Technology Newsmaker Q&A: Mark Seng

The automotive aftermarket generally lags other industries in technology spending. What do you think are the biggest obstacles to technology deployment in this market?

The Aftermarket does have a reputation for lagging behind other industries, but I think this has improved somewhat over the past several years. Many of our customers have made significant investments in technology and have seen efficiencies as a result. There have been significant strides taken in supply chain management, use of the Internet, and the ability to leverage the AAIA Technology Standards developed over the past few years. However, overall, the reputation does have merit. One major obstacle is the heavy investment in legacy hardware throughout the supply chain that makes leveraging newer technology more difficult. In addition, determining the specific, measurable return on investment is sometimes tough. In times of tighter and tighter budgets, this makes the industry slower to adopt new technologies or slows companies from starting major IT projects.

Each year, Polk presents its Inventory Efficiency Awards to innovative companies in the aftermarket. From what you have seen among the nominees for those awards in the past few years, are there particular applications or operational areas where technology seems to have the most impact?

We at R.L Polk & Co. are proud of our sponsorship of the Polk Inventory Efficiency Award given out at the Global Automotive Aftermarket Symposium every year. This year will be our fifth annual recognition of manufacturers and distributors who are attacking the inventory problem in new and innovative ways. There are several consistent themes across the companies who have been recognized with the award. One is Customer Relationship Management or Salesforce Automation system improvements. These projects have empowered field sales people with data at their fingertips that can be used to evaluate local inventories and make recommendations for improvement based on local market information. A second major operational area these programs have impacted is Distribution or Supply Chain Optimization. Various technologies have been leveraged to provide a more "real time" view of inventory across the distribution network. Several projects have been focused on increasing special ordering efficiency. As for overall benefit, much of what we have seen involve improvements in cash flow and working capital reductions. An interesting note is that not all of these projects necessarily produced less inventory, but they all ended up providing more appropriate inventory for the given location—the right parts at the right place.

How important will data standardization be to the aftermarket moving forward, and do you think more needs to be done to encourage adoption of data standards?

I think data standardization is critical to the aftermarket's long-term success. Getting key data to those who need it to sell the right part—the first time—is a fundamental issue in the industry. There is no better way to speed the process of getting information from one end of the supply chain to the other—from the manufacturer to the person who throws away the box—than to adopt and leverage the aftermarket data standards. I have been involved in the standards development process for over ten years. Over that period I have seen standards development and adoption accelerate for cataloging, product data management, communicating over the Internet via Web services, and communication across shop management systems. While there is still fertile ground to cover, the aftermarket has come a long way. In the end, however, it does come back to widespread adoption being the key to successful standards. I know many people are working on that issue, and I am convinced adoption will grow over time. The business case supports it.