Three factors that have fuelled parts proliferation over the past decade – regulatory requirements for fuel economy (CAFE), shifting consumer demand, and increasing content – may soon be credited with reversing this trend.
“I believe we have reached the peak in parts proliferation, and the reason why I say this, I spoke with Ford engineers recently and they, like the other OEMs, are consolidating platforms so the undercar will be designed to be used on several models,” explains John Thody, president and CEO of XRF Inc. “It’s one of the things that [the OEMS] are all doing. All the big manufacturers have the same problem jobbers do. The law of the land says that for every vehicle they make, they have to carry a 25-year supply of repair parts, so parts proliferation isn’t just in the aftermarket. The OEMs have the same problem. They are at the point now where things have to improve. It can’t continue in this direction.”
“From our standpoint we see it starting to level off, which is probably a good thing,” adds Mevotech sales and marketing VP Scott Stone. “One thing that continues to drive it, though, is even though there will be fewer platforms and more world cars, the content of these vehicles, at least on the suspension side, is still increasing.”
According to the 2015 Auto Industry Trends Report by PricewaterhouseCoopers (PwC), OEs are being pressured by both consumer preference for more segmented vehicles and the need to reduce costs for competitive and regulatory reasons. OEMs are adding to the number of models they offer and at the same time reducing the number of vehicle architectures on which they are built, drastically improving product commonality. Volvo is one of the first major OEMs to embrace the strategy. GM is reducing the number of its core and regional platforms to 26 in 2015 from 30 in 2010, and has announced plans to move to just four flexible platforms by 2025. Toyota, Ford, and other OEMs are following a similar approach. The resulting complexity increases costs somewhat, but the additional expense is outweighed by savings from the sharing of common components between cars and platforms, and increased volume.
“With the move to world car platforms we will soon see the number of parts come down. These platforms will reduce SKUs considerably. The sheet metal will change from model to model, but the platform or undercar you ride on will be the same across the brand,” explains Thody.
The PwC Report says the adoption of these next-generation common platforms will also lead to a consolidation of suppliers that will result in a smaller number of large global players. Ford recently stated that it will reduce its supplier base from its current 1,150 to 750, and other OEMs plan to follow suit.
“The conventional suspension that we have now is going to change,” says Thody. “You won’t be able to tell the front of the car from the back. It will have traction motors on all four wheels. It will have a matched set of control arms on forward and [another] matched set of control arms aft. And what this is, when you stop and think about it, is an incremental step towards self-driven or autonomous cars.”
“We just finished retooling for 2,500 control arms, and in light of the current thinking of OEs, a lot of these parts are going to be short-term as we see it today. Those control arm SKUs will likely be reduced to the point where we may see a Ford set, a GM set, a Chrysler set, and so on,” says Thody.
“We are very much on a first-to-market campaign, so we are probably ahead of the curve versus some of our competitors, so we do have to invest in the tooling and make sure we continue to be ahead of the game,” adds Stone. “There are a lot of tailwinds behind us in this category. What we are seeing is a lot of lightweighting going on with the vehicles, and a lot of that weight is coming out of the suspension. And there are a lot of parts going in that I would say are undersized. Everyone talks about cars being built better, lasting longer, etc.; while I generally think that is true, certainly in the suspension category, we are seeing a lot of ‘fragility,’ if you will, or downsizing of components, which results in rapid repair cycles. The amount of material we sell for parts for 0- to three-year old vehicles is increasing every year.”
With the increasing use of aluminum in undercar parts, one of the big challenges for aftermarket manufacturers is the drastic change in torque values. “The challenge for us is the fact that all of our hardware is DIN 10.8 or 12.9, so they can take tremendous torques,” explains Thody. “But if you’re mating something to an aluminum control arm that only requires 26 ft.lbs., instead of 170 ft.lbs, the technicians have to be made aware of this change, and unfortunately a lot of technicians are unaware and are over-torqueing things when installing aluminum control arms, so it becomes an issue. Many technicians think tight isn’t good and tighter is better and really tight is best, but that is not the case with these new parts.”
“Some techs just get too aggressive with the installation and they don’t want to look at how to do it differently. Installing ball joints with air guns, for example, is just not conducive to the success of the transition to these new, lighter chassis parts. It’s a big issue and it’s going to get bigger as the new platforms come on stream,” adds Stone.
“Educating and converting the old guys to a best practice is a challenge for jobbers. There are lots of technicians out there that do it really well, no question, but it does get overshadowed by those technicians who are looking for speed rather than a successful install.”
“To help overcome this mindset, we actually put a fluorescent sticker on these parts that says use of air tools voids the warranty. As the materials change, the mindset has to change. The technicians will often say, ‘Well, I’ve been doing this for 40 years, I know what I’m doing.’ Well, that’s exactly the problem!” explains Thody. “There are no more ’57 Chevys. There is no more opening up the hood and seeing the ground. Technology has changed.”
“Installing stabilizer links with an air gun is just not the way to do it. It’s a very fragile part to begin with, and you stand a huge risk of either breaking it on installation, or at the very least, you over-torque it and the customer is going to be back in 30, 60, or 90 days and it has nothing to do with the part, unfortunately. We take the heat for it, but you aren’t supposed to put these in with 200 pounds of pressure. But that’s often the way it goes. That’s the space we are in,” explains Stone.
“Educating technicians on proper installation methods is where the bread and butter is for jobbers. If we can educate more techs, we can reduce those bad installations and everybody wins. It’s big money and big efficiencies and a real opportunity for everyone,” adds Stone.
The newer materials OEs are using, like extruded aluminum and lightweight steels, are very crisp, so if they are over-torqued or improperly drilled, they can be damaged. There are a lot of things that technicians have to be made aware of, and this is an area where jobbers can and should take a proactive role in educating their customers.
“We work with several of the trade schools like the Northern Alberta Institute of Technology (NAIT). The instructors do their best to keep up, but once you get out of the trade and you are not skinning your knuckles anymore, you can drop behind quite quickly,” says Thody.
To keep instructors up to date with what’s coming down the road, XRF Inc. comes in and puts on a clinic in the morning with the instructors, then a second clinic in the evening for staff and students.
Until the modular platforms reach the aftermarket, jobbers will have to continue to deal with the current level of parts proliferation. While there aren’t a whole lot of options, some ways to manage this are through improving turns and making the most efficient use of parts storage space.
“If manufacturers aren’t heavily focused on the jobber inventories and helping jobbers best utilize the space they have and the dollars they have, those manufacturers are going to be left behind. Frankly, I think this is the biggest issue between jobbers and manufacturers. Mevotech has developed an IOT tool that works with each jobber and their market to determine the best stocking strategies and the best optimization of their inventory, by adding part numbers in and taking part numbers out. If you are not working at it two or three times a year with your jobbers, it will leave you behind. The market is changing that rapidly,” explains Stone.
“Every manufacturer has an annual return, and we don’t just offer an annual return, we insist on it,” explains Thody. “We pull the slow-moving stuff out and get the new faster-moving stuff in. If a jobber has $40,000 invested in chassis inventory, he needs to keep it in that box and keep it active.”
Clearly parts proliferation isn’t going to disappear overnight, but it does appear that it has finally peaked. With OEMs transitioning to product commonality with fewer modular platforms, most parts categories will see reductions both by design and by a drastic reduction in the number of platforms from each manufacturer. The light at the end of the tunnel is officially switched on.
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