Last month, I observed that the aftermarket is in the midst of tremendous stress, as it tries to adjust to higher fuel prices, shrinking miles driven, the relentless continuation of parts proliferation, spiraling cost of raw materials and wildly fluctuating street pricing in many categories of globally sourced products. It is an "economic gumbo" that is pushing the aftermarket to an inevitable "market correction" as deemed by economic analysts. Returns are another ingredient in this aftermarket economic gumbo that first must be understood, then addressed.

So what are some of the contributing factors to returns? Some are issues that can be associated with one step in the supply chain, while others have an impact on multiple levels, including inventory creep attributable to parts proliferation. The persistent upward pressure on inventory that results from the ever-expanding introduction of new parts for new vehicles creates an environment that fosters returns. There is a tremendous temptation for resellers to pay bills by returning some of their burgeoning stock. Also included are missing, incorrect or tardy data, a multifaceted issue and arguably the greatest contributing factor because of its myriad impacts on all levels of the supply chain; missing data (especially for new applications), which forces counterpeople to guess if a part for last year's application might fit this year's; techs, who — stung by years of poor or ambiguous data — have begun "anticipating" data errors; and delivery derbies, which involves a tech placing an order with multiple jobbers and giving the sale to the first one to deliver. There also are lack of consequences for making a return; little discipline in assessing warranty returns; lack of technology and processes to properly manage inventories; limited inventory visibility between trading partners; and lack of trust between trading partners.

I'm sure there are a few I missed. The key is to understand to what degree each of these factors is contributing to the problem and what can be done.

One of my friends in the aftermarket has proselytized for months about finding a "root cause" to the returns problem. We need to follow his lead and ask one or more of our industry associations to lead the effort.

Only through study and measurement of how each of the mentioned factors contributes to the return problem can we take action to reverse the trend. We need a collaboration of our best and brightest to recommend a course of action.

Any volunteers?

Bob Moore is president of Bob Moore & Partners, a consulting firm that specializes in the automotive aftermarket. Moore can be reached at [email protected].