Over the Counter: April 2003

Industry-Wide EDI Network Could Collapse Costs

A Internet-based industry-wide EDI network that could save automotive aftermarket players millions of dollars and that lays the foundation for an industry communication network has been announced by the Automotive Aftermarket Industry Association (AAIA).

The U.S.-based AAIA says that its PartnerShip Network is an industry-sponsored software solution that addresses the escalating costs of e-commerce communications. The software is an alternative to VAN-based communication of EDI and other e-commerce messages between business partners.

Developed by O’Reilly Auto Parts in the U.S. and then released to the entire automotive aftermarket through the AAIA, the network promises to form the basis for an industry-wide, non-proprietary communication network.

“I would say that this is very significant,” says Scott Luckett at the AAIA. “The dollar savings are measured in the millions and millions of dollars across our aftermarket. One company alone spends $800,000 U.S. a year just to receive messages from its customers.”

Luckett says that the project should win rapid adoption because there are virtually no barriers to implementing it.

Costs are quite reasonable, he says: $4,800 U.S. in the first year, $3,300 U.S. in the years thereafter–which means that it is not for the small jobber with negligible EDI costs. But since there are no messaging costs, it is significantly less expensive than the total costs of the Value-Added Network-based EDI systems used by many players.

“If your communication costs are measured in the tens of thousands of dollars why would you not want to do this?” asks Luckett. Down the road the system could form the basis for an industry-wide communication network, with benefits to ordering inquiries, inventory management, etc., but Luckett says it is important not to get ahead of ourselves here. Right now, the target is the transfer of purchase orders.

“The implications are profound, but you have to walk before you can run. What we’re doing is building the infrastructure for some really exciting industry-wide e-commerce structure. It’s a very complicated jigsaw puzzle to address the question [of excess inventory], but communication infrastructure is key to solving our industry’s problems.”

He says the satellite-based EDI system that links all Wal-Mart stores is a key reason they are so efficient.

“We in the aftermarket are so fragmented, we have only been able to dream about such things.”

A key point of the network is that it offers secure communication between players, even though it uses the Internet, says Luckett.

“We have engineered into the network the things that are the shortcomings of the [standard] Internet: security, acknowledgements and encryption. The P.O. will arrive at its destination and nowhere else.”

The system is already in active use by a number of players.

“We are in live production with Cardone Industries, Gates Rubber Company, Federal-Mogul, Dana Brake and Chassis, Four Seasons, and Unit Parts. EDI communications costs between our companies have gone from thousands of dollars per month to zero,” said Mike Williams, vice-president of information technology for O’Reilly Auto Parts. “At the same time, security and reliability of the network have been every bit as good as what we would expect from a value-added network.”

“As evidence of the broad appeal and industry collaboration of the PartnerShip Network, installation and testing is underway at Advance Auto Parts, CSK Auto, Carquest, Dana (Wix), K-D Tools, Global Accessories (formerly Saddleman), and Morse Auto,” said Luckett.

In addition to the cost of VAN-based EDI, suppliers are also being asked to communicate in unique protocols with each distributor.

“So the suppliers are being bombarded with these demands and find that they’re spending money trying to conform.

“This [new solution] is in the best interest of the industry,” says Luckett. “Let’s get a non-productive cost out of the mix.”

Uni-Select Strikes Unique Deal With Tire Dealer Chain

Uni-Select Inc. has struck a unique deal with Kal Tire which will see the B.C.-based tire dealer become a member of Uni-Select.

Based in Vernon, British Columbia, Kal Tire is Canada’s largest independent tire dealer and one of the largest networks of professional installers, operating over 160 points of sale across Canada.

Under the agreement, the Kal Tire warehouses will become a Uni-Select member and the 160 Kal Tire locations will obtain their emergency automotive parts needs directly from the merchant members of the Uni-Select network.

AIA Launches Young Executives Society

The Automotive Industries Association of Canada has announced the formation of the Young Executives Society, designed to attract younger members of the aftermarket into the association.

The Young Executive Society (YES) is for aftermarket members who are 45 years of age and younger. The mandate of the society is to provide members with a forum to express their views and recommendations on the current industry to ensure its future growth and prosperity. YES will also provide a networking and mentoring environment for young executives in the automotive aftermarket industry to enhance and develop their executive skills so that they may grow into stronger leaders of the industry.

For more information, contact Denise Faguy at (519) 763-9660 ext. 293 or e-mail denise@aiacanada.com.

AIA Signs Carquest

The Automotive Industries Association of Canada has announced that all Carquest stores in Ontario have become members of the association. As a result, all Carquest Ontario jobbers now benefit from a discount in their AIA membership dues through the Group Marketing Program. Through the program, dues are billed to the network’s head office, then redistributed to individual associates and corporate stores. Interested parties can contact Marc Brazeau at marc@aiacanada.com or call (613) 728-5821 ext. 222.

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Golf Tournaments

The AIA Central Ontario Division will hold its 2003 Classic Golf Tournament Wednesday, June 18 at the Springfield Golf & Country Club in Guelph, Ont. Contact: Sandy Ross at rossandy@hotmail.com, or Harvey Presement at harveypres@rogers.com.

The AIA Saskatchewan Division will hold its Marion Roberts Golf Tournament June 5 at the Harbour Golf Club in Elbow, Sask. Fax your interest to Al Schulzke at (306) 249-4913.

Remanufacturers Merge

American Remanufacturers, Inc. (ARI), Anaheim, Calif., and Car Component Technologies Inc. (CCT), Bedford, N.H., have announced the merging of the two companies, with the new entity operating under the ARI name. CCT and ARI are automotive remanufacturing and distribution companies supplying undercar parts to the automotive aftermarket. The company’s products include remanufactured CV drive axles, disc brake calipers, power steering pumps, gears & racks and power brake boosters. ARI also distributes new clutch kits and a full line of new brake components, manufactured at its Guelph, Ont., facility.

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Castrol Receives Training Recognition

Castrol has received certification from the Institute for Automotive Service Excellence for its ongoing training program.

The Castrol training program is certified under the ASE’s Continuing Automotive Service Education (CASE) Program and includes a self-study Lube Technician Certification CD-ROM program and a Business Development Training Program for service providers. The latest addition to the program, the web-based Synthetic Motor Oil Education Program, came on-line at the end of February.

CASE is a voluntary ASE certification program for training entities that provides continuing education to working automotive technicians.