The automotive industry is going through a period of significant change thanks to advances in technology. Electric cars and self-driving vehicles, which once seemed futuristic, are now very much a reality.
Those in the auto-parts industry are not immune to the effects of such technological changes and need to make sure they are not slow to react because they could risk being left behind.
Make the most of data to predict parts failure
One defining characteristic of the digital age is the sheer volume of consumer data that is available. As cars become more connected they are increasingly providing a wealth of data. According to a recent report by Mckinsey, a connected vehicle today generates 25 GB of data per hour.
Those who mine automotive data for insights can use it to differentiate themselves from their competition and unlock new opportunities. Forming partnerships with vehicle manufacturers, repair shops and intermediaries such as insurers can help auto-parts distributors use data to gain insights on driver behaviour and vehicle performance. They can use the insights to improve customer services and optimize business operations.
Predictive analytics is one particularly powerful way to use data to provide value to both the customer and business. For example, data from on-board diagnostics can be used to provide a better breakdown service by helping suppliers identify the right parts to repair more quickly. Such information also can be used to help make inventory decisions – what inventory to buy when.
Vehicle mileage data also can be compared to similar makes and models in order to predict service intervals, while maintenance data can be used to predict parts failure. Some car makers, such as Volvo, have been able to combine warranty claim data with telemetry to predict when parts will fail or need servicing.
CRM platforms used on e-commerce sites are another valuable source of data for parts distributors. The data can be used to personalize marketing that make messages more attractive to existing or potential customers.
A study by AutoTrader found customers spend a significant part of their car buying journey researching options online. Keeping track of online behaviour is vital to marketing efforts, as the data can be used to help spot and target potential new leads before they are lost to competitors.
Use technology to optimize processes
Sometimes it can feel like technology presents more challenges than opportunities, but the reality is embracing technology can transform your business. For the auto-parts industry, investing in enterprise resource planning (ERP) software, for example, makes it easier to keep on top of business operations.
ERP can help automotive parts manufacturers trace their products throughout their life cycle, which can minimize delays and make it easier to meet regulatory requirements. It also helps with tracking costs, so areas of waste can be identified.
Another benefit of ERP is that it can give you visibility of your inventory levels in real time, so you won’t have to worry about running out of stock and disappointing customers, or overbuying and wasting money. For extra peace of mind, you could even use your ERP software to automate tasks like purchasing. The ability to automate time consuming, manual tasks is one great benefit of using technology, because automation minimizes human error and frees up time to concentrate on more challenging areas.
Cloud-based ERP in particular is now becoming more common because it allows businesses to operate more flexibly. Using cloud-based ERP software also makes it easier to scale business operations because you don’t have to invest in IT infrastructure up-front.
In years to come, we can expect to see several changes in the auto-parts industry, so it is wise to take this time to work out how you are going to make sure your business remains relevant.
Andy Allan is the owner of CAT Autokeys, a Nottingham based mobile automotive locksmith specialising in replacing keys, key programming, vehicle lockouts and full lock changes.