In the age of computers, you’re either a "PC" or a "Mac" person. I’m a PC person, and I’m currently typing out this column on my Dell laptop. In fact, Dell is the world’s top supplier of branded, personal workstations with a stunning 50 percent share of the worldwide market. When it comes to PCs, Dell is king.
A recent Continental Airlines magazine article included a look inside some of the strategic vision going on at Dell. In the article, Dell’s Senior Vice President Jeff Clarke explained, "When we started, the workstation market was 90 to 95 percent proprietary. (Most manufacturers) were designing their own microprocessors…and building very proprietary machines, then charging a great deal of money for them." According to Clarke, Dell saw an opportunity to lower that cost by working with standardized microprocessors and operating systems to create a workstation that ultimately turned the market "on its head." Clarke concluded by saying, "It was the beginning of standardization in (our) marketplace."
Dell’s commitment to forging good partnerships and developing products has been based on open, rather than proprietary, standards; it’s been the key to their success. This brings us to the automotive aftermarket, where proprietary standards are the norm. In our market, a sense of hyper-competition has fed a desire to differentiate from both a product and service perspective.
Once upon a time, consumers accepted standardized product offerings from car makers. Those standard platforms, across several nameplates, also helped the aftermarket parts industry. In the 60s and 70s, it was quite common for 5-10 percent of a parts manufacturer’s total product offering to represent 80-85 percent of the applications on the road. Over the course of time and economic expansion, American consumers became more empowered and desired more product differentiation from the car companies. And, not just the Big Three, but foreign nameplates as well.
Continuous differentiation of product, for more than a period of 40 years, has forced our aftermarket parts and service industry into a state of uncontrollable proliferation. A mere 18 years ago, a typical aftermarket parts WD stocked some 60,000 individual SKUs. Today, that number easily exceeds 250,000. Globally, there are more than 1,000 models of passenger cars and light trucks produced by some 83 different nameplates! Add to that the fact that there are more than 750 different computer configurations on vehicles in service today, and soon you begin to realize the massive information management challenge our industry faces. Standardizing our industry’s technological languages, parts descriptions, packaging descriptions, cataloging and identification semantics and supply chain logistics (among other things) is a very noble cause – and an overwhelming task. But, it’s what must be done. Unfortunately, it doesn’t receive near the amount of collaboration, cooperation and investment of resources it so desperately needs. Quite frankly, many people, in very high places, controlling many resources just don’t "get it."
Vision steers markets. It also reveals opportunities and sparks capitalism and entrepreneurialism. Just ask Dell. From where I sit, if our industry doesn’t come together on the issue of information standardization, across all segments and levels of the market, it will reflect a serious lack of "vision" on our part. Dell saw standardization as a way to forge a long-term, sustainable competitive advantage. Now that’s "vision."
