As ‘The Group,’ Pronto, Federated Combine Efforts for Auto Parts Distribution

As ‘The Group,’ Pronto, Federated Combine Efforts For Auto Parts Distribution

Federated and Pronto have both invested heavily in processes to help members maximize inventory coverage so they have the best availability in the market. Together, The Group is able to provide even better information and our combined resources are some of the best in the business.

Rusty Bishop
Rusty Bishop
Bill Maggs
Bill Maggs

How does your group leverage data?

Maggs: Inventory modeling data has become such an important part of our members’ businesses in so many ways. We work to provide them with as much of this kind of information as possible through the data warehouse and tools that help manage sales and facilitate inventory management. We deliver this kind of information in accurate files to members as a single point for all our supplier partners. We offer CRM software and our new MYAutoAware program that provides a telematics solution for members and their customers. This kind of data is such a huge area of focus today and, working together, The Group has many opportunities to improve and integrate as much of this information as possible to maximize its effectiveness.

Bishop: We have definitely been much more focused on leveraging the kind of data that Bill discussed in recent years. Our new association with Pronto has allowed both groups to utilize this kind of data in a whole new way. Such information becomes more valuable when it can be leveraged across a larger enterprise. We have made great strides with national account management and systems that integrate with professional service provider customers where we share TSBs, specifications and other technical information. Our new improved electronic catalog provides added sales opportunities for members as well as enhanced speed and accuracy. Collaboration has given us many new tools for members and customers and we can see enormous potential ahead.

Is there a magic bullet for parts proliferation? How do you battle it?

Maggs: There are no magic bullets that can replace enhanced data and market expertise. By combining efforts, The Group is able to provide members with better information and systems to analyze sales potential, and we work closely with supplier partners to identify the best options. Our ability to supply multiple levels of demand, vehicle registrations for each market, and national and regional sales data gives our members useful information to maximize inventory efficiency.

Bishop: Federated and Pronto have both invested heavily in processes to help members maximize inventory coverage so they have the best availability in the market. Together, The Group is able to provide even better information and our combined resources are some of the best in the business. Recently, The Group held an IT Summit to talk about areas where we can improve. Our members know their markets better than anyone, so our combined goal is to make sure they have the right tools and information to maintain a competitive advantage in coverage and inventory efficiency.

Are there any categories of parts that are doing better now because the average vehicle age is over 11 years?

Maggs: We are seeing many categories grow as vehicles not only last longer, but are driven many more miles. Because our members sell replacement parts, the aging vehicle population creates more sales opportunities for parts that have longer replacement cycles. Components that may have normally failed once in the life of the vehicle may now be replaced two or three times. Certainly, lines like exhaust and shocks that have an improved useful life are being replaced more often due to the increased vehicle age.

Bishop: Vehicles are built better and are lasting longer and the same is true of many parts. They are better quality and have longer replacement rates. The aging vehicle population has served to offset this trend, allowing our members to see growth in many areas where the components last longer but are replaced at similar rates. Increased vehicle age has helped our entire industry offset the longer-lasting, higher-quality components being installed. This trend particularly impacts business in states with inspections that require even older vehicles to be maintained for safety and environmental reasons.

Are shops taking full advantage of your program group’s ecommerce offerings? Why or why not?

Maggs: There are shops that are always interested in utilizing all the e-commerce tools that are available and others that may be looking for more assistance. We have to continue to evolve to help our professional customers meet the incredible challenges they face. One thing we know for sure is that we all have to work together to make the entire transaction chain as efficient as possible, so we will continue to listen to shops and improve our efforts.

Bishop: When you serve as many different types of customers in many different markets as our members do, you need a broad array of support programs. There will always be varying levels of participation, but overall we are very pleased with the number of shops utilizing our e-commerce tools. One benefit of The Group working together in this area is the elimination of redundant activities and a focus on efforts that support more customers’ needs.

Without divulging proprietary information, describe your group’s inventory strategy for slow-moving parts.

Maggs: A number of our members would probably say their strategy is to have them all available. While that may be aggressive, we believe that availability is a key differentiator between our members and their retail competitors. We have data to help identify the best opportunities to sell a given part number and we are working to become more line common so that we avoid duplications, allowing inventory dollars to go further.

Bishop: With a broad, older vehicle population, the number of slow-moving part numbers has increased and the effort to better manage them has increased as well. We do not have a single strategy but rather offer a number of tools to allow members to tailor their inventory and availability based on the unique needs of their market. Our members have improved logistic and replenishment systems that allow for improved turns on fast items which, in turn, provides the dollars for slow movers.

How do you view new car dealers — adversary or customer? Can you talk a little about that?

Maggs: We definitely view new car dealers as customers. Many of our members have very good relationships with car dealers. Because we support premium name-brand parts that are often supplied by the same company that provided the original part, car dealers are often some of our members’ best customers. We work very closely with our supplier partners to make their products available to the entire market and car dealers are still a large part of that market.

Bishop: If you install parts, we want your business. We definitely see car dealers as important customers for many members, especially those servicing body shops. I agree with Bill that our DNA is top-quality, brand-name parts and full service that provides a real value for our car dealer customers. At the same time, we work hard to provide the same benefits to independent shops so there is a level playing field. It takes the best efforts of the entire industry to satisfy consumers’ needs for fast efficient repairs and service.

What overseas opportunities exist for traditional, American-based program groups?

Maggs: We can learn from everyone and have found that many overseas markets have the same challenges and opportunities that we have here in North America. Last year we joined with ADI to form 1Parts, which allows us to collaborate in a number of key areas, working to constantly improve everything we do. We have found many areas, like shop support programs and processes, where we can learn from each other. ADI has some excellent training programs and other benefits that have been developed, and we share many of the same quality brand-name suppliers. I believe many more opportunities will arise as we move forward together.

Bishop: Since we recently joined the 1Parts organization, we have been impressed with the shared expertise and insight from our partners in Europe. There are definitely many similarities and we feel that that the opportunities to work closer together will provide benefits for our members and customers.

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