As the automotive industry continues its recovery from the 2008 recession and vehicles on the road continue to age, the aftermarket will face increased challenges in the year ahead, not the least of which is globalization.
Globalization, coupled with rapid technological innovations, translates into the need for virtually every company involved in some facet of the automotive aftermarket to be able to sell in different states and/or countries and operate in multiple regulatory environments.
Take, for example, the North American market. At present, nearly three-quarters of automotive parts are manufactured in the United States for assembled components produced in North America. An increasing amount of that North American production, however, is shifting to Mexico, where many suppliers are either planning to bring production facilities or have already set up operations to take advantage of low labor costs and the close proximity to the U.S. market. Mexico’s growing attractiveness is also being driven by political and economic issues in South America, which have combined to make that region a less attractive business location.
These same kinds of dynamics are being replicated around the world, generating a level of business complexity that represents a particular challenge for automotive parts wholesalers and retailers attempting to successfully manage and standardize business processes.
Despite their best efforts to standardize all processes, many process owners recognize that their so-called “standard” processes don’t actually meet the requirements of the various teams who are expected to use them. And let’s face it: If these processes can’t be applied, they may as well not exist. As Steve Stanton, Managing Director of FCB Partners, correctly observes: “Ninety percent of the organizations I know have failed at standardization.”
The automotive aftermarket has tended to respond to the challenges posed by process standardization in one of three ways. Some parts wholesalers and retailers have created standardized processes at a high-level only. These, unfortunately, are not really useful to anyone and are soon disregarded. Others in the aftermarket have developed mega-processes which provide for every possible variation. These too have proven to be useless, as their complexity stalls agility and ultimately fails to engage workers. Still others allow variant processes to be owned, managed and changed independently, which initially creates administrative headaches and ultimately leads to process management chaos.
Enroll in Training Courses |
|
|
You can get trained at NACE Automechanika Chicago this July at no cost. Enroll now in our impressive lineup of technical and management courses taught by some of the biggest names in the industry. Use this link and choose “Yes, I have a coupon code” to register for FREE! |
|
|
It is actually possible, though, for the wholesalers and retailers that comprise the automotive aftermarket to achieve the benefits of standardized processes across their entire organization, while simultaneously allowing individual operations to develop and control process variations as necessary. To succeed, however, all operations within the organization must agree on the standard processes that will form a platform against which all local process variations should be considered. Local process variants can then be established off of this standard process base, with any changes applied by variant experts highlighted and visible against the core process.
Beyond this platform, retailers or wholesalers must have the ability to compare and report on all of the process variations that exist for each standard process. Doing so allows for transparency across the entire organization, with any activities that have been added, removed, or changed visible when compared to the standard process.
When navigating to processes, business teams should be able to easily select the process variant they seek from a list or be routed automatically to their process variant if they have a “default” location, product team or business unit. This will serve to improve process relevancy and, perhaps more importantly, adherence.
Organizations must also establish a global reporting capability. Doing so will allow process champions to see the list of variations that exist for each process. Local variant owners, in turn, should be notified of any changes applied to the standard processes by the global process owners, enabling them to merge those changes into each process variant or to amend them as necessary.
Finally, process costing and timeframe tracking should be established so that the difference in cost and time between process variations and the standard processes can be calculated and measured. This will enable organizations to make informed decisions about whether to keep or eliminate each process variation.
All of these capabilities will enable automotive aftermarket companies to understand the extent of the process variations they are managing, and to challenge, control and report on them. And because process variations will exist in an environment over which the business teams actually have clarity and control, they will feel empowered to be more agile, with the flexibility to customize or eliminate activities as necessary.
Subscribe to Aftermarket Business World and receive articles like this every month….absolutely free. Click here.
