It takes a big man to admit what he doesn’t know. And John Washbish, as he describes himself, is a very big man. (He also has a big title: he’s president of Customer Relationship Management for the Dana Automotive Aftermarket Group. It is that style of self-deprecating humor that made Washbish’s presentation to the Ninth Annual Global Automotive Aftermarket Symposium a highlight of the conference. Not only was his pitch entertaining (including a rather unflattering photo of yours truly) it also was so chock-full of substance that I wish every top executive of every aftermarket supplier and reseller could have burned into their consciousness.
What made the pitch so engaging was the fact Washbish spent the better part of an hour making fun of what he didn’t know about supply chain technology. In doing so, he conducted a “plain-speak” clinic on the fundamentals of the subject in a way that made it understandable, accessible and downright entertaining. Many of us who write and speak on the subject have a habit of using the jargon of technospeak. Washbish thankfully avoided that trap.
But I was also struck by the continuity of his message. It jogged my memory back to a piece that appeared in the Aftermarket Insider, which is published by the Automotive Aftermarket Industry Association (AAIA). Scott Luckett, the author of the piece and vice president of Information Technology for AAIA, shared his view on what steps we must take to reach the goal of a “digital aftermarket.” It’s pretty obvious that a single voice is beginning to emerge from the aftermarket regarding our future. Increasingly, industry leaders are talking about similar approaches and solutions to what ails us.
So, let me comment on this emerging common voice on supply chain technology by playing off parts of Washbish’s presentation. Washbish’s comments are italicized.
The case for implementing technology
“Look around us. Is this industry swimming in profits? Are we flush with efficiencies? Are we on top of new parts introductions and ready for real-time price adjustments? Understanding the full benefit of the technology is critical in a business where we struggle to find fractions of a point of improvement in margin.”
Amen. As I like to point out, ours is a mature industry. Mature industries struggle with issues like overcapacity, offshore competition and an increased emphasis on “the deal.” Technology is our “last best chance” to build trusting trading partnerships, reduce the overstock everyone in the supply chain has on hand while maintaining acceptable service levels, and expedite the delivery of data to the point of sale in under 90 days. And, God-forbid, find a couple extra points of margin at every step in the supply chain.
The time for technology is now
“What’s really exciting is that technology can lead to significant improvements for all parties in a relatively short period. Historically we’ve seen the rich get richer...often because they have a good business model to support organic growth or exploit consolidation opportunities. We are now entering an era when the quick will eat the slow. No one size of business has an inherent advantage today. A smaller, more agile business may be able to identify and implement new technology more quickly than large, encumbered corporations. Or, progressive, larger concerns may focus more resources on technological solutions. Big or small, you can’t afford to stay out of the race and you can’t afford to guess about the value of new technology.”
No one is served by waiting. Action needs to be taken to get new part numbers and application information into the systems on parts counters faster. We need fuller and richer product attribute data to fuel the engines of Internet Parts Ordering (IPO) and myriad other emerging technology applications that require that fuel.
I have written here before about what I like to call the “yellow-flag effect,” a concept that Washbish referred to when he said that no one size of business has an advantage in a technology-enabled aftermarket. The yellow-flag effect is based on the work of business strategist Joel Barker who states that when a paradigm shift occurs, all the players in the game essentially come back to square one. In auto racing terms, it’s the same impact a yellow flag has –– no matter how big a lead one might enjoy, the yellow flag bunches everyone back up.
The yellow flag that can position the aftermarket for a restart is the yellow flag of product/price and application data. It is the fuel of supply chain technology. Six of the top eight parts resellers have sent letters requesting that their suppliers become AAIA Data Audit Certified (DAC). My suspicion is that the majority of the recipients of those letters had no idea what DAC certification was all about. Aftermarket vendors must move quickly to get their acts together as increasingly tech-savvy resellers demand more and more compliance with standards.
Why the delay?
Virtually everyone I speak with, inside or outside of our company, agrees that one of the most critical factors affecting the aftermarket in the next few years will be the way we manage supply chain technology. Yet most people haven’t done much about it to date. Successfully implementing supply chain technology requires people who “get it.” By that I mean we need IT people who can relate to the market and marketing, and sales and marketing people who understand the benefits of technology. Too often these days, IT people are not directly engaged in the downstream and upstream processes between customers and vendors. And too many sales and marketing types opt out at the first mention of technology by saying, “I’ll put you in touch with our IT team.” We need more people on both sides of the technology fence who are willing to get involved, learn, and do whatever it takes to execute. That’s what I mean by people who “get it.”
The potential that technology represents to transform our business is obvious. However, the ability of individuals across a business to work together to recognize, accept and implement is hindering progress. The notion of getting sales, marketing and information technology on the same page should be front burner stuff for every manufacturer and reseller. In my consulting practice, there is no problem I deal with more frequently, nor one of greater consequence or impact, than discord and dissonance between sales/marketing and IT departments. Other than trust, there may be no greater impediment to the timely implantation of the tools required to move forward.
To effectively implement supply chain technology in the aftermarket we need, as Washbish said, more people who “get it.” IT people who get out of the backroom and actually become involved in process with customers or vendors. But also sales and marketing types, who don’t duck and cover when they hear the mention of anything technology related. Form teams in your business that cross-pollinate elements of these processes. Insist that more of your people attend industry functions that stress marketing and IT cross functionality.
Look for “win-wins”
“One of the cardinal rules for eInitiatives is: “If it isn’t better for everyone, it isn’t better.” Why should anyone else change the way they are doing business, invest time and money, just so YOUR life is easier? The answer is they won’t, unless you coerce them into it. And people who extort things from you generally are not friends. Any collaborative technology must be a win-win proposition. All parties must reap the benefits of the effort, which could include increased sales, higher margins, better service levels, and lower chain-wide working capital. If the scales are tipped too much to one side, the spirit of collaboration can be seriously weakened, and an opportunity to apply new technology for mutual benefit can be lost.”
My advice is read that quote again. In these days of “have it my way” mentality (with sellers and buyers alike) those words resonate with profundity. There is really nothing that I can add.
It’s all about the data
“If there ever was an issue so pervasive that it can’t be ignored or avoided, it is the issue of data. In the electronic nether region of the eCommerce world, nothing works exactly as it should without perfect data. The closer we get to it, the closer we’ll be to realizing the full potential of emerging technology. Perfect data is: full, rich, standardized and synchronized and it holds the key to delegating all of our grunt work to the machines.
Double Amen! Having toiled in the digital world for nearly 10 years now, there is one absolute truth that I have come to realize. It is indeed all about the data. Washbish advised that nothing in the digital world works, as it should without perfect data.
Data is indeed the fuel that powers all supply chain software. And like fuel, if it does not meet the appropriate standards for its basic configuration, the machines it is supposed to power tend to fail. Our industry has established the appropriate standards we require to make supply chain software run smoothly; specifically, I’m talking about the ACES eCat and PIES product attribute standards. Now we simply need to get vendors, resellers and third party system providers up to speed with their adoption.
Only a few words, but a big idea
There is one final comment from Washbish that is worth noting. It was only a few words, but its vision and impact are profound…
“We are populating our own data warehouse that we call DataMine. It is a repository and point of export for product and application related information, with utilities for ongoing synchronization and systematic data updates with our trading partners. We sincerely hope that one day soon, we’ll be using DataMine to export to an Industry Data Warehouse, or IDW. An IDW for the aftermarket exists today only in the minds of some forward-thinking people who realize it will be the solution to many industry problems. Chief among these problems is the needless, multi-month lag in getting electronic data to our points of sale. As you hear more about establishment of an aftermarket IDW in the coming months, please listen carefully and do what you can to support it.”
I must confess to being both dumfounded and embarrassed by the fact that we work in an industry where product application data can (and regularly does) get to the parts counter more quickly in a printed form than electronic. Think about that. In a world where we regularly use technology — for day-to-day office work or even the Internet to get a sports score or stock quote more quickly than we can get the same information from a newspaper or magazine — our industry can write, design, typeset, proofread, print, bind and ship a paper catalog more quickly than we can send a few digital bytes of information to a parts counter. And we stand around scratching our heads wondering why the OE is experiencing a resurgence of their parts business.
The idea of an industry data warehouse that Washbish briefly alluded to is an idea that is developing astonishing momentum in a relatively short amount of time. I have made brief references to the concept in these pages as recently as a couple months ago. But the flurry of both interest and activity related to the subject of a centralized industry repository for either or both ACES application data and PIES product attribute data over just the last three weeks has been nothing short of astounding. I have become aware of at least four different initiatives by groups both public and private to establish some sort of industry data warehouse. Some are connected with industry trade associations, some are private for-profit concerns, but all of them have as their goal the establishment of some sort of centralized exchange point for industry standardized data to make the exchange of data between trading partners easier, cheaper and most of all, faster.
While it is too early to say which if any of these initiatives might be successful, there are a few things worth noting. From my perspective, any industry data warehouse must be just that, an industry data warehouse. It must be by, of and for the industry. All data contained therein must be in acceptable industry standardized formats and it must be regulated by the industry to prevent a situation where one company or association “controls” our data future. Most of us have encountered situations in our aftermarket experience where one company or one association has held use of technology hostage. Most of us are not excited at the prospect of ever allowing that to happen again.
Washbish is to be congratulated for his candid, frank and direct confessions of his own shortcomings and lack of knowledge about technology. His confessions hopefully will make it easier for others to admit what they do not know and seek out the knowledge they need to move forward. This industry simply must get its technology act together if we are ever to return to modest profitability and fend off the ever-increasing encroachment of the OEMs as parts sellers. And to do so we need more leaders like Washbish to confess what they do not know, and take the time to become as enlightened as he has.
Here’s a suggestion for you, John. Make a videotape, a DVD and a written transcript and send it to anyone and everyone in this aftermarket who asks for it, or maybe anyone who doesn’t ask for it because they’re the ones who need it the most. Your message is one that a wider audience needs to hear and hear often. And thanks for being a big enough man to confess.
Anyone else want to come forward?
Bob Moore is president of Bob Moore & Partners, a consulting firm that specializes in the automotive aftermarket. Moore can be reached at [email protected].