If all you do is focus on the basics, you will not succeed.
That was the message from Scott Mackie, keynote speaker for the Automotive Industries Association of Canada’s Automotive Conference for Executives held in Ottawa, Ont.
Mackie, who until a recent move to the vehicle side of General Motors was the global director of ACDelco, says that the requirements for the independent distributor to succeed are growing beyond just being able to offer products and price.
“My concern would be that if the focus remains with the independent solely on the basics, that basically lowers the independent to compete with the Chinese brake rotors.
“Somebody asked me the other day why GM doesn’t just buy all [the Chinese brake parts manufacturers]. Well, they provide a great cost and the quality can be very good, but they don’t produce training, they don’t have cataloguing, and they don’t have telematics.” Mackie said that jobbers who don’t recognize the importance of those developments might not have a positive outlook.
“If they don’t start worrying about these things that will differentiate people in the aftermarket, they are going to have a very difficult time.”
Mackie says that an extension of “the basics” should include an increased focus on customer retention and management systems, brand image, encouraging the attraction of skilled technicians, and working to create lean operations.
“Which companies will separate themselves in the aftermarket? First off, they are executing lean. This is a very distant word in the aftermarket,” said Mackie. He related an example of an ACDelco distributor–which incidentally sold as much as all his equivalents in Canada combined–that became the focus of an efficiency exercise.
Mackie says that ACDelco’s “lean guy” identified a million dollars in savings in the shipping area inside of half a day.
Competition for the business of the service provider and the consumer is going to become increasingly strenuous, but it is not all doom and gloom.
Mackie says that although competition from the car dealer can be considerable, competing with the aftermarket will likely never be the main focus.
“For the majority of our dealers (we have 7,500 in the U.S.), you could probably find less than 5% who are concerned about selling parts. As things have become tough on the front floor, selling vehicles, they are paying a heck of a lot of attention to customer pay business in the back shop.
“The majority of the dealers focus on one thing and one thing alone, and that is selling cars and trucks.”
Information Overload a Literacy and Knowledge Management Issue
In an automotive aftermarket that is becoming increasingly reliant on computer-based information, the question of literacy can have a tremendous impact on business and personal success.
Dr. Nick Bontis, who regularly speaks on the importance of intellectual capital, began by talking about the basic need for managing information, as dictated by the increasing pace of growth in information.
In 1930, all the information in the world doubled in 30 years. “That’s kind of scary. In 1970 that same codified base of information would double every seven years. Talk about information overload. By the year 2010, all the codified information in the world, in the history of time, will double every 11 hours.
“Take that back to your CEO. That’s why you have to manage this information.
“Think about it: go to bed a little early on a Saturday night, sleep a little late on a Sunday morning and you’re twice as stupid as you were the night before!”
In the real world, people assume that we all have a basic level of ability to assimilate information.
“Everybody assumes that the person sitting next to you can read. That is the biggest mistake we make in the knowledge world. In the business world I have met executives with low-level reading skills and executives with high levels. Where they are on the spectrum determines their efficiency during the day.
“Being able to look at a report and come up with some actionable decisions in five minutes is better than the guy who has to struggle.”
There are new ways to read, he says, even showing by example how reading can be accomplished even when letters are jumbled.
“The average English-speaking Canadian can read at 200 words per minute. I have coached execs who can read as low as 20 words per minute, and execs who can read twice as fast as the average.
“When I first got into the knowledge management stuff I thought it was about technology. I want to talk about the human side. You cannot do anything faster unless you improve the speed of your reading.”
On the organizational side, efficiency is the key to managing information.
The number-one problem with many organizations is knowledge duplication, he says, with report after report covering the same ground, done by different divisions of a company in isolation.
Research estimates say that Fortune 500 companies waste $12 billion duplicating work. Ford, he says, reported $914 million in cost savings from 1997 to 2000 due to knowledge management. And today, he adds, some 25% of Fortune 500 companies have a chief knowledge officer.
So, what does this mean for a company? For one thing, it highlights the need to retain intellectual capital.
This goes for succession plans, and dealing with employees as they leave.
“What do we do when somebody leaves a company? We throw them a party. What we should be doing is having an exit interview.” Not the kind where you ask what the person didn’t like about the company, but one in which you ask, “what do you know that nobody else knows?”
“Implement universal exit and entry interviews. Many employees walk out the door and have a great deal of knowledge. They will give you some if they leave on good terms. And those who are already there may have more to offer that you don’t know about.”
Incoming AIA chair Malcolm Sissmore announced the appointment of three new AIA Committee and Council chairs during the AIA’s annual general meeting, held during the Automotive Conference for Executives.
Outgoing AIA chair Larry Jefferies has been appointed as the chair of the Government Relations Committee. “The appointment of a past AIA chair to this committee reflects the importance that AIA places on government relations activities,” says Sissmore.
Jack Kligman has been appointed as the chair of the Suppliers Council. Kligman has been active in the automotive aftermarket industry since 1986. He is the national sales manager for Strongarm Inc., where he has been since March 2002. Prior to that, Kligman was the national sales manager for Ford-Smith Machine Co., and before that he was vice-president, marketing and sales with Cliplight Manufacturing. He has served on the Suppliers Council for the last three years and is enthusiastic about the Council’s future work.
Brad Morris has been appointed as chair of the Young Executive Society (YES) Council. Morris helped to found the YES Council in 2002. He joined Grote Industries, Inc. more than 20 years ago in the manufacturing area, and after working through many internal Grote departments, became sales and marketing manager in 1993. In 2001, he began his role as general manager for Grote Canada. AIA’s Young Executive Society (YES Canada) represents the interests of young executives (45 years of age or younger) in the industry.
Dr. Nick Bontis says that maintaining an organizations’ intellectual capital is like filling a glass of water and recognizing that there will always be some spillage.
Vanstone Receives Distinguished Service Award
The Automotive Industries Association of Canada has presented John Vanstone of Specialty Sales & Marketing with the prestigious Distinguished Service Award.
Vanstone was presented with his award during the opening ceremonies of the AIA Aftermarket Conference for Executives, “Driving Force: Innovating the New Tomorrow,” in Ottawa. It is the highest award the association offers.
Vanstone has been active in the automotive aftermarket industry for 30 years. He began his career in the food services industry, and joined the aftermarket industry in 1975 with Monroe Auto Equipment. In 1992, he joined Don Chase as a partner in Specialty Sales and Marketing, where he continues his work with current partner Ken Coulter.
“John has had a stellar and exciting career, and while many people may know him for his humour and ‘legendary entertaining’,” said outgoing chair Larry Jefferies during the award ceremony, “John is better known for his volunteer work, most particularly for his work with Shad’s R & R.”
He has been working with Shad’s since 1976, has been a member of its board since 1985, and he has acted as chair since 1999. It is the largest one-day fundraiser for muscular dystrophy, with a cumulative donation total of over $2.8 million.
Vanstone has been a member of the Automotive Services Marketing Association for over 20 years, and was president in 1990-1991. He has also been an active AIA volunteer; he served on and also chaired the Suppliers Council and the Membership Marketing Committee for many years. He continues to sit on the Suppliers Council today. He was also on the AIA Executive, serving as AIA chair from 1993-1994.
The AIA Distinguished Service Award is presented in recognition of distinguished service and outstanding leadership given to the growth and development of Canada’s automotive aftermarket industry. It is presented to an outstanding individual within the association membership. Criteria for the award include outstanding leadership, community service, and personal contribution to the growth and progress of the aftermarket industry.