ENGINEERING YOUR RIDE CONTROL INVENTORY

There are probably as many ways to get your ride control inventory wrong as there are part numbers in the catalogue. And only one way to get it right.

With changes in distribution of brands, and major ride control suppliers vigorously vying for market share as a result, getting your inventory of shocks, struts, springs, assemblies, and related components right is more important than ever.

The wrong inventory can effectively take you out of the ride control market; the right inventory can make you the first-call source.

It all starts with understanding the vehicles in operation in your local market, says Ray Proulx, Canadian sales manager for KYB American LLC. “Import is a big piece,” he says by way of example. “Especially in provinces like B. C., Ont., and Quebec where 55% of new car sales are imports, it is important to have inventory to support that marketplace.”

He says that it is vital for the jobber to review in detail what his ride control suppliers have to offer and then consider how that might fit into his local market.

Sales history is an important component. “We would certainly look at historical data, and our classification program [of fast and slower movers].” Using the familiar alphabetic system, where “A” part numbers are the most popular, “B” numbers less so, etc., Proulx says how deep you get into inventory coverage depends on your proximity to your supporting warehouses, and how committed they are to carrying inventory.

“If you are really going to be able to get some market share, you need the ABCs. The D down depends on the supporting warehouse. The jobber certainly doesn’t have to keep the whole gamut. R. L. Polk vehicle registration data, and sales history, will give an indication of what he has to keep.”

Matt O’Brien, president of automotive for Grant Brothers Sales, says that suggested inventories can vary widely, depending on both the vehicles in operation and the product mix. Grant Brothers handles sales of the Gabriel brand in the Canadian aftermarket.

“To be in the ride control business you have to be committed to making an investment of about $3,000. How this slices and dices depends on the selection of entry level, standard replacements, and heavier-service items.”

He says that the market has fundamentally changed over the past few years.

“I think that the thing that most stands out, no different from anything else in this market, is that inventory and the proliferation of parts is a challenge for everybody. If you are an installer, is it possible for you to keep enough of the application-specific product lines [like ride control] on the shelf?

“That is something that the jobber has to be able to help his installer base in. There is no way that the installer can keep enough parts in stock to cover the broad spectrum of the car park.”

He says the need to increase coverage has also driven many jobbers to choose one supplier, where carrying two lines was commonplace in the past.

“One heavy-duty line, another for passenger cars, one retail, one commercial. You very rarely see a jobber with more than one now.”

He does say that leading suppliers have extended their offerings across the spectrum now, making it less necessary for many jobbers to carry multiple brands.

Among the newest facets of the marketplace is the arrival of the ride control assembly. This has forced jobbers to make further decisions on product mix. Not only do they have to choose from among the top-moving ride control units, they also have to consider which applications of ride control assemblies their customer base would find attractive.

Currently, only Gabriel and Monroe branded lines offer the assembly approach, with the Monroe line expanding to 100 part numbers this year. The Gabriel line has about two dozen numbers.

The category has seen some significant growth since it was introduced a few years ago.

“The way it has been driven more at the parts store is what is being driven at the installer,” says Bill Dennie, who heads up Tenneco’s ride control operations in North America. The advantage of the assembly is a reduction in installation time of as much as 75%, plus they eliminate the need to source a variety of parts. Pricing is about the same as the individual parts combined.

“The installer looks at it and has to spend the time to put them all together, so he might as well buy the whole thing and save the labour,” says Dennie.

“Right now, it’s increasing in popularity, but it is not quite the situation like when the market went with loaded calipers when everybody got onto the bandwagon quickly,” says Carlo Falcigno, national sales manager, program groups and North American training manager, Gabriel Ride Control Products. “The main stumbling block, if any, is that it takes a bit more to sell. It requires that the spring needs to be replaced, which is often the case but is also often overlooked.”

One of the issues with the assembly strategy is that they require a greater investment compared to the standard shock or strut, and are more space-hungry.

What needs to be understood about the assembly approach is that the part numbers become extremely application-specific. A part number may, for example, be only for the front left of a vehicle when it is equipped with a V6 engine, with a different number for that vehicle should it be equipped with a four-cylinder. This is why you cannot expect more than the most popular applications to ever be served by this approach, and also why there is little chance of it becoming an important force in the light truck market, where you can have as many as 16 spring options per vehicle.

“If a warehouse were to have more than one location, they could take a central location and get it to the other locations fairly rapidly, and that might be a way to handle it. But as far as carrying the full line, that is definitely not necessary. You really need to look at your balance of sales, scrutinize your customer base, go somewhat by R. L. Polk popularity and so on, but you really need to have your salesman develop the need for it. There are a lot of installers who don’t know what they are.

“It needs to come from the grassroots. You can’t force-feed it; it will cost you too much to do it. You need to develop the business, showing the installer that most of the time in a four-or five-year-old vehicle there is a case for selling springs. And if the spring is sold, he can actually offer the customer a discount and still make more profit due to the installation savings.”

Still, by canvassing customers and reviewing spring sales, for example–the initial offering from suppliers focused on those vehicles with chronic spring failures–you can at least make some educated decisions.

“If it were my business, I would have salespeople start canvassing to find out what the need was, and if there was a need. I would put in five or 10 part numbers to start and not invest more until I see how it was going.”

“In a lot of cases what I try to do is to take some of the manufacturer’s recommendations and [find out] what jobs are the most labourintensive,” says Steve Krieger, co-owner of Barton Auto Parts in Hamilton, Ont. “If it was a three-and-a-half-to four-hour job, I’d look at how it would reduce the labour time. I also use the postal code and vehicles in operation data. Those are usually the three things, but you have to play around with the numbers.”

In addition, he says, the assemblies help Barton provide an option for customers who are having difficulty finding coil springs for import applications separately.

Overall, he says, adding the assemblies has been part of a long-term strategy.

“A year ago, we did a lot of detailing in creating business meetings with the shop owners to talk about them and what they do for labour hours and how it will increase profitability. A lot of it is about education and training,” says Krieger.

In fact, talking to customers about what they are seeing in their bays is a critical compone
nt in getting the right inventory balance. This is no different from other product categories, but the scale of change in the ride control market over the past few years–brand shifts by distributors, application changes, line extensions and reorganizations within brands, growth in the import marketplace, and new offerings at both the top and bottom end of the pricing spectrum–make it more important than ever.

You cannot assume that your customers know what you have on the shelf, nor what you could have on the shelf should you be aware of the vehicles they are working on.

“Jobbers need to have the discussion about how they can support the service provider,” says KYB’s Proulx. “A lot of the effort is ‘How can I sell you?’ but the effort should go into ‘How can I support you?’”

Proulx says that service providers have a serious challenge in gaining post-warranty work from the car dealer, particularly in the import nameplate market. Communicating with the car owner that they can service those vehicles is difficult.

“What can you offer the customer base in terms of product lines, coverage, and the players to support that mission? A lot of it is not being done today. That dialogue is what those partners have to have to compete against the dealerships and the other players in the industry.

“If you go back to inventory SKUs, it is about knowing your market very well. It’s not just about saying you’re doing business with them, but sitting down with them and sharing with them how you can support them.”

Take what you learn about the full scope of your customers’ business, and see how your suppliers’ capabilities and data mesh with that. Together, those should drive your inventory decisions.

“Everything is related. The good jobbers and the major players have that piece figured out.”

It is simply not enough, therefore, to look at your history of sales, or even lost sales alone. Jobbers need to find out what work their customers are seeing–including those jobs they are not even calling you to supply parts for– and add that to the inventory decision process.

By incorporating that element into your inventory equation, you can lower your investment risk, raise your profile, and potentially secure a place in your market as the main source for ride control components.