Auto Service World
Feature   November 1, 2010   by Andrew Ross

Simplified Solutions

Technology Ideas to Improve Efficiency, Sales, and Profits

When it comes to technology, the automotive aftermarket is usually characterized as something less than progressive. This may have very well worked in its favour over the years.

While many industries struggled with implementing new concepts in technology that were unproven and, in some cases, unfinished (time and time again), the aftermarket’s more conservative, pragmatic approach has kept implementation costs in control, and increased the chance of success.

However, those who think that this proves the virtue of standing still should think again: there are significant changes and benefits accumulating, in terms of computing power and resources, that can provide real benefits.

“We wanted to ease our day-to-day business,” says Robbie Fahey, manager of Rafuse Auto Parts in Bridgewater, N.S. “The catalogue we have now is not too user-friendly, and it’s extremely difficult for new employees. I know what parts don’t work and what to override.” But getting new hires to learn those idiosyncrasies is time-consuming and fraught with pitfalls, and each pitfall results in either an error or a lost sale.

“We wanted to improve on that. That was a big part of it.”

The solution to the problem was as simple as getting on board with new technology: in their case, the Activant Eagle system. With this system, all part numbers can be loaded into a single folder, a big improvement over the multiple folders their current 14-year-old Eclipse system requires. ( “Can you imagine keeping the same PC for 14 years?” Fahey laughs.)

And getting all that information, including history, in one place means that accurate pricing on special orders can be more than an educated guess.

“A lot of times you try to overprice to make up for freight, and end up uncompetitive. And we all know what happens when we under-price.”

Among the basic improvements that Fahey is looking forward to is the addition of barcode scanning. “This is going to save us a lot of time and a lot of mistakes.”

However, some may be surprised at one of the benefits that he is really looking forward to: a plain-paper printer.

“This is a small point that makes a lot of sense. We have a lot of downtime because of printer jams. We have a [dot matrix] printer out back and if it jams and we don’t notice, the orders go to hyperspace. And in order to reprint one on the system now, we have to wait a minimum of 15 minutes.”

Combine the lost time before you find out you haven’t seen an invoice or order printed with the 15 minutes’ reset time, add in the fact that you may only find out an order hasn’t gone out until the customer calls–and you could easily be an hour late with an order.

Being able to load up 500 pieces of plain paper–which, itself, offers a saving–delivers on a key objective.

“We want to be quicker and more efficient without sacrificing service,” says Fahey.

And of course, there is the Internet.

Jim Franco, president of Autologue Computer Systems Inc., says that jobbers should focus on three key things that today’s Web-enabled technology can offer.

“The counterman now has a lot more tools. He can go to websites, he can look at promotions, he can look up information. He is going to be much more productive.”

Customer relationship management is much better too, as the buying experience, through online ordering, is easier and more accurate.

Plus, customers can manage their own account, viewing statement, invoices, and credits when they want to.

“They can actually reconcile their accounts online. This eliminates hundreds of phone calls and confusion.” Customers can also look up when an order was picked and dispatched, eliminating another set of non-revenue-generating calls to the counter.

A less simple point to ponder (from the technology standpoint, that is) is the development of shared inventory information. From the jobber’s standpoint, the whole idea is that it is seamless.

“You look like you are very big to your customer. You can connect the suppliers’ warehouses all the way down to the installer. So he can see what’s at the jobber, what is at the warehouse, and even what’s at the manufacturer.” One noted benefit is drop-ship performance that is seamless, and with accurate costing.

And in a sort of one-button approach, the jobber who embraces the new technologies can become a source for products that would be difficult to inventory effectively onsite. Franco offers tools, equipment, and performance parts as examples.

“I’m talking about 25,000 part numbers–all the way from a fuse holder to a wheel balancer–are now available online.

“The installer says he really wants ground effects and a hood scoop. Do you think the installer is going to look for it himself? He’s going to call the local supplier, or he’ll call the speed shop, but now he’s only going to local sources.”

Transparent inventory lookups can make that local call essentially a global one, limited only by your ability to connect to suppliers.

“I can’t comprehend how I can have a hundred of my customers looking at my inventory and part costs, in real time–a hundred at a time, without a single phone call, with no one on hold, and no angry counterman.”

Benefits are manifold. According to Franco, about 10% of the sale is the cost of the counterperson to deliver the sale. The online sale is 1-1.5% of the cost. Order accuracy is improved. Returns are reduced. Pricing integrity is maintained.

“And the owner is typically the worst for quoting pricing that he shouldn’t have. On the Internet, the pricing is the pricing.”

“When we think of what’s new with computer systems, we often think of the Internet,” says Jerry Fugina, president of Rinax Computer Systems. “That’s understandable, since Internet connectivity has recently changed the business world for the better.”

But there’s another aspect of computer systems today that is often overlooked. Computer systems are maturing, and not in the sense that they are getting old, but that they are getting more specialized. That’s significant, because an accumulation of time-saving features that software can provide can make a big impact; after all, for most distributors labour is still the number-one expense.

“Most computer software designed for a specific purpose or business segment has evolved to target productivity very directly.

“They can be small examples, such as automatically changing the message printed on your statement depending upon whether a customer is current, or at 60 or 90 days. Some jobbers with older systems still have a clerk sorting statements and stamping them with a rubber stamp depending upon the aging. Very time-consuming. Or it can be something much more significant, such as allowing customers to place orders directly via an Internet browser, and printing a pick-ticket in the shipping area–bypassing the counter altogether. There are lots of examples in between.”

Fugina agrees with Franco that the ability to reduce backroom paper shuffling, and getting month-end statements and invoices actually in the hands of your customers actually at the month’s end, not a week or two later, by e-mailing them, has significant benefits to cash flow.

On the network front, connecting data even within a company’s own branches has been difficult in the past.

“Modern databases and the reporting tools to manage them allow stocking levels in all branches to be managed on one computer screen. What-if scenarios can be experimented with on the screen, too, without affecting live date, unless the operator decides to make the changes take effect. It’s a much more creative way to manage a jobber’s biggest asset. Purchase orders for all branches can be created from a single screen, too, and of course can result in a huge time savings for purchasing personnel.”

As much as the aftermarket has been able to operate on the slightly older part of the technology curve up to this point, the time has come for many business to make a big leap forward.

“If you don’t, you a
re going out of business; you just don’t know it,” says Franco. “Take your head out of the sand and get competitive.”

Even Fahey admits the time has come, and the benefit is undeniable.

“It’s quite a binder full of where the savings are compared to the investment, but it’s huge. In the short of it, from what I see in the efficiency on the counter, more competitively pricing items, etc., it is going to be a big one.”

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