothing new. What this program does do is further validate our level of commitment to quality, and reinforce our continuation to that commitment for the long haul. Obviously, companies improve their end products any time they improve operational processes.
From a financial or sales perspective, what impact will this certification have on LKQ Corp. as a company?
Only time will tell. It’s still too early to know because we just recently earned the certification. We’ll know more as time goes on, although it may be difficult to put a quantifiable measurement on it. But whether this leads to a small or large amount of additional sales, we know we’re doing the right thing for the industry.
Do you feel that every distributor of aftermarket parts should be required to get certified under programs like this in order to be allowed to operate?
I believe in a free market. Each distributor has different business initiatives at play, and should be able to make their own decision. This should be an independent decision for each distributor.
