Meeting Inventory Challenges GETTING THE COMPLETE PICTURE

With economic indicators pointing to a long period of steady growth, this is an ideal time for jobbers to evaluate current sales and inventory management strategies for steering and chassis components. Faced with the ongoing proliferation of parts in this category, as OEs continue to focus on light-weighting vehicles to meet pending CAFE standards, along with an aging car park that has extensive maintenance needs, this category probably offers jobbers the greatest growth potential – and yet is the most challenging category for jobbers to manage effectively.
“Inventory management really is the game in this category,” says Mevotech vice-president of sales and marketing Scott Stone. “Parts proliferation has hit this category in a big way. A lot of OEs are on second-, third-, and even fourth-generation designs because they’ve had some challenges, so it’s not easy for jobbers to keep up with this change. Our company sees this as an opportunity and we have invested a lot in inventory optimization and analytics for our customers. We ask them to lean on us in terms of trying to make those inventory recommendations. We do that very specific to each market that they trade in. We are very good at that, and we know that the commitment they have in this category takes a lot of dollars, so our thought is, we will spend those dollars in as meaningful a way as possible. We will develop the knowledge to help them pick the best inventory recommendations, predict the rising stars, predict the failure rates, and predict those opportunities, and we have been very successful at it.”
“Of course inventory management is critical in any category, but perhaps more critical in the chassis category, because of the high value of the components and the part number proliferation caused by the changing demand for vehicle types,” agrees XRF Chassis president John Thody. “As the automakers struggle with trying to make a car be like a truck and a truck be like a car, they are constantly making changes in suspension systems, in order to give the consumer the ride and safety they need while still considering CAFE requirements.”
“For us, it comes down to platform development: making sure that we cover vehicles in their entirety, instead of just sub-components. We do a lot to ensure we are supplying all the parts, not just the convenient parts for the vehicle. And we use the critical mass that we have from a customer standpoint to make those progressive inventory recommendations to our customers. This helps them with their turns, and helps them invest their dollars in new SKUs, and helps them get to the forefront,” adds Stone.
“As manufacturers, we can provide fairly accurate suggested inventories, then temper that with current relationships with the customer base and brand of dealerships in a jobber’s trade area,” adds Thody.
“I see the supplier and jobber getting more connected. It’s going to happen over time. That’s the trend that we have seen over the years. I don’t think that trend is going to change. The relationship between the supplier and the wholesaler will get even closer. It’s now almost impossible for the jobber to handle inventories on his own without having a good supplier to lean on and to frankly help take some of the responsibility for those inventories. There are just too many parts coming at them, too many new design elements,” says Stone.
“Mevotech has a procedure where every 18 months or so, they look at inventories and make sure that everything is current and is moving, see what we may be missing, what should we put in, what should we take out,” explains Andrew Malone of B&B Dixon Automotive.
As a service parts professional, your key role is to determine what the customer really needs and pair those needs with the right product, whether it’s an OE replacement part or an aftermarket upgrade. It’s a well-known fact that many aftermarket parts include enhancements that address shortcomings in OE parts that may have actually caused the part failure in the first place.
The phrase “Better than OE” should be commonplace with counter staff. Having confidence in the products you sell will come across to your customer. If you believe in what you have to offer, the customer will sense your sincerity and be inclined to have confidence too.
One of the reasons why customers are holding on to their cars longer is that the vehicles themselves are far more sophisticated and reliable. And that fact alone makes the choice of a replacement component extremely important in a number of product categories, including steering and suspension parts.
Most customers are looking to restore their vehicle to “like-new” steering response and handling performance, and this can only come through highly engineered premium technologies from leading manufacturers. You should always ask the customer, “What do you expect from this repair? Do you want to restore your car’s steering and handling to OE or better? Do you want a part that will help prevent the same type of problem you experienced with the existing component? Do you want a component that will last longer and help protect your safety?” In each of those cases, the customer will most likely answer “Yes.” This is a key approach that can help them understand why a higher-quality part from a trusted brand is the best choice for them.
“We carry good, better, and best lines and we consider the Moog Problem Solver and the Mevotech Supreme line our best lines,” explains Malone. “We also carry the Mevotech Original Grade line, which is an entry-level line with a limited warranty. It’s definitely a price line that is not as wide as the other two, but basically still has about 90% to 95% coverage. Even though I say it’s not wide, it’s still thousands upon thousands of SKUs available.”
“It really comes down to the year range of vehicles and maybe not having a lot of the entry-level chassis parts for the brand-new vehicles, but once the chassis is 10 years old or older, that’s probably a price level where consumers want to take advantage of the economy line instead of getting a premium part at a premium price. The truth is that the quality of that entry-level chassis part has come leaps and bounds over the last 10 years or so. I cannot even think of a time when I have had a problem. When it goes on it doesn’t come back,” adds Malone.
“Trying to put two three or four different flavours of the same parts on the shelf is just prohibitive today. We are even working with customers who want to streamline down to one line, or one-and-a-half lines, if you will,” explains Stone.
Not that price isn’t still a major part of the industry, but availability and supply have become much more critical in today’s marketplace than they ever have before. “[The jobber] who has the right inventory at the right time at the right place is the one who is likely going to get the sale. The price on something you don’t have is almost irrelevant. If you can predict the right inventory, then you can drive some good margin out of it,” adds Stone.
“Most of the large alignment shops carry an inventory of popular parts. At $135/hour for the alignment rack, the shop cannot afford to wait several hours for parts. It is less critical if the shop owner plans the day and orders the parts he needs in the morning for the afternoon jobs, but in most cases, when chassis work needs to be done, it needs to be done right away,” adds Thody.
Jobbers tuned into this category are ones that have counter staff that really understand the parts and the language that goes with them. The reality is the suspension systems that the technicians have to work on are not the suspension systems that came off the assembly line. By the time they get to the shop, there is a
lot of wear and stress and fatigue in those suspension systems. It’s almost an entirely different vehicle.
“Suspension systems from the OEs are much more fragile now. In the last few years, there has been a lot of light-weighting going on, taking a lot of structural integrity out. It’s no longer enough to know you have a Ford F-150 that you are working on; you now need to know the suspension system in that F-150 and its condition when it gets into that bay, and that will help you recommend the most efficient and best repair for that job and the parts that are needed for it,” advises Stone.
The counterperson’s job is to interpret what the technician’s job is and what that particular vehicle needs, and recommend the most efficient replacement part or parts for that job so they can get that vehicle back up and keep it up for a long period of time.
“All too often the counterperson will just react to the ‘what’s yer price?’ question by simply giving a price when he could have offered the customer better value, if only he had some product knowledge,” says Thody.
“It’s just becoming more and more complicated, so the counterperson really has to be on the ball and understand the language of this category. They have a lot coming at them, so we are working hard to try to make that as easy as we can. We are developing locator modules in our electronic catalogue so the people can point and click on the part that they are talking about. We are also developing a library of acronyms – you call it this but we may call it that, so be aware – just to help make sure the communication process is easy for everybody,” adds Stone.
“It used to be just tie rods, ball joints, and sway links, so it was pretty simple. Now you have some BMWs and other German-made vehicles that have as many as eight different control arms on the vehicle. So it can be difficult trying to get at that information to determine which one you need, and the terminology can be different from each supplier. Your customer is going to call it one thing, your supplier will call it something else, and you’re going to call it something else again, and that’s where the illustrated online catalogues come into play,” explains Malone.
“We have many designs that are beefier and have more structural integrity than the original equipment. They have heavy-duty components in them. They have different bearings sometimes. The majority of our parts are improved over the original equipment just for those reasons. The counterpeople and the outside salespeople need to understand that the part may not look exactly like the OE part that came off the vehicle; it may look beefier and chunkier and bigger than OE, and there is a reason why that is, and they need to understand those benefits and be able to explain it to the technicians. Ultimately it helps everybody maintain these vehicles,” adds Stone.
“I can’t count how many times I have been told by a manager, ‘My counter guys don’t have time to sell.’ But, when you offer three options – good, better, best – you are begging questions from your customer, and your counterperson had better have some answers. Chassis parts are considered by government agencies and insurance companies to be ‘critical automotive parts.’ This means that failure of the parts could result in death, injury, and/or damage to your vehicle,” says Thody.
As chassis components become more expensive, counter staff need to have more product knowledge so they can sell up to a safer part. “XRF has held many a product knowledge/sales clinic for inside and outside salespeople. Every time we do, sales at the store have had a considerable increase, and not only in chassis but in other product lines, because the customer develops confidence in that counterperson and he becomes the go-to guy,” explains Thody.
Waiting for parts is just not where the market is today. You’ve got to have it when they need it; and parts proliferation makes it more complicated, so it’s a continual race to service these bays.
“This is an ‘I need it in half an hour’ world now, and so we are investing in inventory optimization to make those predictions, and the wholesaler that acts upon those recommendations and has the part available is the one that will win the game,” says Stone.
Knowing all those features and benefits and how they are designed is important for counter staff. They need to know the aftermarket components may be improved upon from the original equipment, then they must make sure the technician knows that what they are sending him is an upgrade from OE and that’s what he is paying for. The benefits of that level of service will translate into more efficiency in the shop’s bays, and customer longevity as the part and maintenance cycle is now extended. “These suspension jobs are not small-dollar jobs. The consumer is investing a lot and is expecting a lot, and they deserve a lot,” adds Thody.
“The best counterpeople are recommending the best parts for that solution. It’s no longer just keeping that vehicle moving; it’s working on restoring it back to original equipment design characteristics. And the parts can be significantly different from what came off the assembly line and the counterpeople who know that blossom with our program for sure,” adds Stone.
Many customers don’t understand that there really are differences between the lower- and higher-priced parts. It’s your responsibility to take the extra minute or two and explain that the lower-cost part might not come with a warranty and might be manufactured from inferior materials that could compromise the part’s durability and their driving safety. Be sure you know the two or three leading advantages of the higher-quality part, such as premium materials, problem-solving design, and comprehensive warranty coverage. Then ask them whether saving $10 or $15 really outweighs those advantages. In a majority of cases, the customer will make the right decision and will gain respect for your store’s value-added approach to customer service.
“XRF’s big seller is most likely different from other brands because we are very strong in the light/medium-duty truck fleet niche market. In the later-model car market, ball joints are rapidly being displaced by complete control arms. These are big-ticket items, and counterpeople would do well to gain some product knowledge so that they can support this new trend with some good sound advice,” adds Thody.
As a service parts professional, you need to own your customers before the competition does. Each customer who walks into your establishment wants to feel special, to know they are well served and not overcharged. By building strong relationships with your customers and having the parts they need readily available, you improve customer loyalty, and of course, your bottom line.