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Parts providers, repairers benefit through better understanding of each other

Wednesday, March 14, 2007 - 00:00
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LAS VEGAS — Although parts providers and repairers may seem to inhabit cultures alien to each other, both are engaged in the business of serving their customers — and both sides can reap benefits by obtaining a better understanding of one another’s needs.

It's almost like "parts people are from Venus and installers are from Mars," says William "Mac" McGovern, director of marketing and training for KYB America, LLC. He's amazed over "how little each industry knows about each other," yet obtaining a higher level of enlightenment through better communication between the two can make both operations more efficient.

There actually are similarities between parts suppliers and repairers, Mac McGovern says.

"There are a variety of little things that add up to a big thing in how little they know about each other," according to McGovern, who discussed the topic at the recent Automotive Distribution Network Fusion '07 event.

He believes that there is a fundamental failure in the aftermarket at the jobber level: The solutions and parts they offer don’t match the service provider's needs.

"When jobbers try to communicate with their service provider customers, they hear stuff like 'I don't need it, I don't want it, I can't afford it...and besides, I don't have time to talk about it." When the jobber presses them to reconsider, the technician comes back with something like "I'll decide what I need, when I need it, what I'm willing to spend for it...and who I want to buy it from,'" he reports.

"Store tours are valuable" for showing technicians exactly how the business operates, especially when the parts provider's expenses are explained.

McGovern says it costs $5 to $14 to deliver a part; the figure rises when the component has to come back due to ordering errors or deliberate across-the-product-line requests aimed at giving the technician a selection of options.

"Nearly one out of three parts purchased from providers is returned," he points out, citing return rates ranging from 25 percent to 30 percent.

"The service provider usually doesn't know that cost, and often the parts provider doesn't even know that cost," says McGovern. A sampling of "open books management" displayed to technicians allows them to see first-hand the extent of the problem and how they can be part of the solution.

"The service provider develops empathy" for the seller's situation and is thus more likely to embrace assistance in assuring a more accurate ordering process.

At the same time, pursuing a mutual sense of understanding can result in shop owners being more inclined to participate in a provider's educational sessions and other offerings.

By learning more about the needs of repair shops, providers can help dispel the typical reaction of "I don't need it" when these subjects are discussed.

A parts provider "will be better able to retool some of those programs and incentives," according to McGovern, making them more useful for the technicians in your market.

"Of all the programs and incentives, their participation is often under 10 percent — or even 5 percent," he notes. There remains "a huge gap" in acceptance "until you establish a need first."

Delving into a shop's operational procedures is something a lot of techs don't even do themselves. "The service provider doesn't measure their performance; they're typically going through checkbook management" without gleaning the correct operational analysis.

They frequently don't examine their car counts, productivity, proficiency or profit-centers-by-service-category details, McGovern explains.

"Most shops have 25 percent more vehicles (coming into the bays) than they need to be profitable — if they had the right systems, policies and procedures," he reports.

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