Today's supply chain management systems are all about the customer.
One of the interesting dichotomies of technology is that as it grows ever more sophisticated, it conversely becomes easier for the end-user.
And as we took a look at some of the innovations being made involving software that supports inventory, ordering and delivery systems, some interesting applications began to sprout. Many of them keep the customer front and center, and rather than alienating people from people — an often despised facet of technology — their intention is to help people conduct better business with one another.
These systems also make it easier for distributors to spot trends, fulfill orders, know what to stock and do better business overall.
Adoption is less than ideal among the aftermarket, but providers are optimistic about the solutions available.
"In today's modern economy, everyone is carrying an overloaded burden," says Terry O'Reilly, president and CEO of Pricedex, a supply chain solutions provider based in Ontario, Canada. "If a company can make itself easy to do business with, a customer is willing to pay more to get the transaction done to have it right the first time."
He points out that it's difficult enough keeping up on product updates, let alone the technology needed to assist these transitions.
"Every time there's an innovation in the parts building business, that becomes an increasing challenge for companies to handle this and get products to market," he says. "We've heard horror stories about the time it takes for products to be sold (six to nine months in some cases); we think that that's absurd and we believe that with products like ours today, that is unnecessary."
"You may not even know what the technology is you're using," says Tom Webb, a salesperson for Activant's Eagle® for J-CON systems and the software provider's Aftermarket Auto Parts Alliance liaison. "That's one of the primary reasons the counterman can pick it up so fast — it's so intuitive."
The Eagle system greatly reduces counterperson training time, according to Activant. The platform is adapted from a system already in place in the lumber and hardware vertical markets. There are about 5,000 Eagle systems in use, Webb adds.
Part of what makes supply chain management solutions profitable for the distributor may not be necessarily what they help a company do, but what they help prevent.
Many systems we investigated notify manufacturers and distributors when purchases are down or when there's a troubling trend.
If sales are down with certain technicians, the distributor can be notified that same day, says Jim Franco, president and CEO of Autologue, who adds the company then can figure out the cause of this sales drop, whether a driver has made an error or the shop is simply just buying its parts from someone else.
"We have a component called down week," says Steve Young, sales engineer for Activant's Vision™, a distribution management system. "If sales is having a down week, it tells you (early in the week). Vision is doing that analysis, flagging it and saying, 'Hey, you might want to take a look at this.' All the sales type information gets refreshed up to the second."
Signature capture at the point of delivery and sale is another benefit touted by more than one company.
A signature capture option in Autologue's system is "just going like wildfire; everybody wants it," says Franco. "The impact is huge when you can get documents like that online instantaneously."
In some instances, the driver can use a palm-size computer to digitally capture a customer's signature. Additionally, users of the company's system do not have to employ an optical scanner to capture signatures, which has a 4 percent to 8 percent failure rate, says Franco.
"Hard copies don't matter anymore," says Activant's Webb. "They don't have to file anything in the office anymore."
The customer is still No. 1
Another point reinforced by supply chain providers we spoke with is, despite people's aversion to technology as a "depersonalizing" agent, removing people from people, the selling point of nearly all of these systems is their customer-focused features.
As auto parts become more of a commodity item, the differentiator is going to be customer service, Young asserts.
Vision's telephonic features help a person answering the phone know exactly who's calling. An icon will pop up on the computer screen letting them know who the star customers (those who should not be put on hold) are, as well as the duds (which can be indicated by a skull and crossbones icon when the phone rings).
Another benefit to the telephony service is, "if a customer is Spanish-speaking, they get routed to the Spanish-speaking employees," Young adds.
"We are very much a customer-centric company," says O'Reilly from Pricedex. In fact, he points out, the company's products allow its customers to be "customer-centric" themselves.
Many systems these days focus on Web-based applications, because they make things simple for the computer user: all he or she needs is an Internet connection to order parts and do business. Having a Web-based application also takes the burden of software updates off of the end-user.
But Autologue's Franco offers this caveat: the Internet is not always as stable as an in-house system.
Activant's Vision updates are installed by the customer, but Young says it's not that difficult for the computer user. "The way Vision upgrades occur, we send the package out and then there's a menu option and they go through and they run it."
So, if all of these innovations seem like "no-brainers," what's stopping the entire industry from getting on board? Many things, say those we spoke with.
Franco notes the roadblocks to widespread adoption include fear, money and effort.
Some business owners possess a fear of the Internet, Franco offers. "They're not going to tell you that," he says. "They're going to give you excuses."
O'Reilly says, "It is just that it's easier to talk about things than act on them. There still isn't adequate grasp over the rate of return and the real value of those improvements. There are still lots of archaic systems and processes. The industry is still not waking up to that."
Hopefully, what's going to happen is, as leaders act on adopting innovative systems, others are going to follow suit when they recognize the inherent return on investment these systems offer, he says.
"Product information management should not be an IT initiative; it should be an executive initiative," says Jeff Marshall, director of business development for Pricedex.
In O'Reilly's experience, he sees interest from middle management, but some of these managers are unable to drive the changes through the senior levels of these companies.
"I think it's probably going to be too late for some. For others, whether it's ultimately too late to the point of death, I think we will still see some market share changes."
From the end-users' mouths
Aftermarket Business polled a number of software providers, asking them which innovations they offer, with real-world examples. The answers were varied.
Activant's Eagle for J-CON business management system, which is being implemented by distributors such as Hahn Automotive and Parts Warehouse, Inc., is touted to offer a 30 percent reduction in back-office labor, a 20 percent reduction in customer service errors and a 10 percent reduction in product returns. The system also greatly reduces training time for new employees, the company adds.
The system uses a Windows-based graphical interface and offers counterpeople multiple views to speed parts selection.
"We made it much more friendly in how they enter the data," says Webb.
At one time, data had to be entered in a particular order, which led to the counterperson picking up a notebook rather than heading for the computer keyboard when the phone rang.
"We rewrote the entry screen to handle any direction," says Webb, adding it can be VIN, year, make, model or parts description that begins a search. "It's a lot quicker to navigate."
WHI Solutions' Nexpart e-commerce solution is another Web-based platform that requires minimum training, the company states.
"Before Nexpart, our online sales were zero," says Mark Mason, information services director for Paul McHenry & Co., which operates in Pennsylvania, Delaware and New Jersey. "Now we average $300,000 per month in online sales alone. We've done that with decreased manpower, and at the same time we've increased convenience to our customers."
He adds: "Nexpart is immeasurably superior to the old phone and fax way of doing business."
An e-commerce platform from Qwik-OrderDIRECT.com offers distributors a means of establishing a retail Web presence, with product catalogs, shopping carts, credit card processing and integration with a DMS business system.
Electric Motor Service, Inc., in Logan, W.Va., is increasing its inventory turns and net profitability due to the higher margins achieved using the DMS e-commerce service, according to the provider.
PartCat™, a system provided by JNPSoft, is a product management application that offers a single repository for product data management. The system enables customers to map data in industry-approved formats to publish paper and PDF catalogs, as well as on the Web and on CDs. The company states this product is so easy to use, no on-site training sessions have been needed: it's all been handled via Web sessions to teach its customers functions of the system.
Denso, which is using PartCat, reports a 32 percent savings for the 2007 catalog season, with an anticipated 78 percent savings next year. The company adds that PartCat has been the catalyst for getting large national accounts, like CARQUEST, AutoZone and NAPA.
Activant Vision™ offers the aforementioned telephony capabilities, flexible display functions and visibility to inventory at all company locations. Vision also provides users with signature capture and wireless Internet capability.
Gold Standard Automotive, a two-step distributor based in Watertown, Mass., reports a 20 percent sales growth from using the product, and the company states it has gone from 20 daily mispicks to nearly zero, as well as a reduced physical order entry time by 70 percent.
AuctionExpert®, another Activant product, enables distributors and jobbers to load inventory and part numbers into auction listings on eBay Motors, as well as providing maximized listings in Internet search engines and online shopping tools. The solution integrates with Activant's current catalog offerings to redirect slow-moving or obsolete parts.
Smyrna, Ga.-based AuctionFrontier says AuctionExpert has reduced the amount of time to bulk list 250,000 items from 52 person days to five person days, along with increasing online auction sales by 28 percent. The software also has enabled the company to reduce lost sales incidences from eight in 10 to one in 10 customer inquiries.
The Perfect Product Suite™, from FullTilt, automates and manages internal data synchronization and aggregates data from multiple systems, eliminating errors and automating workflow.
One hard-to-find parts supplier has used the Perfect Product Suite to replace 1,400 different databases, according to FullTilt.
DST, Inc.'s TurboParts II is an enhancement to the company's Internet-based parts ordering system. The solution joins with Activant's PartExpert catalog to increase online sales of up to 40 percent, according to the company, and includes a built-in buyer's guide.
PA Distributors, in Rockville, Md., says using TurboParts II helped the company increase sales revenue by 10 percent and reduce its headcount by one employee, who handled fax orders and rollover dealer phone bank orders. The company then was able to hire an additional outside salesperson instead.
Autologue's ePaperless Office has decreased labor by eliminating filing, envelope-stuffing and invoice-retrieving, among other office tasks. The company says the total mailing cost to customers is $15 to $25 per person per month, wherein the ePaperless Office costs only about 30 cents per customer per month. One Stop Parts Source in Southern California reports this solution is saving three hours a day just in sorting and filing its 500 invoices per location. One Stop also states its driver accountability has increased 20 percent by using Autologue's eDelivery system, which tracks delivery times and part numbers.
Other solutions about which we received information include SPEEDcat, a mapping tool that allows parts makers to map multiple vehicle applications to multiple parts with one click, which helped one shock maker to decrease order errors by increasing its industry-compliant product data from 40 percent to 95 percent; and NexJen Systems, whose data warehouse with versatile views allowed Offroad Warehouse, in California, to better measure sales performance and key financial information.
