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'Techno-skeptic' exec discusses change to tech-savvy supplier

Thursday, September 1, 2005 - 00:00

CHICAGO — Before Dayco Products was retooled for the technology age, President Dennis Welvaert considered himself “techno-skeptic.”

The puzzling world of data standards as they pertain to product and inventory management was not top of mind for Welvaert when he attended his first Aftermarket eForum two years ago, an event he once coined a “laptop love-in” and a “geekfest.”

Upon learning of this industrywide data problem, however, he was convinced that cleansing his company’s data would improve Dayco’s operations. And it did.

“There’s a good ROI in much of this technology,” said Welvaert, president of Dayco’s North American Aftermarket Division and the keynote speaker at July’s Aftermarket eForum in Chicago.

However, he added, “some of the available technology is right for now, and some of it is not. The challenge for those of us who run businesses is to be able to make that determination.”

Dayco is one of a prestigious contingent in the aftermarket that’s achieved DAC, or Data Audit Certification, a rigorous process in which product data (found in the PIES standard) is held up to industry standards.

As vehicles’ systems and technology grew more complex, so did their parts, and sharing data with external systems regarding things like types of vehicles in operation improved Dayco’s forecasting abilities, shared Welvaert.

One of a number of speakers who invoked the importance of how technology contributes to shaving time and money from a company’s bottom line, Welvaert told attendees that the decision makers in the company must be involved, and it’s probably not a good idea to outsource this complete data transformation, because it may not address the heart of the problem.

“We not only fixed the data, but at the same time we fixed the processes we used to manage the data,” said Welvaert.

Leaving this data transformation to “techies” is much like a company leaving a car enthusiast in charge of a fleet; these employees may select groundbreaking technology (or vehicles), but they will likely make their decisions based upon their knowledge of the product itself rather than their knowledge of the company’s business needs and objectives.

“The simple fact is that the application of technology is so crucial to every aspect of an aftermarket company’s business operations today — and so expensive — that top management must understand and deal with it,” remarked Welvaert. “There might have been a time when the decisions about what hardware and software solutions were best could be abdicated to the IT department, but by my estimation, those days are long gone.”

The statement that technology adoption cannot be delegated represents one of Welvaert’s “eight essential truisms” for technology adoption in the aftermarket.

Another such truism is “data matters”: he compared data standards to electricity. Just as appliances will not work without proper electricity standards, so, too, will software not operate properly without standards. And if each appliance you buy requires different electrical standards, the result could be a pure mess.

Standards “are absolutely essential to the future of this aftermarket,” said Welvaert, referring to such systems as PIES, a product-specific data standard, and ACES, a cataloging standard found in the aftermarket.

“There is no quick fix” is another truism Welvaert shared with eForum attendees. “We didn’t value data because we didn’t understand its role,” he said, pointing to Dayco’s former system of decentralized data that was cobbled together, along with a decentralized system of managing this data. 

Other truisms included:

  • It takes a team;
  • Teams need leaders;
  • Not everybody is ready;
  • If it doesn’t save money or gain efficiency, its not worth doing; and
  • Keep looking forward.

During his explanation of the “keep looking forward” truism, Welvaert equated the implementation of technology to shampoo instructions: rather than wash, rinse, repeat, his instructions were simply “innovate, adopt, repeat.”

Standards update

Speaking of standards, eForum attendees were offered an update on industry data standards by Scott Luckett, vice president of technology standards and solutions for the Automotive Aftermarket Industry Association (AAIA), and Chris Gardner, vice president of marketing for the Management Information Systems Group, Inc. (MISG), a division of the Motor and Equipment Manufacturers Association (MEMA).

Luckett and Gardner refreshed attendees on the existing standards of PIES — or what Luckett describes as a “price sheet on steroids” — and ACES.

New this year will be image-specific standards such as file formats, color modes, resolution, naming conventions and copyright protection, said Luckett, who added that many resellers have already agreed to these new standards, expected to be rolled out in the next quarter.

In essence, these standards are aimed at helping to unify product descriptions and eliminate waste throughout the supply chain.

“Whether I say Chevy or you say Chevrolet, the computer recognizes it as vehicle 12345,” Luckett offered, “It’s like a secret decoder ring.”

Also discussed by Luckett and Gardner was Internet Parts Ordering (IPO), developed by a group of volunteers within AAIA, which allows two computers to communicate regarding special orders, freeing up time and money in the supply chain.

It typically takes as many as 10 to 12 steps to process a special order, said Luckett.

A panel during the eForum, moderated by Aftermarket Business columnist Bob Moore, featured company representatives who extolled IPO’s effectiveness.

What used to be numerous telephone calls regarding product information is now boiled down to about a 10-second computer process thanks to IPO, freeing up even more time for the counterperson.

John Ruck, another eForum speaker and director of parts sales and logistics for MTU-Detroit Diesel, indicated a company must go beyond following data standards: “Abiding the standards won’t make you successful. You’ve got to understand the communication process. You need systems within your own business.”

Passivity has a price

Software providers are not prospering, they’re merely surviving, said George Thanasides, a founding partner of G2 Solutions, Inc., a consulting service for software providers and distributors.

In 1985, there were 14 software systems providers. In 2005, there are still only 14 providers, said Thanasides.

“Many software packages at their core are the same packages that existed in 1985,” he added.

Thanasides discussed shrinking IT budgets and a limited ROI as reasons not more is invested in effective software solutions.

As companies decrease their IT budgets, repercussions will be felt throughout the industry, he added. “They seem content to make do and focus on minimizing their IT investment. This passivity has a price. It can be a difference between being here tomorrow and not being here tomorrow.”

Additionally, “no distribution package has distinguished itself as a clear-cut next generation option, and relatively few innovative operations have been introduced from the current set of software providers,” he continued.

Those companies that will distinguish themselves in the future are those who can think outside of their four walls and access information with their trading partners, said Thanasides.

Possibilities for the future of software providers include an existing software provider emerging as a market leader, an infusion of capital from a strategic buyer, an economical partnership between two or more existing providers or an entry from a vendor outside the scope of the software market, he told attendees.

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