PBE jobber of the future

March 22, 2016
Paint and material distributors or jobbers are changing in order to meet the changing needs of their body shop clients. I asked several industry friends to share their thoughts and predictions.

As the auto body business matures and evolves, so do other segments of the industry including suppliers of information systems, equipment, paints and supplies. Paint and material distributors or jobbers are changing in order to meet the changing needs of their body shop clients. I asked several industry friends to share their thoughts and predictions.

Glenn Martin, president of Martin Auto Color, a multiple-location jobber in California and Nevada stated: "I feel that the jobber of the future will not look a lot like we do today. I feel that our shop customers will require greater analysis of their purchasing and product group usage, as well as tighter, more accurate inventory control. Jobbers will have to partner in customer shops’ profitability and provide all this from an ever-improving technical platform. Toughest of all, we will need to do all this with fewer people, meaning higher productivity from the higher paid folks that work with us.”

These sentiments have been a theme of conversation, strategic planning and meetings for years within the jobber community. The customer base (shops) is not the only segment consolidating. Jobber and paint manufacturers have also seen consolidation in their segments. Several national and regional jobbers are vying for the body shops business, sometimes with resources difficult for smaller jobbers to match. The need to add services to aide their shop clients, while at the same time struggling with reduced margins, has taxed many jobbers to their limits.

“I see a lot of consolidation in the jobber segment. I see profit margins shrinking for the jobbers due to the shop consolidation and the discounts being given to large MSOs; therefore, the jobbers need to focus on their core customers and assist them with growing by connecting them with potential acquisition targets,” said Mike Anderson of Collision Advice.

“The unprecedented discounting, which is being employed to secure sales volume, is requiring distributors to survive on thinner margins. Distributors are therefore having to adjust their organizational structure, physical assets and operating models to support their profit margins to survive,” says Paul Whittleston, vice president, BASF Automotive Refinish, North America. “Today’s market conditions create an opportunity for the most successful distributors to partner more closely than ever with their paint manufacturer. By developing true partnerships, costs and duplication of efforts can be removed from the value chain, creating efficiencies to be passed on to the end customers.”

Information sharing
T
urning data into information is a task many jobbers have taken on. Being a conduit of information to core shops both large and small is one way that several jobbers have found to add value to their offerings. Beyond the obvious color and material information, being a conduit for everything from general industry information to specific product training will likely continue to be a part of many jobbers’ service offerings. There are several jobbers that provide in shop, virtual and live classroom training. This trend will likely increase with the rapid advancements in both repair and OEM materials. A couple areas where jobbers will likely continue to provide information and services include SOPs, inventory  and replenishment, KPIs and compliance assistance for both regional and local regulations.

Standard operating procedures
With access and technical support teams, jobbers will likely expand their role in helping shops create process and product-specific SOPs. While SOPs don’t necessarily speed repairs or improve efficiencies, such as touch time, they do aide in quality and cost control.

Inventory and replenishment
Inventory control and good purchasing methods are both required skills for every successful jobber; adopting those skills to a shop is not a one-size-fits-all program, as shops needs and goals are different than that of a jobber. While a jobber might have a month’s supply of inventory on hand, few, if any, shops want to handle, store or manage that much material.  One company, ComCept Solutions, offers CollisionScan, which is a complete perpetual inventory management system for the PBE industry. It can provide the collision center with complete usage tracking, automatic re-ordering and inventory reporting that ties directly into the jobber system so prices, historic usage, projected inventory needs are just a click away.

 “Automation of the entire shop requisition/fulfillment process, through the implementation of economical cloud-based mobile technologies, will create a major opportunity for the jobber of the future to achieve continued profitability in a market experiencing widespread and significant margin erosion,” said Glenn Atwell, president of Comcept Solutions. “The increased efficiencies gained through automation directly improve the bottom line for the jobber by reducing the cost of labor, delivery, sales, inventory and accounting, to name a few. Integration with shop/jobber systems via web portals will streamline the delivery of the ever-increasing demand for enhanced digital and graphic information by all in the supply chain. Jobbers must review their business model for opportunities to deploy enhanced, cost-effective technologies, which will enable them to thrive in today’s market.” 

Glenn named increasing consolidation as the most significant change ahead for PBE jobbers in the near future, but also weighed in on new technologies that are impacting the segment.

“The technologies impacting the jobber of the future are cloud-based services supporting mobile scanning devices and vending platforms,” he said. Advances in technology will help the well-prepared jobber of the future provide timely, dynamic services and reports to body shop clients.

Other shops may find a totally independent platform is more to their liking, such as NuVentory, a relatively new company that offers inventory management solutions to body shops. The NuVentory system (cloud-based) offers purchasing, inventory control, usage tracking and reports directly to body shops. This is a great tool for those shops that want to control the all these processes totally independent of their jobber, yet NuVentory can integrate with most jobber systems and send orders directly with no re-keying of data. This is another way that even smaller jobbers can be part of the electronic data interchange technology and process shop orders with less time-consuming data entry.

KPIs 
Many jobbers are already offering and producing KPI reports for their body shop clients; some of the larger jobbers have staff and resources to provide timely reports to aid in business analysis. Other jobbers have found third-party companies or existing partners that can help bring these same services that in the past were only available to larger companies. Some are stand-alone products and others are tools and reports built into the jobber’s existing computer systems.

Jobbers have often have seen, installed, serviced and tested many new technologies, brands and options. With their experience they can be great sources for information on tools and equipment, allowing shops to make more informed purchasing decisions.

Other services
There is a wide variety of services that jobbers have added to their offering or may be considering adding in the near future. A few stand out.

Loyalty-point programs have been introduced by several jobbers. These programs allow shop clients to use points or credits towards purchases of other items such as training, equipment, computer or network services. Other jobbers have provided for the “banking” of discounts or rebate dollars for future use in equipment purchases and training classes for their employees.

Anderson also suggested jobbers provide “accounting services, ensuring proper allocation of their jobber bills to the shop’s profit and loss statements.” Along this line, many shops have moved toward more concise categorization of purchases into their own general ledger accounts. Many jobbers have moved to providing this information to their shop clients in a readily usable form that breaks down all purchases into the customer’s exact general ledger accounts. Several MSO groups across the country are able to receive and upload data input files from their jobbers, reconciled precisely to accounts payable statements, directly into their own accounting system. This saves a tremendous amount of data entry

“Being a PBE Jobber in the future is going to be very different than it is today and will be constantly changing. Flexibility is going to be an important part of distributing within the automotive collision and repair industry,” said Garry Sandt, a district sales manager for National Coatings & Suppies (NCS). “There is a wide array of business models that make up the market that currently need to be serviced by the PBE jobber, and that trend will continue forward.

“A PBE jobber’s customer base can command any service level from simple delivery service, all the way up to working as a business partner in developing and growing markets with mutually beneficial business strategy and planning. Therefore, the PBE jobber will need to be proficient in their ability to understand the different programs a shop needs.”

The PBE jobber of the future will need to be able to help their clients identify those jobber-offered products and services that best fit and aid them in their business. Understanding their customers’ customers (the vehicle owner and those who pay for repairs) is a must for the PBE jobber of the future. They will be expected to have a menu of products and services to help body shop clients of all sizes and all business models help their shop customers pick what is best for them.

 “A PBE jobber in the future will need to be astute in what exactly is the service level that its customers are looking for, require, and/or benefit from that they can offer,” says Sandt. “Support to customers will need to include handling technical product assistance, paint and material use reporting and analysis, inventory management systems and support, productivity and shop layout analysis, 5S implementation, overall shop financial analysis, a strong knowledge of the rules and regulations connected to the automotive collision and repair industry, and a strong business partnership rapport. Keeping up with the current products and technologies, as well as being able to convey the information to the shops regardless of the size of the shop will be of the utmost importance. All of this will need to be part of the PBE jobber’s offering, along with supplying the best materials and products available at competitive pricing.”

But these services will need to be tailored to the needs of the market, and jobbers will need to have hard conversations with customers about the costs of these services — they cannot all be deemed “value add.”

“With the increased discount structures in place in our industry today, the ability of distributors to make a fair return for delivering this outstanding support and service will facilitate difficult dialogue regarding what services customers desire and those that they are willing to pay an extra fee to receive,” said Whittleston.

“Different segments of the refinish market will have different needs. For example, an independent shop may desire more frequent deliveries and more services such as inventory management, financial reporting and in-shop training. On the other hand, large MSOs, who have the critical mass to hold safety stock, may perform many of the distributor functions in-house. For these customers, technical support and solution selling or business training may be more important.  Distributors who are able to adjust their service level offerings to be able to effectively meet these different market segment needs will be rewarded with significant profitable growth opportunities.”

More weigh-in from Whittleston

ABRN: What do you see as the most significant change in PBE jobbers in the near future?
Whittleston: “The most significant change over the next 1-3 years is going to be the ability of the smaller independent distributor to deliver the performance results required, not only to survive but, more importantly, to grow their business. The collision repair industry in North America will continue to experience rapid consolidation. As a result, national distributors will continue to grow through aggressively acquiring smaller and regional distributors. These distributors will have a choice: they can sell, they can stay in niche markets or they can develop a plan to grow.

“If they decide that they want to grow, they will need to partner with many vendors including paint companies like BASF and gain the ability to participate in strong regional networks that are capable of meeting the changing and dynamic needs of multi-regional and national MSOs. By developing true partnerships, value enhancing customer programs can be developed and leveraged to deliver greater efficiencies and grow profits. By definition of these partnerships, the duplication of resources in the marketplace can be eliminated allowing the distributor to focus on servicing the customer with the paint company, to win even more business and profits for their overall distributor network.”

ABRN: What three services do you feel will emerge as must have/offer for the future jobber? Whittleston: “1.) Enhanced automated inventory management tools, which are fully integrated with the paint manufacturer ordering systems. 2.) Technology-based services that help operate and leverage more complex management and parts management systems integration. 3.) Employees who understand true business partnerships. Distributors, who are successful in growing organically, will do so, by not just selling paint or parts, but through addressing unmet business needs. One example may be through leveraging best-in-class processes and procedures from across the industry that adds higher value and market differentiation to the overall collision repair center business.”

ABRN: What technologies do you think will impact the jobber of the future in servicing their clients?  Whittleston: “In the future, on-board technologies will enable vehicles to report damage immediately after a collision occurs and will order the parts and specify the exact color formula required to restore the vehicle to original condition. The distributor of the future will need to achieve systems integration across the entire collision repair value chain to support these changing automotive technologies and customer needs. This will include multiple insurance companies, parts ordering, paint systems, vehicle tracking, etc.

 “The entire collision repair process will become highly automated through the utilization of an integrated virtual cloud system with no-touch ordering, invoicing and even parts and paint delivery. The delivery dates will be defined before the vehicle even arrives at a mega repair facility strategically located outside major metropolitan areas. Distributors of the future will have to adjust their business and service processes to support a true just-in-time delivery system. Their team members will also require new and different skill sets; some with additional IT skills, some who are focused on system integration and some who could be drone pilots to deliver consumables and fully mixed ready to use paint. This may sound quite visionary, but at BASF we’re already developing solutions to this challenge today.”

“The PBE jobber of the future will need to have the best people available in place in order to provide these services. No matter the level of service provided, people and relationships are what will allow the PBE jobber of the future to best service their customer base,” said Sandt. “In order to best serve all the way from the small independent shop, through the dealership networks, up to the large conglomerate organizations, the PBE jobber of the future will need to be able to determine, working with the customer, exactly what level of service can be provided while still allowing the PBE jobber to be profitable.”

Technology will bring the PBE jobber new and improved tools and services to offer its customers. Cloud-based and other third-party software solutions are areas everyone is watching and many are finding early success and wins for both the jobber and their shop clients. The jobber delivery system has already changed; no longer do we see large trucks and vans delivering paint and materials. We now see smaller and sometimes even hybrid vehicles in use. A couple of items that most don’t see in the immediate future for the PBE jobber are RFID tags (too expensive on smaller units) and the use of drones for deliveries.

Personal relationships with people we trust that can help build our business will always be the No.1 driving force of change, followed closely by technology. In general, the industry sees the future of the PBE jobber as more of a cultural change involving all employees, perhaps even more so that the technological advances available and those to come. Empowering all employees with the basic skills to provide excellent customer service at all levels will likely be the mark of the successful PBE jobber of the future. People who know the goals and the score can and will help be part of the team and the solution. The continued growth of skills and knowledge at all employee levels is the future for this segment.

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