I often wonder if selling auto parts is really what I do. There are times when so much of our efforts are focused on how we get the parts from factory to technician that we can’t help but think we are more of a logistics company that just happens to sell auto parts. This was not always the case.
I remember the days years ago when we made zero deliveries to our customers. The “you want it, come and get it before I close the door” business mindset was the norm back then; but, it was doomed to cease. Capital constraints on adding inventory, part number proliferation and market complexity created a new paradigm and in a fairly short window of time, we went from no deliveries to customers to unlimited hot-shot deliveries faster than Domino’s, Papa John’s or your neighborhood pizza joint. That’s right, folks, parts delivered quicker than pizza no one back then would have guessed this one!
To achieve this level of speed, everyone in the industry has had to become an expert on logistics. The truth is, we are not alone in this unending race to be the fastest to market. Last November, during one of the best AAPEX education conferences I ever attended, we learned that 40 percent of the U.S. economy goes through distribution channels! Using the North American Industry Classification System (NAICS), professor F. Barry Lawrence, Ph.D., has concluded that a significant portion of our total economy is handled through distribution. Lawrence is the director for the Industrial Distribution Program and the Global Supply Chain laboratory at Texas A & M University. At his seminar, Lawrence gave an eye-opening presentation on what he calls the “cost to serve,” where our customers must be constantly gauged in an age of shrinking margins. You guys know what I’m talking about customers demand lower prices, but better service and faster deliveries.
I’m a sales guy. All this logistics stuff was dumped on me, but when you are being outsold by guys who do it better than you, you better learn how to move those parts fast and learn we have. One core lesson about logistics is that you need several tools to get the job done, and technology will always be a big part of the solution. Out of just one distribution point I manage directly, we utilize more than 11 different “channels” to get parts in and out. On the way in, parts come on steamships, barges, planes and brown UPS trucks galore. On the way out, we use our own fleet of trucks, three different courier companies, two messenger service companies and UPS; and, I almost forgot, we also do pickups and will call! This is a lot to manage. Every member of our team needs to be engaged at all times in order for all these gears to turn in unison, and when they do, it’s a thing of beauty.
Trusting third parties with your deliveries is not a easy thing. For years, I figured no one can do it better than me, so why do I need a logistics vendor? The demands of the market soon made me realize the solution was in finding the right partners. Today, some of the local couriers, along with national logistics companies like UPS, have ensured we are able to sell parts by being able to deliver them faster. It’s no longer just about price and availability speed to market is now a key differentiator, too. Customers have a lot to say about it, too, and you need to hear them; if they love UPS because UPS provides that killer service on “the last mile” to the customers, then you need to create the right partnership between the shipping company, your company and your customers in order to provide tailored deliveries on demand.
If you gave me a choice, I’d rather be a great salesperson than a logistics genius; but I have to admit I’m in awe of some of the logistics experts I have met in our industry. I feel like I can go head-to-head against the best salesperson out there, but if I’m competing against someone who is better at logistics than me, I’m scared. Truth be told, competitors can make you better, and I thank all of them who were better than me at logistics, for they made me change and see the light; I promise to keep up with you every step of the way!