Last year in this magazine we bemoaned the noticeably poor WD and store attendance at the Aftermarket eForum, an annual industry conference dedicated to exploring technology and its application in the industry. The majority of the technology presented and discussed at the eForum generally centers around the efficiencies that can be gained between manufacturer and distributor. We felt then, as we do now, that WDs and stores stand to gain the most by understanding technology and how it can be best applied to their businesses. But that’s not enough; you have to go out and actually apply it. That scares a lot of people.
As I watched this year’s eForum, I was struck by the noticeably higher percentage of distributors in the audience. I hope this is a positive sign that the techno-fear is starting to wane.
To those of you who don’t believe that technology can improve efficiencies, I submit to you a statistic from Scott Luckett, the Automotive Aftermarket Industry Association’s vice president of information technology. According to Scott, data errors on basic product information cost aftermarket suppliers and distributors $1.7 billion.
There are some notable uses of technology in the industry, such as the Aftermarket Auto Parts Alliance’s Data Warehouse, O’Reilly’s PartnerShip Network, AAIA’s Product Information Exchange Standard, MISG’s TransLink and others. Even AutoZone’s Scan-Based Trading, a.k.a. Pay on Scan, is a technology-based initiative. These companies say they are using technology to find efficiencies and fine tune distribution. What they are really doing is finding money. As margin gets whittled away, it has to be found somewhere.
Regardless of these initiatives, when I walk into most jobber stores, I still see bar codes on product (but no ability to scan them), inaccurate and incomplete electronic cataloging resulting in an unhealthy reliance on paper catalogs that every manufacturer (and distributor) would love to jettison, dial-up modems that are just too slow to allow real-time inventory and skewed overall inventories that create false demand, resulting in an over-packed distribution pipeline.
Oh, technology is out there, but I fear it’s about five years removed from inventory cards. We are playing with Ataris when we could and should be playing with XBoxes.
We are like anyone else, afraid of those things we don’t quite understand, afraid of putting money into something that doesn’t have an obvious payoff. Technology is not like a soda machine; you don’t get a Coke right away after inserting your quarter. It takes time, and its efficiencies are notoriously difficult to monitor and measure. But wouldn’t it be great one day to be able to scan products, rather than punch in those numbers that seem to get smaller with each passing year? Or wouldn’t it be helpful to be able to look up any part in the system knowing that even the newest parts in the channel will be in there – with accurate numbers and up-to-date inventory information? Or what if you could finally clear that catalog rack off of your counter and add more inventory to those back shelves that currently function as a catalog library?
All this will happen someday. It will just take time – and technology.
