Participants at the AIA’s Town Hall roundly agreed that tremendous change was coming to the distribution segment, but it’s clear there will be room for more than one approach.
The panel of distribution executives represented a who’s who of distribution organizations: Bruce Allen, PartSource; Robert Blair, Carquest Canada; Dov Lidor, Bestbuy Limited; Michel Maheux, Uni-Select, Inc.; Dick Morgan, Aftermarket Auto Parts Alliance, Inc.; Larry Samuelson, UAP Inc.; and Don Skuce, Auto Sense.
Most said that business in the past year had been solid if not outstanding, and that growth in profits was largely the result of increased efficiencies rather than increased sales.
Robert Blair indicated that among the positive factors was the expansion of emissions testing programs, “not just because of the emissions repair, but also because it drives people back into the bays.” He said that it is important for the industry to stay on top of legislation that will affect it.
“You may have an individual municipality, for instance, that wants to have a recycling program.
“We need to be sure that we are in a position to affect legislation before it comes into force, or at least to work with it afterward.”
When asked what the jobber of the future would look like, some said that it would have an increased retail focus, while others said that it would be defined by its connectivity to its customers. All, however, agreed on the importance of the installer.
Beyond the regulatory hurdles that are sure to face the industry, one of the greatest challenges agreed upon by all was to ensure that the industry has the required skill level.
“Technical training will be important,” says Dov Lidor. “Not necessarily multi-media, but more face-to-face training. We are really going to facilitate that for our membership.”
“Clearly you’re going to have to have the right team in place to take advantage of the opportunities,” says Bruce Allen. “Not just people who want to come to work, but people who are dedicated to your vision. The human resources factor is going to be the biggest thing we are going to face. We are going to see it in our customer base, too.”
“We have to be very basic,” says Michel Maheux. “We are distributors and we need to be very efficient. Product availability is still very important. A jobber has to carry 17,000 to 18,000 skus, but on top of that, the relationship is still a belly-to-belly business, so we have to provide services that the installer needs.”
“Training is probably the number one need in the aftermarket,” said Dick Morgan. “The quickest and easiest thing to do is to facilitate the training from the manufacturers, but we have to go a step further. We have to get training out in the field. We are using hub training with the University of the Aftermar-ket where we can get into given areas.
“The WD that does not foresee the need to give training all the way throughout the system will just not survive.”
Retired Dana Executive Receives Top Honor
Retired Dana Canada executive Tom Saxton has been awarded the Automotive Industries Association of Canada’s most prestigious honor, the Distinguished Service Award.
Saxton, who retired as senior vice president of Dana Canada Inc. in the fall of 2001, served two terms as a member of the board of directors of the association. He also recently served as the chairman of its Government Relations Committee.
Saxton has been involved in the automotive aftermarket since 1959, when he began working with the Dana Corporation and gained experience in a variety of Dana’s facilities in Canada and the United States. His responsibilities over the years included warehouse manager, aftermarket sales manager, plant manager, general manager, and division manager, as well as vice-president and general manager.
He was chosen as the AIA Distinguished Service Award winner for his leadership qualities–his ability to lead industry people towards a common goal and towards the overall enhancement of the aftermarket industry.
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 the highest award presented by the Automotive Industries Association of Canada to an outstanding individual within the association.
Delegates Learn Profitability Secrets
Want to increase your profitability? John Brewer says you may want to start by improving your customer service.
Jobber John Brewer presented his Profitabili-ty for Wholesalers to a capacity audience, revealing his own techniques such as setting objectives to each revenue and expense item, as well as the “Is This Reasonable” benchmark.
Brewer offered his 10 step process to optimum customer service:
1. Customer phones or walks in.
2. Get the information.
3.Determine the correct part for the information given.
4. Ensure the customer is made to feel valued.
5. Invoice the customer or order the part for them.
6. If a part is ordered, develop a personal system to follow up on the commitment.
7. If the invoice is produced, pick the part.
8. Double check the part to ensure accurate picking.
9. Dispatch the delivery.
10. Ensure all parts that match the invoice are delivered to the correct place in a timely manner.
Sounds simple enough — and it is customer service tenets that will help an operation to optimize profitability. “If there is one thing I want people to walk away from this seminar with,” said Brewer, “it’s that the secret to this business is in forming great customer relationships. That’s the key to profitability.”
Technicians Should be Making $75,000, says Speaker
A competent technician should be making $75,000 a year, says Bob Greenwood.
But he adds, “We can’t afford to pay them that, because we as an industry are not there yet.”
Today’s technicians are required to have a broad understanding of electronic, hydraulic and mechanical systems, says Greenwood, which is why he believes technicians are worth that kind of a salary. “These guys are whizzes, but we aren’t there yet to be able to pay them that, and we have to get there.” Unfortunately, Greenwood’s research has shown that the average repair garage in Ontario only produces about $75,000 in total profit after all expenses, but before management wages.
“This is not enough! The average shop owner has bought himself a job. You’ve got to think gross profit. You’ve got to think net profit.”
Greenwood says that the lack of profitability is having an adverse effect not only on the wealth of the owner, but on his ability to retain employees. “Within three years, you are going to need to offer a proper registered retirement pension plan. How are we going to create longevity with our staff if we are not able to provide long-term security for the people we want to have a long-term relationship with?”