State Farm's electronic parts ordering test is underway in two markets and will continue until the company learns what it needs to know, according to Dick Luedke, company spokesman.

"We are not looking at this as a pilot program that will be rolled out as is across the country," Luedke says. "It is a test and we are prepared to find out what works and what doesn't. We are prepared to learn from it and make changes to it as it evolves."

State Farm is testing repairers' use of an electronic parts-ordering system that provides access to vehicle information and is designed to help increase order accuracy and efficiency. Company officials believe this will improve the repair and estimating process by creating a more accurate initial order and by minimizing the return of parts.

The tests began Nov. 12 and are being conducted at State Farm Select Service shops in San Diego and Indianapolis. State Farm has about 11,000 Select Service shops nationwide and "dozens of shops in the two test markets," Luedke says.

All the Select Service shops in those two markets are participating.

State Farm signed non-disclosure agreements with all vendors involved in the test and will not identify them. "We don't reveal our vendors and they agree not to identify themselves," he says.

The test markets were selected because they contain the criteria needed to make the tests valid. "That includes the number of shops, a decent mix of urban and rural shops and a mix of multiple dealerships and single shops," Luedke says. "Some shops were familiar with electronic parts ordering and some were not."

Components of the test include an electronic parts ordering system and the facilitation of discounts provided by original equipment manufacturers.

"We don't have any initial results because we don't want to influence the test by providing feedback before it is over," Luedke says.

Parts procurement programs are controversial because shops want to control their supply chains in order to assume liability for their work. Also, repairers are concerned that insurers who commandeer parts buying will be able to cut repairers off from marking up prices on parts. Many shops make substantial profits on their parts, therefore, repairers who lose that income would have to make up for it by cutting labor costs or doing more business with fewer employees.

Insurers favor the programs because they want to centralize the parts-buying process to build efficiencies and cut down on cycle times.

"Our intent is to not impact the margin that the shops get," Luedke says. "We want to work with OEMs, dealers and repairers to enhance service to customers without impacting the repairer's dollar profit. We want to promote efficiency in the repair process and create an environment where repairers can be more competitive on repair costs."

Regional report

Maine halts Right to Repair bill

The Maine Joint Standing Committee on Business, Research and Economic Development unanimously decided that the proposed Right to Repair bill was unnecessary and should not be forwarded to the legislature. The committee asked stakeholders to update the committee in April 2008 on various training initiatives proposed by the Maine Automobile Dealers Association and the Automotive Service Association. The committee said opposing parties need to come together and move toward a voluntary resolution because a law would be difficult and costly to enforce.

California Autobody Association, DOI continue meetings

The California Autobody Association (CAA) continues to meet regularly with the Department of Insurance concerning steering, paint and materials capping and claims practices. CAA contends that once a consumer makes a choice, the insurer cannot suggest or recommend that the consumer select a different shop. Insurers say they have a duty to explain all benefits and options of their DRP programs, even after consumers choose a shop.

North Carolina Toyota dealer to add body shop

MENTOR, OHIO — DCR Systems signed an agreement to design and operate a collision repair facility for Mike Johnson's Hickory Toyota, a single-location dealer in Hickory, N.C. Under the co-branding agreement, DCR Systems will construct a 12,000-sq.-ft. accident repair center near the Toyota/Scion dealership, which presently does not house a body shop. It is expected to be completed sometime in February 2008.

Missouri, Kansas SCRS elects board members

KANSAS CITY, KAN. — The Society of Collision Repair Specialists of Missouri & Kansas (SCRS MO-KAN) recently elected the following individuals to serve on its board of directors: Mikelle Barnhart, Van Chevrolet (Kansas City, Mo.); Skitch Davis, Davis Collision Center (Platte City, Mo.); Mike Hobick, KC Auto CARSTAR (Blue Springs, Mo.); Nick Steinman, Ben's Body Shop (Mexico, Mo.); and Perrie Stone, Hammer's Auto Works (Springfield, Mo.). Richard Diklich of Diklich Consulting and Longview Community College was appointed to a seat vacated by a resignation.