State Farm video aims to address 'misinformation' on parts program for DRP shops

Jan. 1, 2020
State Farm distributed a video to its Select Service shops to "clear up some misinformation" about its electronic parts ordering system that it introduced in four U.S. markets.

State Farm distributed a video to its Select Service shops to "clear up some misinformation" about its electronic parts ordering system that it introduced in four U.S. markets.

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Claims Consultant George Avery acknowledges that initial reaction to the program has not been positive. But he also defends the company saying "We recognize that no effort will succeed if there aren't wins for all involved. A healthy, profitable repair industry it important to State Farm and our mutual customers who entrust their vehicle(s) to you for quality, safe and efficient repairs every day."

State Farm's new program has been criticized by repairers, The Society of Collision Repair Specialists, the Alliance of Automotive Service Providers, and other suppliers.

In the video, Avery says, "Our company's reputation was built on fairness and square dealing, and we take issue wit the way some in the industry have portrayed our organization."

Here is the transcript of the in the 3 minute 41 second video, which State Farm released to the media:

As we discussed in previous videos, State Farm is working with PartsTrader on the development of an electronic parts ordering application. Recently, usability testing with repairers and their suppliers was completed as well as field testing in a couple of locations, which have led to enhancements to the application.

Within the past few weeks, we have initiated pilots in a few markets and are receiving feedback from suppliers and members of Select Service Network who are participating.

We acknowledge the significant change this represents to the repair industry, and frankly, reaction from a few in the industry has not been positive. We want you to know that we are committed to working through these changes with our network in a collaborative and constructive way.

From the beginning of this effort, we have remained focused on creating a more efficient and transparent part procurement process. And we have a responsibility to our policyholders to ensure effective oversight of their premium dollars.

We recognize that no effort will succeed if there aren¹t wins for all involved.

A healthy, profitable repair industry is important to State Farm and our mutual customers who entrust their vehicle(s) to you for quality, safe and efficient repairs every day.

Our company¹s reputation was built on fairness and square dealing, and we take issue with the way some in the industry have portrayed our organization.

We take pride in knowing that this industry has consistently rated State Farm as a leading insurer to work with year after year, and this is important to us.

As we continue to engage Select Service repairers within our pilot areas, we would like to clear up some misinformation you may have heard in recent weeks.

With respect to a repairer¹s parts suppliers, just like today, repairers are in control of who provides your parts, regardless of the part type. We have worked with PartsTrader on a process that is respectful of and enables you to maintain your relationships and negotiated deals with your vendors. We understand that relationships with your suppliers are important in managing your business, much in the same way we value our relationship with you.

Parts margins: With the exception of recycled parts, the application does not provide State Farm with access to your buy price or part margins. Repairers choose the parts they feel are best suited for the individual repair. The application provides repairers with a wide range of capabilities to locate parts and place orders in a flexible and timely process. We understand that repairers consider many factors when making part selections for the vehicles being repaired. In addition to price, things such as quality, availability, vehicle type and supplier performance are all important considerations.

We appreciate the opportunity to provide additional information regarding this effort and hope that it answers some of the questions you may have. Our intention is to continue providing updates like this as our work proceeds, and we look forward to working together to make this a successful effort.