Global Tension

At an association meeting I attended recently, it was suggested that an information piece be put together warning of the dangers of “offshore parts.”

Another point advanced was that initiatives be taken to ensure that all parts coming into the country, in particular used engines, be properly classified as intended for resale, and not as scrap, as is often the case now.

Both suggestions have admirable intent: to ensure a level playing field for those who are doing business in this country. And both were, it must be said, soundly rebuked for what they were: too little, too late.

In the case of the former, there is simply no credible argument for suggesting that the country of origin of products is a reliable way to determine quality. So many suppliers have already integrated global sourcing into their product lines that it is impossible to make sweeping statements of this sort. As in the vehicle market, the focus should be less about where it’s built and more about how well.

Regarding used engines, while it is my firm belief that all products entering this country should carry full disclosure about their intended usage, if the example noted were to be reclassified accurately, it would only amount to a small increase in tariffs (and presumably price), and not nearly enough to offset the advantage in price that they have in the market.

Notwithstanding the fact that these engines should be proven to be legal for installation in this country (a point that is not entirely clear), it serves as one example of just how much this business has changed.

Where we once looked at the world outside the borders of North America as being separate from us, and those who sought to sell into North America as interlopers, many now form an integral part of a global supply network that becomes increasingly complex with every passing year.

I am reminded of my first days on this magazine more than a decade and a half ago. Bob Blans, who still resides on our masthead as Editor Emeritus, was editor at the time. On my first day, he handed me a flow chart that purported to describe the automotive aftermarket. There were boxes for suppliers, warehouse distributors, jobbers, repair garages, as well as national accounts and car dealers, with lines connecting each in series. (This chart still shows up from time to time.) It was all very orderly and logical. And it was, and is, a total oversimplification of the true interwoven nature of the aftermarket.

It didn’t take long for me to realize just how interconnected each player was, with some acting as distributors for some products and manufacturers of others, while the selling went on among all players in the supply chain, up, down, and sideways.

And today, when I consider that supply web, I am forced to think of it in global terms.

It is simply a matter of fact that borders mean very little in a world where email and the Internet shrink distances and all but eliminate time zones. (Email means never having to say you’re sorry for accidentally waking up your international rep at 3 a.m.)

This does not mean, of course, that doing business in a global supply environment is no different than when supply arrangements are confined to domestic or continental reach. Global supply requires a different way of thinking about corporate security, commerce, lead times, quality assurance, and, yes, pricing.

When your supplier is down the street, it can be easy to fix problems as they arise. But when a supplier is halfway around the world, you have to put mechanisms in place to ensure that problems are minimized, because you just cannot march the order back to them when it’s not right.

Different players, different cultures, different rules, and different languages will play a huge role in shaping tomorrow’s aftermarket.

And all that is going to take some getting used to.