The qualities of a good auto parts supplier
What makes an auto parts supplier good, or even great? Modern Tire Dealer asked those who know best.
Product quality, parts availability and competitive pricing are the most-often cited hallmarks of a good supplier. While each of these attributes reaches deep into a dealer’s operations, the owners we asked say product quality has the edge when it comes to satisfying customers.
“First and foremost is quality,” says Steven Moss, owner and operator of Wilson Tire Pros & Automotive in Elon, N.C. “It’s no good to put on a poor-quality part even if it has a warranty. The inconvenience to the customer to replace the part is not worth it if you have continued issues with a certain line of parts.”
Moss services an average of 700 cars a month in his seven-bay shop. He employs two service writers, two tire technicians, and three service/mechanical techs. He is looking to add a second location in the near future.
Nolan Calvin, owner of Nolan’s Tire Factory in Gresham, Ore., agrees. “You don’t need an abundance of re-do’s and warranty issues. You need to do it right the first time.” In April, Calvin and his 18 employees celebrated 30 years in business at his full-service tire and auto shop. Four of the 11 bays are located outdoors to service tires for motor homes, trailers, farm equipment and commercial loaders and dozers.
A slightly different perspective comes from Ryan Mulder, owner and president of R&R Tire Sales & Service Inc. in Iron Mountain, Mich. “Quality is expected. It falls more on our shoulders to know which company makes good parts and which doesn’t. We tend to learn what’s good and bad. I don’t rely on a distributor for that. We want to be sure they have the variety so we can pull what we want.”
Mulder serves retail and commercial customers in the Upper Peninsula of Michigan through three locations with six, four and three bays, respectively. He has been in business 10 years and has nine employees.
For Mulder, timely availability of parts is the measure of a good supplier. “I don’t know if it’s this part of the country, but it seems availability is going down. We pull out of warehouses in Chicago and Milwaukee, and it still seems to be an issue.”
Mulder sources from four suppliers as well as retail parts stores. Although he is linked to his suppliers’ electronic catalogs through his point-of-sale terminals, he doesn’t always enjoy the benefits of online connectivity. “We know which parts are good, but they are out of stock. You cannot get what you want because they (suppliers) are not keeping up with inventory.”
Although situations where a preferred part is unavailable occur just once or twice a week, it is too often when servicing customers who expect same-day repairs. He says the solution is for suppliers to keep their websites current.
“If you have a part number and offer the part, have it in stock. We’ll see these part numbers on back order for weeks or months. Maybe they will discontinue the part. At least tell us so we don’t tell our customers this part will be coming. If you are not going to have something for a couple weeks or it’s on back order, get the part number off the website. All suppliers are guilty.”
Rapid delivery ranks alongside parts availability to dealers. Moss expects delivery in less than 45 minutes for in-stock parts. If a part is not on the supplier’s shelf, it is sourced from a distribution center.
“Most of the vendors we deal with on the parts side have local distribution centers they pull a shuttle from at least twice, sometimes three times a day. That helps us get cars in the bay and returned to customers. We can provide same-day service in most cases.”
Eric Howland is president of Country Tire Inc., which operates Country Tire Service Center retail locations in Blair, Neb., and Atlantic, Glenwood, and Shenandoah in Iowa. He has 29 employees and each store has four to six bays. He has been a Bridgestone/Firestone dealer for over 25 years and recently joined the Independent Tire Dealers Group (ITDG) to offer a wider selection of tires to customers.
“We do not have the luxury of having a customer base wanting to wait too long for their car to be repaired, so we need our parts stores to be able to deliver the needed part in a timely manner,” Howland says.
Competitive pricing is another critical metric. Says Moss, “We could all price ourselves out of a job, but we don’t want to. People will pay a little more for a quality part if they have confidence in it, and I can sell a pricier part if I have confidence in it.”
Mulder also says people are willing to pay for quality. But he says the current economy makes pricing a major issue for customers.
Program groups offer some pricing assurance. “If you are in a buying group like Tire Factory, then you would anticipate you are getting as good a price as is available because volumes equal discounts,” says Calvin. “Moms and pops are at a disadvantage. I’m confident we are OK.”
After quality, availability and price, a supplier may be able to deliver bottom-line benefits to a dealer in other ways. Training provided by Winston-Salem, N.C.-based Auto Supply Co. Inc. through an ACDelco program helped Moss transform his service writers into parts experts able to improve the speed and accuracy of the ordering process.
“They offer online training for our technicians and, even more important, training geared for the service writer. Our service writers are becoming parts experts. They look up parts and order through POS software connected to each vendor.
“The training teaches them car smarts, how parts work, how to look up parts, and how to make the right purchase the first time. It includes a combined technical training and ASE certification component for the service writer and a training module for the technician to understand what the service writer needs to know.”
Moss says that years ago he would call a parts house which would look up the part. Now it is the responsibility of the service writer. “Because our service writer is a parts expert, the parts warehouse just catches the order that comes out of the system and delivers it.”
Before signing on to the training program, Moss divided his parts purchases almost evenly between three suppliers. Now he places about three-quarters of his parts orders with Auto Supply and receives a 2% discount on parts ordered online.
Where the value is
Last fall, Calvin installed point-of-sale software for auto and tire transactions from Tire Factory. “It speeds up our process a lot. The software makes doing business with a company attractive.”
Scanning a vehicle’s VIN into the system gives a real-time view of product availability and inventory levels. The system is easy to use and improves ordering accuracy.
Calvin says not all suppliers offer online connectivity and he’s made them aware it’s an issue. “Once you get a taste of it you will demand that tool and be less flexible about who you deal with because of the ease of operation.”
Mulder feels more knowledgeable employees at the parts houses would add tremendous value. He shared a situation in which a 1929 DeSoto needed a brake switch. The supplier could not tell him whether the car used a pull-type or a push-type switch.
The dilemma was solved by an elderly customer who happened to come into the shop and said a switch from a 1985 Chevy pickup would work. And it did.
Unique situations usually occur when a young owner has customized a vehicle, says Mulder.
“When we call, it sure would be nice to have better-trained people. They rely so much on the computer that they don’t have the automobile knowledge. If you throw something at them that does not come up on the screen, they are lost.”
Good or great?
According to the 2012 Tire Dealer Automotive Service Survey conducted by Modern Tire Dealer, the top four sources for parts are automotive jobbers (67.1%), warehouse distributors (59.6%), new car dealers (52.1%) and retail parts stores (51.4%). Lesser-used sources for parts are import/specialty warehouses, mail order/Internet distributors, and purchases direct from a manufacturer.
The top reasons given for choosing a particular supplier include reasonable prices (85.4%), stock availability (78.5%), and quality (62.5%). For 89.6% of respondents, however, “good service” drove their ultimate purchasing decision.
Says Calvin: “An independent tire store is about service. We have a good idea what that is about and we demand that of our suppliers.”
And how does Calvin define good service? “When we’re in a jam, they deliver. They take care of warranty issues. They provide good accounting and fast service on credits as well as returns. We don’t want piles of returns on our shelves. And we are getting these things from our suppliers.”
For the most part, the dealers interviewed for this story are satisfied with their suppliers. None, however, described their suppliers as great. A supplier that shows a dealer’s business is valued and does whatever is needed to help a dealer grow may be worthy of the superlative.
Howland may have such suppliers: “One thing that really has made buying from our parts suppliers so easy is that they understand we are going to buy a majority of our product from them and they are very willing to help us find the part we need if they do not have it, even if that means pushing us to the competition.” ■
Dealer concerns: Internet parts, information lockdown and more
The U.S. automotive aftermarket industry is expected to grow 3.4% annually through 2016 to $263.8 billion, according to a report sponsored by the Automotive Aftermarket Suppliers Association (AASA) and Automotive Aftermarket Industry Association (AAIA). The findings were released in May 2013.
“The average age of vehicles is 11.3 years, the oldest ever, and the age mix of vehicles continues to favor older vehicles, creating a robust sweet spot for service and repair,” says Kathleen Schmatz, AAIA president and CEO.
Despite the promising outlook, dealers see some troubling issues ahead. Here’s what they said when MTD asked their concerns for the future.
Cheap parts on the Internet. “Luckily, I think most people are so busy they cannot go online and find parts for $5 less. As long as we as an industry don’t put on parts purchased elsewhere, I think we will avoid headaches. We won’t do it because we tear the car apart and find the customer does not have the right part.
“We use our parts and stand behind them. The rebates and coupons the parts houses help us with make us competitive enough that customers see our way is better.”— Steven Moss, owner and operator, Wilson Tire Pros & Automotive, Elon, N.C.
The attempt and ability of vehicle manufacturers to restrict the aftermarket independent business. “They have the ability to go from cradle to grave on car care. Also, technological advances of cars are making independents less able to do many maintenance services. Because we work on all vehicles, we have to have more extensive tools, equipment and computer technology than any dealer just to reset an oil change light.”— Nolan Calvin, owner, Nolan’s Tire Factory, Gresham, Ore.
A weak economy. “As long as the economy goes along, we can go along. My fear is the economy will tank.”— Ryan Mulder, owner and president, R&R Tire Sales & Service, Iron Mountain, Mich.
Right to Repair and the lockdown that the automakers have on their vehicle information. “We are not always playing on a fair and equal playing field with the knowledge.”— Eric Howland, president, Country Tire Inc., Blair, Neb.
Obtaining and effectively utilizing the service technology needed to support newer model vehicles. “Each successive model year seems to introduce newer, more abundant and increasingly sophisticated vehicle technology, and automotive repair companies must find a cost-effective way to diagnose and repair these features.”— Bill Clark, president, Clark Tire Co., Versailles, Mo.
Federated: Virtual inventory cloud will improve parts availability
Federated Auto Parts President Larry Pavey shared his thoughts on auto parts distribution with Modern Tire Dealer. Excerpts are printed below. To read the complete interview, visit www.moderntiredealer.com.
MTD: Is there a better way to keep track of car parts?
At Federated we are working on integrating systems and inventory visibility through the channel from the manufacturer to the professional service provider. This will allow inventory to be deployed strategically with the ability to identify quickly where a part is needed, making it available as quickly as possible. This VIC (virtual inventory cloud) will help track on-hand inventory and demand throughout the entire transaction chain and provide faster availability answers for all participants.
There is no question that there are better ways to manage parts and we are always looking for ways to improve. Our new I-Pro inventory tool combines multiple demand histories, merging national, regional and local demand with vehicle population information by region, local area or zip code. Then, the data can be combined with replacement rates, catalog hits and so on to better predict which parts will be needed and where. We also are working with multiple stocking models, branch warehouses, hub stores and other deployment techniques, and we are utilizing tools that allow for visibility across a broader spectrum to identify where the closest inventory is located.
MTD: What is in store to improve auto parts distribution?
Historically, the lack of systems integration had resulted in a lack of information that could be used to better communicate demand, needs and availability. Today, there are improved processes to share information and develop better data, systems, processes and capabilities. There are many areas that have seen significant improvement and are continuing to evolve, including enhanced accuracy in electronic data, catalog information, return reduction, planned obsolescence, perpetual updates, inventory sharing and other areas that can offer added value and reduced cost, a major area of focus for Federated going forward.
(For more of this interview, see: Parts distribution: Q&A with Federated's Pavey)
What Clark Tire expects
Bill Clark is president of Clark Tire Co., which is a Del-Nat stockholder (Clark currently serves as secretary on the board of directors) and also a member of the Independent Tire Dealers Group (ITDG).
Clark operates 11 retail locations in central and southern Missouri and four wholesale warehouses covering southern Missouri to southern Iowa. His retail stores vary in size but average three bays and five employees. He employs 104 people.
“Our business activity is almost perfectly divided between the wholesale and retail operations,” says Clark. He asked the managers of his retail stores to share their expectations for auto parts suppliers.
Clark found that while every store manager has their own order of preference, all agree on three qualifications a vendor must meet in order to reach preferred supplier status. Preferred suppliers:
• place high priority on maintaining consistently quick and accurate customer service, specifically employing
knowledgeable phone support representatives and providing timely delivery;
• maintain a robust parts inventory to maximize availability and minimize delays; and
• offer pricing that is cost-competitive and sensitive to market pressures and fluctuations.