Wednesday, 25 July 2012 16:55

State Farm and PartsTrader Defend Parts Program, Questioned about Benefits to Shops

Perhaps the most interesting question at the latest Collision Industry Conference (CIC) came at the end of a 2-hour discussion regarding PartsTrader, the electronic parts ordering system State Farm is requiring its Select Service shops in four markets to use (see related cover story).

Denise Caspersen, the collision division manager for the Automotive Service Association (ASA), asked State Farm’s George Avery the same question the association first posed to the insurer formally five weeks earlier in a press release, namely, what benefit, financially or operationally, does required use of PartsTrader offer shops?

“If State Farm is not able to clearly demonstrate the benefits of this pilot application to the repair community, then this application should not move forward,” ASA’s June 12 press release stated.

While Avery skillfully addressed most of the questions and comments about PartsTrader during the CIC meeting in San Antonio, Texas, he acknowledged State Farm did not yet have an answer for Caspersen as the insurer is still evaluating feedback recently obtained from the 158 shops in the pilot program.

“I don’t know the best way to answer that yet because I don’t believe we have all (the shop feedback),” Avery said. “And we are implementing changes in the pilot  that now puts me in a position of needing to go back and ask, ‘Now after that change, what are your results?’ So it’s sort of a fluid process. I’m not sure how to answer your question yet, although we will respond when I have an answer. But at this point I don’t have much.”

Avery and PartsTrader CEO Rob Cooper each spent about 15 minutes at CIC explaining the reasoning behind the program and offering a demonstration of how it works. Avery said his company was surprised that 17 Select Service shops in the Birmingham, AL., market dropped the program without trying PartsTrader, a decision he felt could be have been based on some of the inaccurate or misleading information he’s seen in press releases and blogs.

Cooper reiterated that shops control which vendors have an opportunity to offer price quotes, and that shops can even use the system to order parts directly, bypassing the quote process. He said now that vendors in some of the test markets are becoming familiar with the system, the minimum bid time will be reduced from one hour to 30 minutes. He said that—along with improvements in integration with the estimating and management systems—will improve the efficiency of using the PartsTrader system.

George Avery to chair CIC
George Avery was named as the next chairman of the conference. He becomes the 16th person to chair the quarterly gatherings of shops, insurers, automakers and vendors, since its inception in 1984. His first meeting as chairman will be next January 23–25 in Palm Springs, Calif.

In explaining the choice of Avery, which is made by those who have previously chaired CIC, Jeff Hendler said he and the other past chairs look for someone who has the skills, experience and CIC involvement to “direct CIC in the fashion it needs to be directed.” He said such qualifications are more critical than the candidate’s employer as that can (and has, at times) changed during a chairman’s 2-year term.

“We’re not choosing companies. We’re choosing people. And I think we’ve chosen a great one,” Hendler, who serves as the CIC administrator but was also its chairman in the late 1980s.

Avery acknowledged the timing of the announcement at the same meeting at which he faced strong criticism for his company’s pilot test of PartsTrader made it somewhat of “an awkward day.” But he asked CIC attendees to keep in mind his reputation of being approachable and an active CIC participants.

“I know we don’t all agree, but I’ll leave you with this: You can’t shake hands over the phone. And CIC is an opportunity where those with whom we disagree have a chance to shake hands. We have some spirited discourse, of course, which I think is healthy, but it’s something we work through together, and I hope you see and will support my desire to move CIC forward as a place that everyone can come together and express their opinion and make the industry better.”

Avery is not the first insurance company representative to chair CIC. Joe Landolfi holds that distinction, chairing the conference in 1995 and 1996 at which time he was an executive with Kemper Insurance. Roger Wright was working for CARSTAR when he began his term as CIC chairman in 2003, but joined AIG Insurance several months into his term.

Avery will succeed Mike Quinn, who also had an employment change during his term, joining Caliber Collision Centers this year after selling the consolidator his chain of Arizona-based shops.

Quinn will reside over his final CIC meeting as chairman on October 31 and November 1 in Las Vegas.

John Yoswick, is based in Portland, Oregon, who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). He can be contacted by email at jyoswick@SpiritOne.com.

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