A revolution is needed at the parts counter

Many times during my 20-some years in the advertising business, I worked with photographers who were “staging” photographs behind a parts counter. Invariably, they would ask me what kinds of business activities are typical for a counterperson to be engaged in. Answers varied only slightly.

During the first 10 years, my response was, “They flip through a catalog rack with a phone to their ear.” The second 10 years elicited this answer: “They stare at the computer screen with a phone to their ear.”

Most of you probably get the same visual image when asked to describe the business activity behind a parts counter, and that connection between the parts counterperson and the technician is arguably the most inefficient point in the entire parts aftermarket.

If you think the competency of counterpeople is being impugned, you couldn’t be more wrong. If ever there was a group of people who make lemonade out of the lemons they are given, it is counterpeople.

I wrote a piece around a year ago about trying to find a filter for my Mini Cooper. The crux of the problem was that my parts store had the part on the shelf that would fit my car, but they didn’t have the data in the computer that would allow them to match that part with my application. At that time, I literally received dozens of e-mails from counterpeople with a variety of innovative solutions.

That outpouring of creativity confirmed for me what I already knew: Most counterpeople are performing at a level much higher than reasonably should be expected given the technology tools they are provided.

A bad case of data

It’s my observation that the connection point between the parts counterperson and the technician is plagued with inaccuracies and inefficiencies as the result of bad data and under- deployment of available technology.

The bad data issue needn’t be belabored, since I have delivered many a harangue on that issue in the past. Let me just remind everyone that over half of product returns are because the wrong part was delivered to the tech in the first place, reasons being low quality, non-standardized or missing data.

The availability of complete, timely and accurate catalog information is the stuff that assures that the right part gets delivered to the tech. Without accurate catalog information, our returns problem will continue to grow.

Turning waste into efficiency

Instead of discussing bad data, I want to focus on the inefficiency issue that is inherent at the parts counter and how that inefficiency is sapping our profitability.

Again, low quality, non-standardized or missing data is a huge contributing factor to our collective inefficiency, but so too is the underutilization of available technology.

I wrote just last month about aftermarket practitioners, especially distributors, who hang on to dated technology applications, in some cases, as long as 20 years or more.

There is a new industry standard that has emerged in just the last few months that has powerful potential to eliminate much of the inefficiency in the aftermarket. The standard is called IPO: Internet Parts Ordering.

IPO, when applied, can take one of the most inefficient and wasteful activities in the aftermarket — special orders — and streamline it into the very model of efficiency.

Before I describe how IPO can improve our efficiency, let me set up the problem. We are all keenly aware of a situation that arises literally on a daily basis at virtually every parts counter in North America: the need to find a part that is not in stock.

The so-called ‘special order’

Chandler Ellis, the CIO of CARQUEST, made a presentation at AAPEX last year, recounting a CARQUEST analysis undertaking the steps involved in the supply chain to accommodate special orders. This study revealed that, on average, there were 10 steps required.

At the risk of being tedious, let’s examine the process of locating a part that isn’t in stock at the friendly, neighborhood parts store when the tech calls: something I like to call the “I’ll get back to you and let you know if I want it” syndrome.

(Note: The number in parentheses indicates a “step” in the supply chain process requiring interaction between two individuals or companies and requiring a time delay in the supply process.)

A technician contacts his or her parts store looking for a specific part. The store doesn’t have it, but agrees to find it (1). The counterperson contacts other stores (2), the company warehouse (3), competitor’s stores (4), the competitor’s warehouse (5) and ultimately, the supplying manufacturer (6).

Each conversation ends of course with the comment, “I’ll get back to you and let you know if I want it.” Armed now with the information regarding the price of the part, special shipping charges and turnaround time, the counterperson contacts the technician and fills him in on his alternatives (7).

As this new information typically will impact the price of the job and when the tech will be able to deliver the repaired vehicle to its owner, the conversation ends with, “I’ll get back to you and let you know if I want it (8).”

Having secured approval for the new price and repair date from the car owner (9), the tech contacts the parts house and orders the part (10); the parts house, in turn, orders the part from the appropriate source (11), which then ships it (12).

The 12 steps described above don’t account for contacting multiple parts stores, multiple manufacturers or category specialist distributors such as import, rare or engine parts specialists. On the other hand, sometimes you get lucky. As a result, finding the right part may take more or fewer steps.

New standards may be a solution

Depending on the complexity of the search, several hours of productive time are robbed from the parties involved in the transaction. This is one of those situations where, if someone really took the time to understand the costs involved in providing the special order service, they would more than likely react emotionally by declaring that never again would their company provide the service.

Of course, not providing the service is not an option in the aftermarket. The challenge, instead, is to find a way to streamline the process and reduce the waste.

The newly created AAIA IPO Standard may just be the answer to this prevailing aftermarket problem. Simply put, the standard has created an industry-recognized format for real time communications between different computer systems.

The net effect is that a parts counterperson who is working with a computer system that is equipped with an IPO-compliant service can check the availability, price, and shipping time and charges for a special order part, while on the phone with their customer.

There is no need to get hung up on how it works. It seems that the people who built the standard have taken great care in developing a product that is compliant with the prevailing standards out in the bigger e-commerce world.

That means it uses Web Services, an open language for Internet communication. Additionally, it is compliant with the Open Applications Group Incorporated (OAGI), a general industry group that promotes interoperability among business systems and Standards for Technology in Automotive Retail (STAR), a standards-setting group supported by OEMs, new car dealers and their computer providers. In other words, it is made right and will play well with the rest of the e-commerce world.

Testimony to the viability of the standard is that one major international OEM (BMW) discovered the IPO standard and used it to build their special order program for their reseller network. (Do I need to go off on a rant about how the OEMs are using technology to eat our lunch?)

The standard defines a set of “electronic forms” called BODs (Business Object Documents). Trading partners use BODs to check availability; request a price; place, change or cancel a purchase order; and check shipping status. Any IPO-compliant trading partner can communicate with any other IPO-compliant trading partner or application. 

A new e-commerce solution by MEMA/MISG called Direct-Connect uses the IPO standards to enable resellers to send special orders, check inventory and do order status inquiries on manufacturers’ systems.

While this product has been initially designed to function between resellers and manufacturers, the developers say that the solution can be used between parts stores and distributors.

The PartnerShip Network, a peer-to-peer communication solution marketed by AAIA, now has an embedded IPO module contained within it. The module features a guided tutorial that enables any PartnerShip Network subscriber to create and use the electronic forms (BODs) that enable IPO.

IPO can essentially condense the 12 steps described previously into two or three. The resulting savings are profound to the supply chain. The compression of time means that more often than not, the part will arrive so the vehicle can be repaired the same day.

That makes for happier vehicle owners and much happier and more loyal technicians. But there are hidden efficiencies as well. Fast turnaround of special orders takes pressure off “forward deployed” inventories at the parts store. It also means capturing sales that might otherwise be lost.

The bottom line is that technology isn’t cool until something sells, which means maybe IPO is the standard that will help accelerate the snail’s pace rate of aftermarket technology adoption.

Business people might then sit up and take notice when something helps capture a sale. In addition to improving efficiency, IPO has a huge potential to help expand markets and capture more sales.

Bryan Murphy, president of Wrenchead Technology, says that his customers who implement one of their e-commerce solutions typically see significant increases in business — as much as 14 percent in at least one case.

A 14-percent increase in a category that is growing at 3 or 4 percent is mind-boggling. It is obvious to me that adopting IPO is likely to have similar results. And with the growing number of providers that seem to be making the standard available with their solutions, getting on board the IPO train is something of a “no-brainer.”