Today we are joined by Rusty Bishop and Bill Maggs, who collectively serve as the top leadership of The Automotive Parts Services Group (APSG), the group formed between their two respective organizations, Federated Auto Parts and National Pronto Association. In this interview, they give us an update on year two for The Group and what’s ahead for the organization and the distribution segment as a whole.
We last interviewed you almost exactly a year ago, at which time you were just wrapping up the first year for The Group. Give us a brief update on where The Group stands today and some of the milestones from this second year.
Maggs: Wow, it has been a very busy year and a great deal has been accomplished. We have focused on creating value for our members and finding ways to improve wherever possible. We have entered into some new national account agreements, expanded The Group Training Academy, explored training initiatives with our European partners and pulled off a “combined” member meeting that was in the same town, at the same time, just not all in the same place due to prior contracts. In short, we are finding ways to be better together.
Bishop: Bill is right. It has been a busy year that far surpassed our expectations due to the collective talent involved. We have expanded the sharing of resources, including shared data support, electronic cataloging and the Co-Man warehouse. We have combined some IT initiatives, established a number of new reporting functions and explored new areas of potential collaboration. Our primary focus is to increase efficiency and cost effectiveness while delivering more value to our members, their customers and supplier partners.
In July, it was announced that you were evaluating both new and existing vendor relationships. Does this indicate further combination of efforts between Pronto and Federated?
Maggs: This really just represents an acceleration of our strategic plan. We saw tremendous support from our membership for new supplier programs with a unique focus on the value proposition we are providing. The response from our members and vendors to these initial programs led us to explore growth potential with many other existing suppliers, along with a few new ones. Our combined vision to deliver high-quality brand name parts, backed with outstanding service and support, while addressing changes in the marketplace, has resonated well with all stakeholders.
In announcing the vendor evaluation meetings, Mike Mohler, executive vice president of vendor relations and product strategy, stated, “While premium parts and sales support are still critically important aspects of our vendor relationships, the overall value proposition for the future is evolving…” Tell us more about that statement. What are some of the key changes The Group is addressing as a result of these evaluations?
Bishop: The world is changing and our partnerships must evolve to meet these changes. Today, we see tremendous emphasis on catalog data and other electronic information. We have members who are running paperless systems that require improved product information. We have international members with different needs and requirements that we have to support. The vehicles are more technical and professional technicians need better diagnostic information and training than ever before. Inventory management has become very challenging due to part, model and age proliferation. Speed has become part of the value proposition in everything we do and we have to constantly improve. Partnering with companies who understand this and are prepared to help us continue to evolve in delivering “more than just parts” is critical to our success. The Group is improving the value proposition in many ways under the capable direction of Larry Pavey.
Will The Group continue to maintain the separate Pronto and Federated brands?
Maggs: Pronto and Federated will continue to operate as separate program group members of APSG with their own marketing. The Pronto brand is recognized for delivering quality parts and service and our shareholders have invested in promoting it for many years. We will definitely continue to support it.
Bishop: Yes, Federated has been a leading marketer for many years and our brand has tremendous value. Our members have worked very hard to grow the Federated brand in the marketplace for their customers, as an example with Federated Car Care, and we will continue to support it.
Tell us where The Group stands on being active within the global aftermarket today. What have you learned from your most recent focus groups with global partners? Are there particular regions of the world you wish to focus on or see opportunities within?
Maggs: 1Parts was developed with the goal of finding ways to increase value for members. We have discovered that the potential benefit to all constituents is beyond what we imagined. Last month, a group of Federated and Pronto distributors and headquarters staff toured a number of ADI European locations. This trip included visiting warehouses, stores and shops in six countries, as well as exploring best practices in Europe. We visited a training center and discussed how to better utilize and share technical information and training support. We have already found ways to collectively improve in many areas and we’re just getting started. We have identified many areas of opportunity, including: global marketing, data sharing, shop support, connectivity and training. 1Parts will also be looking to add global members in regions such as Africa and Asia where it makes sense for all parties.
When it comes to the automotive aftermarket and the future of distribution, what keeps you up at night? And, on the contrary, what excites you most?
Maggs: Right now, it’s a pinched nerve keeping me up at night. But seriously, I think the biggest threat we face is keeping up with the tremendous speed of change. We have new vehicle technology, new competitors, new legislative challenges and the list goes on…it’s constant change. However, that is what makes this business so exciting. Working through APSG, talented Pronto and Federated members and our staffs give us an advantage and positive outlook for the future.
Bishop: I agree with Bill. We are enjoying working with Pronto and the areas of opportunity grow every day. With all the challenges that we have in today’s market, it is fortunate to have the APSG team in areas where a joint focus benefits everyone involved. Together, we are very optimistic about the future and, on a personal note, I am gratified to see so many young professionals in both of our groups. We have a great talent pool for the future that will ensure the continued success of our membership.