Recently, a news item came across my desk that piqued my interest. And, while it barely made a ripple across the aftermarket, I found it rather compelling.
The announcement, which you can read in Aftermarket News, detailed a distribution agreement between ArvinMeritor's Light Vehicle Aftermarket Group (LVA) and Jiffy Lube's 419 company-owned service centers.
With Shell (Jiffy's parent company) deciding to close its distribution arm, Heritage, LVA seized the opportunity to provide valuable, base services to Jiffy Lube stores. Over the course of the past decade or so, we've seen many "distribution" agreements come and go between manufacturing suppliers and retail service centers. Retail service providers like Midas, Meineke, Firestone, Goodyear, Les Schwab, Pep Boys, Wal-Mart and others all have direct-supply arrangements with many manufacturing suppliers. So, the announcement, while nice for LVA, wasn't very noteworthy in the grand scheme of things. Or was it?
You and I know ArvinMeritor LVA primarily as a manufacturer and supplier of filter (Purolator), ride control (Gabriel) and exhaust (Maremont, Arvin) products. However, the announcement explains that LVA will be distributing consumable products for shop use, such as paper towels, tools and office supplies in addition to filter products. Really? Paper towels? Office supplies? These are hardly what we've come to expect from a traditional supplier of hard parts in our market. According to Rob Malone, LVA vice president and general manager of Filters and Ride Control, North America, this is the next logical step for ArvinMeritor LVA.
"The opportunity to have Jiffy Lube...as our first distribution customer was very appealing," Malone said. The announcement ended with ArvinMeritor LVA's vow to explore other distribution opportunities within the installer community in the future.
When a manufacturing supplier is looking for "distribution" opportunities within the installer community, then we know Armageddon is upon us! I'm no alarmist, and signing up to supply filters direct to a heavyweight like Jiffy Lube makes perfect sense. But, what does it mean in the grand scheme of how the aftermarket has traditionally operated? For me, it is a simple reminder of what companies must do to be successful in this age of mass consumerism: Companies must be efficient!
Efficiency wins, every time, every place, everywhere. Everything else is for show. If it doesn't add value, it will be eliminated, usually, in short order.
If I were NAPA, would I be scared? Absolutely not. If I were AutoZone, would I be worried? Nope. But the subtle reminder here is that everyone must continuously evaluate everything they do, and find ways to add or enhance unique value. If you don't, others will simply go around you to get to what they want.
I know why ArvinMeritor LVA is selling filters directly to Jiffy Lube, but I don't know why they're supplying other consumable items like paper towels and office supplies. Or, do I?