Dan Grosz serves as VP of information systems at VIP Tires, Parts & Service, a company that won the 2008 R.L. Polk & Co. Inventory Efficiency Award for leveraging its inventory management system (dubbed Jupiter) to improve special order deliveries to retail locations. Grosz is also past chair of the AAIA Technology Standards & Solutions Committee.
The biggest technology challenge is how to make the supply chain more efficient. From an industry perspective, we started to address this challenge by looking at data first, and building some very comprehensive data definitions which are incorporated in AAIA standards such as ACES and PIES, and this has been a very successful effort. Now we are looking to go beyond data and apply technology to key supply chain processes such as outside purchases. The AAIA Technology Committee is about to roll out version 2 of the Internet Parts Ordering (IPO) standard, which directly addresses this space—how to get access at non-stocking inventory efficiently.
I’d like to illustrate the potential of IPO by using VIP as an example. We are a relatively small chain compared to the big national chains, yet we have to be able to compete with them on an equal footing. To be able to support customers with all the various vehicle types out there, we would need a massive inventory of slow moving parts. That's not really realistic from a business standpoint. If we can't stock every item ourselves, can we get the items we need very quickly? That's where we need to extend our systems to work in conjunction with our business partners’ and get at external pools of inventory quickly and cost effectively. We're currently tackling this opportunity by reengineering our legacy POS system, and planning to leverage the AAIA’s service-oriented architecture for the aftermarket (including IPO V.2). Having AAIA Web services, that are purpose-designed to be interoperable, gives us a big head start compared to doing everything from scratch ourselves, or by going with a closed proprietary system.
What are the biggest obstacles to technology adoption in this industry?
There's a lot of investment in place with legacy systems, especially with point of sale and the backend systems that support these. It took a lot of time and effort to originally build these things, and because they typically pre-date the Internet or modern GUI architectures, they are very difficult to change incrementally. And a “rip and replace” approach is not only expensive but also full of risks.
Aftermarket technology vendors tend to be highly specialized niche players, and many of the larger technology players that have tried to enter this space haven’t succeeded terribly well.
What are your technology priorities in 2010?
As I mentioned earlier, VIP is spending a lot of effort to re-engineer our point of sale system and that's a massive, multi-phased project. VIP’s POS is even more complicated than most aftermarket systems because it has to support three distinct businesses: parts, tires and service. Our existing point of sale system is a semi-customized extension of an old system, but it's basically still DOS based and incorporates 15-year-old database technology. However, the system has some pretty good business logic that we feel can be leveraged.
The first phase, which we’ve just completed and rolled out to all our stores, replaced the DOS operating systems with Windows and enabled some Internet-based functionality. In the second phase, which we are working on now, the legacy POS database, as well as electronic catalog, gets transplanted. We’re also enhancing our back-end at the same time. For example, we just put in a state-of-the-art business intelligence (BI) application that not only lets us slice and dice sales, but also juxtaposes information from various operational data such as financial, payroll, HR, etc. We're also planning to revisit our Jupiter WMS soon with a list of enhancements and integrations.
