Parts Procurement Systems as an Efficiency Gain
As more and more shops look to move away from phone, email and fax in their parts-ordering processes, repairers are turning to electronic procurement methods to improve the accuracy and efficiency of their parts deliveries. Some are doing so voluntarily, while others are adapting as OEM certifications and DRP agreements require the use.
From CollisionLink to PartsTrader to OPSTRAX, the systems have ushered in a significantly different process from the traditional methods of ordering parts. And while the process may change, many repairers have reported that using the systems has resulted in added efficiency and a boost in profitability.
Nagy’s Collision Center (locations in Ohio and Illinois) and Zara’s Collision Center (Springfield, Ill.) are two shops that use electronic parts procurement systems for nearly all of their jobs. While both were required to do so thanks to DRP or OEM agreements, both shops have come to embrace the systems and the benefits. Ron Nagy, owner of Nagy’s, and Brady Smith, assistant general manager at Zara’s, break down the differences in the two systems their shops use—PartsTrader and OEConnection’s CollisionLink—how they juggle the use of multiple systems and the difference it has made in their respective shops.
Although electronic parts procurement technology has been available for years, more shops are beginning to jump aboard than ever. According to FenderBender’s 2015 How I Work survey, 48 percent of shops reported using an electronic parts procurement system, meaning that more than half of the respondents still rely on traditional methods of parts ordering.
For Nagy’s and Zara’s, both shops report they have always made efficiency and growth a priority. In fact, before electronic parts procurement systems came on the market, Nagy was already using locating services designed by salvage yards, such as Car-Part.
However, both shops didn’t encounter full electronic parts procurement systems until either their DRP agreements required it or they joined an OEM certification program. That happened, Smith says, as the scale of the business began to grow and they made certification a greater priority.
For Nagy’s, the decision to begin using electronic parts procurement systems wasn’t so much a choice as a requirement. As a State Farm Select Service shop, Nagy’s started using PartsTrader after the insurer mandated it three years ago. Shortly thereafter, Nagy’s became Honda ProFirst certified, which meant it had to use CollisionLink for all Honda jobs.
Zara’s, meanwhile, is Honda ProFirst certified, Ford aluminum recognized, Hyundai certified, Fiat Chrysler Automobiles certified and is Assured Performance Network certified. To obtain certification under those OEM programs, Zara’s agreed to utilize CollisionLink and PartsBridge.
Nagy says he was so ready for a change that over that same period of time, the shop also started using CollisionLink for all non-State Farm jobs.
“It is so much more efficient,” he says. “It’s not just a time saver. You cut out everything from the chit chat to mistakes. Any mistake is inefficient. It costs you time. Getting the correct part, getting the correct paperwork.”
Nagy’s now uses PartsTrader, CollisionLink, Keystone, CCC One, Car-Part and Parts Bridge, while Zara’s uses CollisionLink for almost all of the parts pricing, PartsBridge for Toyota work and PartsTrader for State Farm work.
When using PartsTrader, the shops write a preliminary estimate with OEM parts listed in the database. The estimate is exported to the shop’s EMS directory and PartsTrader software pulls the parts listed in the estimate into the application automatically. The parts needed for the repair are forwarded to parts suppliers for quotes, with a minimum of 30 minutes to submit price quotes back to the shop. When the time expires, shops review the price quotes and order selected parts.
The shops then update the original estimate with the selected part types and prices, lock in and upload the final estimate.
The process for CollisionLink is similar, but does not have the bidding component. Instead, the shop has to select the vendors to send the estimate to. CollisionLink also allows you to decode the VIN and get paint codes, trim codes or suspension codes—information you normally don’t get, says J.R. Noe, general manager at Nagy’s. In addition, you can also price match directly in CollisionLink.
When it comes to CollisionLink and PartsTrader, Noe says that while both systems compile the parts from the estimate and send those parts to the vendors, they have noticeable differences. The biggest differences, he says, is that with CollisionLink, you send the estimate directly to the vendor, while the estimate is sent to multiple vendors through PartsTrader to be bid on.
Both shops have also become adept at utilizing the systems, navigating their quirks and reaping the benefits:
CollisionLink. Smith and Noe agree that the biggest advantage of CollisionLink is the ability to easily pricematch parts.
“What our parts manager will do with a non-State Farm job is he’ll go ahead and order the parts that he knows cannot be price matched just by talking to the vendor,” Smith says. “After that, he’ll go ahead and put those parts that are going to be price matched through CollisionLink.” Another benefit, Noe says, is the access to many OEM vendors, which is the reason why Zara’s and Nagy’s use CollisionLink for the majority of jobs.
Both Noe and Smith also note that the option to decode the VIN and access specific information about the vehicle that is often difficult to access is another benefit of the system.
Cons of CollisionLink, meanwhile, include that there isn’t an option to send the estimate to multiple vendors at once, and that it requires significant double entries, meaning the parts manager has to go back into the management system and note parts that were ordered, orders sent through, or parts waiting to be price matched.
PartsTrader. Smith says that the biggest difference in using PartsTrader is that it’s mandatory with a State Farm job.
“No matter what, every part that we need is going to go through PartsTrader,” he says. “I really enjoy PartsTrader. I can just send that entire parts order out and come back to it in an hour. Everybody will have bid on a part by then and I can place orders then after that. It doesn’t require any faxing or phone calls or seeing who might have what price. I have all that on my computer screen.”
Smith says that PartsTrader did take more training, particularly to learn the quirks. One example is that the labels that appear at the top of the page disappear as you scroll down, making it confusing to remember what those labels represent.
Noe says that another issue the shop had to work around was inaccurate labor times after the quotes were imported back into the estimate. This happened because the system didn’t realize that the part was a pre-existing line. Monitoring that was part of the internal auditor’s job until PartsTrader resolved the issue.
Finally, similar double entries do occur with PartsTrader, particularly if the shop is looking to price match, which must be done in CollisionLink.
Nagy says that since implementing the systems, he’s seen an efficiency gain of 15 percent in the shop, particularly when it comes to parts returns. Smith says that because the parts manager was always such an involved part of the price matching, profitability was high from the beginning. However, they have resulted in significant time savings.
“It’s definitely increased efficiency,” he says. “It has saved our parts manager a significant amount of time when it comes down to not having to make those phone calls or emails. The parts manager was such an involved part of the price matching and profitability beforehand but it was just having to do everything with pad and paper, or mentally keeping track of everything. To where now, it’s a more effective process.”
Nagy says that the key to any new program or system is that you have to learn it, particularly if you have staff members who are “old school” and don’t adapt to new technology very well.
Nagy also recommends having open and productive conversations with insurers, OEs and the parts procurements systems, which he says have actually resulted in changes to the system that have streamlined processes for the shop.
“They’re pretty open minded. I know a lot of the people at PartsTrader and we were able to have phone conversations with us giving them input,” he says. “They want to make it work and easy. Who wants to put a product out there that nobody likes?”
Smith says that when implementing these systems, you need to look at the entire parts process as a whole and specifically, what your shop emphasizes. For Zara’s, that’s price matching, which is why Smith says the processes surrounding these systems have been tweaked with that focus in mind.
“I would say the key to using it efficiently is having someone outside the parts department look at the system that they’re using and really try to help the parts manager see different avenues they could go down and try,” he says.