As I mentioned in previous columns, I’ve conducted more than a dozen meetings bringing together collision repairers with regional wholesale parts managers for one of the automakers. The key goal: to give both sides of the parts purchase transaction a better understanding of each other’s perspective, and a clearer understanding of how the parts processes work between all the various stakeholders.
In the most recent of those columns, I shared some of what collision repairers said loud and clear about what they are looking for in a best-in-class OEM wholesale parts vendor. When they decide who to buy parts from, what are the most important considerations? The list invariably included:
• Acceptance of electronic parts orders.
• Good inventory. Getting the right part quickly can be just as -- or even more -- valuable to a shop as the discount.
• Knowledgeable, helpful staff.
• Accurate ETAs. Shops said some vendors receiving electronic parts orders may not input the actual estimated time of arrival. The system may default to an ETA of the next day, when in fact that has not been researched and verified by the parts vendor. As I said in my previous column, it is critical that wholesale parts departments understand that collision repairers make decisions based on parts availability. These decisions impact the shop’s employees and customers, their relationships with insurers, their productivity and their bottom line. Accurate communication is critical. If it were possible, shops would love to have the ability to know the part availability at the warehouse.
• Ability to scrub parts order by VIN.
• Prompt pick-up of returns and processing of credits. If parts are returned because the vehicle turned out to be a total loss, and the vendor can’t accept the returns without a parts return fee, shops said they can bill the insurer for that parts return fee.
• Email confirmation of orders received.
• Full and complete orders, with no “orphan lines.” Let’s say a body shop orders eight parts, but the dealership sends them nine, perhaps because of a supersession. If the shop is electronically ordering parts, and electronically receiving invoices, there’s not a place for that orphan line to go. Tell the shop you’re sending an extra part so they can update the estimating system and have a place to receive all the items in that order. Again, it all comes down to great communication.
• Consistent delivery windows. Having drivers arrive at the shop within consistent windows of time each day helps shops plan production. I’ll discuss the issue of shops that have inefficiencies and fail to perform 100% disassembly leading to multiple parts orders in a future article.
• Accuracy of order fulfillment and billing. Most shops said they would like to receive credits back in 48 hours or less.
• It would be great whenever possible to have parts invoiced in sequential order to match the shop purchase order in the management system.
• Shops say it would be useful if a vendor can provide a monthly report showing their percentage of return parts for the month (excluding core charges).
And yes, a “fair discount” always made the list. But I assure you, in meeting after meeting, among shop representatives from all types of shops, all around the country, “fair discount” was never the first expectation mentioned, not ever considered the No. 1 demand. It was usually the fifth, sixth or seventh thing that made it to the list.
The best discount in the world doesn’t matter, for example, if the part is wrong or it takes forever to get the part. I’m sure there are parts vendors reading this and thinking, “Mike, you don’t understand. All my shop clients care about is price or discount.” I promise we will address this in a future article.
Lastly, for any insurers or automakers reading this: Shops are just as frustrated as parts vendors at having to use multiple platforms to order parts. I’ll go into this more in a future column, but here’s a not-uncommon scenario one shop owner recently shared with me about the wasted time these multiple parts systems add to what should be a simple process.
Step 1: He wrote an estimate for a job that was going to require four parts, including a headlight. His estimating system’s parts locating system -- we’ll call it Parts System 1 -- showed available parts, and he selected parts from that list.
Step 2: As a direct repair shop for an insurer that requires the use of another parts system -- we’ll call it Parts System 2 -- he dumped the estimate into that system and waited for bids to come back. For the headlight alone, that system found 45 options, so he went through that list to find the best options.
Step 3: Back in the estimating system, he deleted the previous headlight and entered the one from Parts System 2. By that time -- which happened to be the following morning -- the estimating system had refreshed its system and so presented new headlight options, including one that was less expensive. He went back into Parts System 2 to document why he was choosing the headlight from Parts System 1.
Step 4: He then scrubbed the estimate for compliance, and that report has its own parts search that has nothing to do with the Parts System 1 search. That identified a headlight that’s even cheaper, so once again he deleted the headlight and added the latest one found, again documenting within the systems why all these choices were being made.
Step 5: With the estimate written to comply with insurer requirements, he then sent the estimate to Parts System 3, one that’s required for the relevant automaker’s certification program. That system identified new OEM parts that match all the pricing on the earlier parts found, but to accurately reflect what is being done to the vehicle, he has to delete all the previous parts found and re-enter all the price-matched parts from Parts System 3.
Fifty minutes later, he said, he could finally order the parts. In that amount of time, he said, he could have blueprinted another job. This scenario happened every single day. This is ridiculous. We need to work together on a solution.
I hope at least one person in the insurance industry will reach out to me to better understand the impact of this and how much this delays things for shops and customers. We are stepping over $100 bills to pick up pennies. There is a better way.
Next time: I’ll share what shop owners should understand about what makes them a good customer for a dealerships’ parts department, and what shops and their parts suppliers can do together to each improve their business.
Mike Anderson