Technology Newsmaker Q&A Darryl Barber

March 9, 2017
Darryl Barber, marketing manager for UPS’ automotive segment, discusses the challenges the aftermarket faces when it comes to multi-channel commerce.

Darryl Barber is the marketing manager for UPS’ automotive segment. He spoke to Aftermarket Business World about the challenges the aftermarket faces when it comes to multi-channel commerce and how UPS is helping companies address those issues.

What are the key challenges in the automotive aftermarket parts industry when it comes to logistics? How are those challenges changing?

Probably most obvious is the emergence of digital channels. E-commerce is changing the way our customers are doing business, and opening opportunities and creating challenges around fulfillment.

If you are a small to mid-size wholesaler, do you want to go direct or through a marketplace, and how do you start that process? Manufacturers that sell direct are bypassing wholesalers altogether. If you are a distributor and all you are doing is warehousing and inventorying parts, what additional value do you create to for the supply chain?

We also see larger, more established brands that are fulfilling direct. A retailer sells the product and they ship direct or drop ship. If I’m used to putting everything on a big pallet and have a routine for delivering to big box distribution centers, that’s different than filling those same orders one at a time. Going from picking cases to (a single unit) is a challenge.

An omni-channel approach also creates an information challenge. How do I make sure that all of the WMS management data is integrated so that if I sell a product online, I don’t still show it in stock for a brick and mortar customer? Inventory accuracy has to be reflected across multiple channels.

What other effects has the shift toward multiple channels (online, B2B, retail, etc.) had on those logistics needs?

If you sell nationally, how do you fulfill nationally? Your footprint may be pretty limited. If you have an online presence, the fulfilment has to scale up.

If I order a part from you and it takes five days to get it, then I’ll order from a competitor who can get it to me in one day. This takes more than just putting up a website. There is a point where the conversion rate goes down markedly based of wait time for shipment. It varies on whether the customer is paying for shipping or not.

All other things being equal, wait time is the big differentiator.

How can distributors still add value in the supply chain in this new environment?

The wholesaler has to evolve to be more like a retailer to the consumer. We know B2B is still antiquated in this industry. You can talk to most of the major Tier One suppliers, and a lot of those orders come in via e-mail, phone or fax. It’s evolving as younger people come into the marketplace and bring their consumer experiences into the business.

But for consumers, ordering by e-mail is not going to work. They want an Amazon-like experience when purchasing an automotive part. If I’m a wholesaler and I want to break into serving individual consumers, then I have to adopt the processes and technologies to facilitate that. You have to create more convenience and a better experience for customers if you want to create value.

How is UPS helping aftermarket companies solve these challenges?

It depends on the size or need of the customer. We do a little less contract logistics in this space, although we do warehousing and fulfillment for some producers who are looking to expand their physical footprint.

We also have part ownership in a company that provides e-commerce as a service. If a company doesn’t want to manage that organically, but source it from soup to nuts, they can do that. They just outsource everything. We have a service that can provide that capability through Ally Commerce. You can take a certain number of SKUs and sell them online, but not have to manage the front end, customer service, fulfillment or returns.

For smaller and mid-size companies, we have tools that will help plug into an online site that helps offer time in transit and costing information that you would expect as a consumer during check out.

We also serve customers that maybe are not in e-commerce with visibility tools. A lot of customers see advantage in having one network that serves all their needs, including heavy freight and international shipping. We don’t just help with merchandise that goes through UPS Ground. We also have aircraft and truckload services.

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