Parts can account for the single largest portion of a shop’s sales and not an insignificant portion of a shop’s gross profit. Parts play a key role in cycle time and even customer satisfaction. That’s why it makes good sense to keep striving to improve all the processes related to parts: from choosing vendors and ordering, to how parts are received and handled and entered into the shop’s management and accounting systems.
We asked collision repairers, parts suppliers and other industry experts about the “hidden” costs they see related to the parts procurement portion of the collision repair process, and for the best practices they’ve found to improve shop performance related to parts.
Many electronic options – and mandates
Although much has been written about the battle over various insurers requiring their direct repair shops to use a particular electronic parts ordering system, many shops using such systems say that at a minimum, it has the potential to streamline a lot of the parts-related processes. Yet parts vendors say they are often surprised by the industry’s slow adoption of electronic parts ordering.
“I want to assure you that while some of us may consider faxing 20th century, the fax is still very much alive,” said John Bosin, a Collision Industry Conference (CIC) committee chairman, when moderating a panel discussion on the topic. “When you talk to parts suppliers, ask them how many faxes they get a day with orders. Not only is the fax machine still being used, but the phone is being used and a lot of parts salespeople and delivery people are carrying orders back into the office.”
|Electronic parts procurement options|
· uParts (www.uparts.com)
· OPSTRAX (www.opstrax.com)
· Car-Part.com (www.car-part.com)
· PartsTrader (www.partstrader.us.com)
· NuGen IT (www.nugenit.com)
· APU Solutions (www.apusolutions.com)
· CCC TRUE Parts Network (www.cccis.com/parts-suppliers)
· OEConnection (www.oeconnection.com)
Part of the problem is that there are about a dozen different electronic systems working to automate some aspects of parts procurement, and each of them has both strengths and weaknesses. They vary in how well they integrate with shop estimating and management systems, for example, and some focus more on alternative parts while others are more OEM-focused.
“The reason you might use OPSTRAX or PartsTrader or OEConnection is because each one of them solves a different piece of the problem,” said Jeff Schroeder of yet another system — Car-Part.com — during a CIC panel discussion earlier this year. “If you integrate together, you get more and more pieces solved. But no one has really solved all pieces of the problem yet. We’re all still working on it.”
The panelists say its probably unlikely that shops will ever be able to use a single electronic parts system that meets their needs and those of all their potential trading partners (just as many shops continue to have multiple estimating systems). But continued integration of the systems should make the process less burdensome to shops.
In the meantime, the vendors say, shops should consider which one or combination of the systems best meets their needs.
Working with vendors
John Kallen of Champion Collision in Sandy, Ore., keeps 14 employees
busy in his 15,000-square-foot shop, despite not having a single insurance direct repair program agreement. That means he was free to select the electronic parts ordering system of his choice, a choice that he says was influenced by those on the other end of the parts transaction — the OEM parts departments from which the shop buys parts.
That includes nearby dealerships that refer work to Champion.
“Their philosophy mirrors ours very similarly, and they’ve been very supportive of us,” Kallen said. “The parts departments at both those dealerships knock it out of the park for us as well.”