Tag Archive | "Big D Auto Parts"

Parts Providers Speak Out

When it comes to the parts market, there is no shortage of ideas about how it should be run, but there are some common threads that run through the whole industry. The companies that supply parts to vehicle service contract providers and administrators have built their reputations on delivering the right part in good working order,quickly, and that’s something that doesn’t change no matter who you talk to.

However, the technology that drives that process is constantly changing, and parts providers are adapting. This month, P&A asked several of those providers to offer some insights on the segment and where they think it’s going.

All-Import Auto Inc. is a family-owned business in Texas that has been around since the late 1980s. It has built it’s reputation on providing parts for higher-end vehicles, a niche it has found very profitable. Big “D” Auto Parts is also family-owned and operated, and has been since it was founded in the 1960s. It has chosen to specialize in the VSC market, with an emphasis on being a one-stop shop for all it’s customers’ needs. C&K Auto Parts also serves the VSC market, but it puts a strong emphasis on service. And VRG Automotive LLC is actually a group of recyclers across the country who share a call center, which allows them to route everything to a central location, then ship parts out from the closest facility.

While each company has a slightly different perspective on the industry, there is one common theme that runs through them – technology. The Internet and all of the automated and online processes it brought with it have radically changed the way the parts industry works on every level. And those changes are still happening. All four companies stressed that technology allows them to fulfill orders faster and more accurately, which equates to happier customers.

And the Internet has changed the business in other ways as well – it makes parts available from anywhere in the world, and makes it easy for potential customers to compare prices across a wide range of options. Some parts companies are taking advantage of that shift, looking to become the first place a customer looks, no matter where they’re located in the world; others have chosen to emphasize what else they bring to the relationship beyond price, building relationships based on service and speed. But whichever way they go, all the companies we interviewed are finding success in this new world of parts ordering and management.

To read how each company views the industry and what’s to come, click on their profile below.

Parts Provider Roundup

All-Import Auto Inc.

All-Import Auto Inc.
Keith Sturgeon, owner

Tell us about your company and the products you offer.

All Import Auto Inc. is a seller of used auto parts based in Fort Worth, Texas. We buy and dismantle vehicles and sell parts to auto repair shops and retail customers.

Auto salvage is a family business and I grew up helping out my father, Ron Sturgeon, in his auto salvage company before I started my own as a junior in high school in 1989. I have always been more comfortable working on foreign cars, so I gradually came to specialize in parts for imports.

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Big D Auto Parts

Big “D” Auto Parts
Hugh Pettigrew Jr., owner

Tell us about your company and the products that you offer.

Big “D” Auto Parts was established in Dallas, Texas, in 1963 and has been continuously owned and operated by the same family. We were a full-service auto recycler. Then, in the 1980s, an extended warranty company contacted us looking for a reliable source of alternative parts. Supplying parts to VSC companies is now our largest market. We specialize in used (like, kind and quality) and remanufactured major drive-line components. We also offer most smaller parts.

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C&K Auto Parts

C&K Auto Parts
Mitch Rand, president

Tell us about your company and the products that you offer.

C&K Auto Parts has focused on serving the VSC industry for more than 18 years. Over the years, our product offerings have grown to include a full line of both remanufactured and used powertrain assemblies, the most comprehensive selection of OEM parts (over 21 million unique part numbers) in the industry, as well as a line of aftermarket remanufactured small parts (electronics, brake components, steering components, axles, etc.).

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VRG Automotive

VRG Automotive LLC
Don Partin, president/CEO

Tell us about your company and the products that you offer.

The executive group of Vehicle Recycling Group (VRG) Automotive LLC consists of four owners of some the finest recycling facilities in the country: Nordstrom’s Automotive in Garretson, S.D., G&R Auto Parts in Oklahoma City, Okla., Spalding Auto Parts in Spokane, Wash., and Stricker Auto Parts in Batavia, Ohio. Collectively, they employ over 400 employees and they represent over 200 years in business under the same family names.

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Big “D” Auto Parts

Tell us about your company and the products that you offer.

Big “D” Auto Parts was established in Dallas, Texas, in 1963 and has been continuously owned and operated by the same family. We were a full-service auto recycler. Then, in the 1980s, an extended warranty company contacted us looking for a reliable source of alternative parts. Supplying parts to VSC companies is now our largest market. We specialize in used (like, kind and quality) and remanufactured major drive-line components. We also offer most smaller parts.

How does your service work and how is it different from other parts providers?

Because it is impossible to stock all parts for all cars, we rely on select suppliers to supplement our inventory. Most of the remanufactured units are shipped direct from the factory. However, all of the used parts are processed through our facility. It is our belief that the first impression a repair facility gets when they open a crate goes a long way toward their acceptance and treatment of that part. We check, drain, clean and sometimes paint every part we ship. Since we do not require any action by the shop, we check and often replace seals, gaskets and timing belts. All of the parts we sell have a part-and-labor warranty on the entire unit and that warranty can be tailored to meet the customer’s demands.

Who are your customers? What message would you like to express to them?

We treat a contract holder and a repair facility as though they were our customer. We like to work with VSC companies that are just as interested in a satisfied customer, repair shop, and selling dealer as they are in buying the cheapest part. We are price competitive, but we are more focused on providing good parts and good service which reflect positively on the VSC company.

What channels do you use to sell your services?

We do both online and offline. We’ve done direct-mail campaigns and sent out postcards, and we have placed ads in newspapers and magazines. In addition, we’ve placed banners in online newspapers and magazines, including P&A, and have sent out emails.

But we still get the best results from building a personal relationship with our clients by calling them or by just going out and visiting potential customers and clients. Meeting clients, talking with them, trying to understand their needs and building a personal relationship with them gives us a chance to show them our service and products.

Looking back over the past five years, how has the parts industry changed and how do you see it changing in the future?

Only going back five years is tough, as I think most changes started more than five years ago. One is the increasing availability of aftermarket parts. Another is the reliance on electronics and computers, not only in the parts, but also on the repair side.

What technology or additional services do you believe will drive your future success?

I wish I had some kind of an idea of what was coming.

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Big ‘D’ Auto Parts

1623 E 8th Street
Dallas, TX 75203
T: 800-492-9850

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Connecting Providers, Administrators and Dealers: Parts Suppliers and Inspection Services – Part 4 of 4

In this last installment of our connectivity series, P&A will be exploring the integration of parts suppliers and inspection services into the admin systems of providers and administrators. We will be profiling C&K Auto Parts, LKQ Corporation, Big D Auto Parts, Warranty Inspection Services (WIS) and Carr Appraisals.

For parts suppliers who must maintain large databases not only of individual parts, but types of parts (i.e. new, used or remanufactured), and the inherited legacy of not cataloging used parts with OEM part numbers, integration presents a special challenge. This challenge is that there are several different databases, all of which have different part numbers for the same items, and parts and costs are constantly changing. A more in-depth look at this will come later.

The solution to this problem is not an easy one, but can be achieved. As it currently stands, parts suppliers’ databases are not synchronized with each other and are also not connected with administration systems. This means that the providers have to spend a lot of time searching for one part on several different databases to get pricing estimates. If all of the parts suppliers were connected into one universal database, the process would be seamless for the provider. Ideally, the provider would look up one database where all competing prices are listed under the same part number. After selecting the parts supplier, the provider can then negotiate the desired price for their clients.

On the other hand, the inspection industry is particularly suited to integration because it is far less complicated in what needs to be done and, in particular, it is already far down the road in automation. The data entry portion of the inspection process is relatively high, so the ability to have the administrator’s system talk to the provider’s system can provide significant benefits even with a minor integration. At this stage all that is necessary is for the players involved with this process to make it a priority for this integration to happen.

Parts Connectivity

Considering the challenges required, the goal is to deliver the right part quickly, at the lowest possible price while making multiple parties – the provider/administrator, the dealership, and ultimately the policyholder – satisfied and happy with the result. For the claims analyst and the underwriter to find the part, whether it is a new OEM part, a remanufactured part, or a used part, with availability and pricing information readily accessible, is certainly valuable.

C&K Auto Parts already provides parts and parts value data electronically for both new and remanufactured parts to multiple providers and administrators. The integration has been accomplished directly with the administrators and through software companies the administrators use.

The company has been aggressively pursuing integration for the past two years with a number of projects currently under way. C&K’s in-house IT department has invested heavily in proprietary software that allows customization specifically tailored to meet the particular needs of the VSC industry.

LKQ Corporation states there is nothing preventing them from providing parts data to VSC administrators. However, they question if the client even desires electronic connectivity. If there is a compelling business case to make this integration a reality, LKQ is set up to accomplish it. The simple answer is to upload parts data to the integrator in real-time who in turn would make the data available to the administrators, however…

LKQ’s customers generally like the personal touch of a phone call or e-mail with a parts sales associate. With the very nature of recycled parts’ price fluidity, often changing on a daily basis or even more frequently, and the fact that recycled parts prices may be negotiated by the administrator, it is easy to see why LKQ views itself as “customer centric.”

Big D Auto Parts faces similar challenges with electronic connectivity. Again, the company values the interaction with claims personnel. If a particular part is not in stock, many times they are able to locate one from an associate or up sell to a remanufactured part that has not shown up in their inventory. Further, each claims office, and more specifically each claim, has different requirements pertaining to parts condition, shipping and warranty. Each of these requirements has to be considered when pricing an item.

Big D, like many parts recyclers, maintains an inventory management system hosted by a national organization. Inventory is part of an electronic data base that is online and available free to everyone. “It is great when working with individuals, however, when working with professional claims adjusters who have specific parameters for each individual claim, the ‘one size fits all’ philosophy does not work very well,” states Hugh Pettigrew, owner of Big D.

To summarize, the issue is not whether part providers are utilizing databases. They all are. And they can be connected to electronically on an individual basis. The challenge is to create a universal database where there is some referencing commonality and where everyone is connected.

Inspection Connectivity

For WIS, the inspection process can be broken down into a few different components: the initial setup, the expected ETA of the inspector on-site, and the inspection itself (broken down into the verbal report, written report, photos/videos and any computer data relevant to the inspection). Each component is possible to automate and integrate to a certain extent, depending upon how far the administrator wants to go.

As suppliers to this industry, WIS explains, as much as the company would like to believe they are central to the administrator’s daily operation, they cannot forget that they are an extra, a service that is common but not essential to the administrator’s prime function. As such, it is vital for them to do whatever they have to do to make it easy for the administrator to use their services. WIS have worked extremely hard and have invested significantly in connectivity and integration, as they believe it will be impossible to remain a significant player in the industry without it.

The feedback that WIS has received over the past two years has convinced them that there will be an expectation of integration capability going forward. It has been beneficial in every respect, although it does present a new expense to the provider. The administrators who have integrated have always been large enough to have their own IT staff, whereas this expense is a significant one for most small providers.

Carr Appraisals contends that the 100 percent automated transfer of all inspection data (from initial assignment through the return of inspection findings/written/photo documentation) through external integrations would streamline the inspection process. Obviously, the quicker the exchange of all information the quicker the claim resolution, which translates to greater customer satisfaction not only for the administrators, but the policyholders as well.

The benefits of external integration and connecting the inspection process with the administrator are evident, but have not yet been fully realized. When compared to the level of internal integration present in our profiled inspection companies, there is still a long way to go. A summary of the level of internal connectivity utilized at Carr Appraisals is indicative of what most inspection companies are already doing today.

Currently all stages of the inspection processes between Carr Appraisals and the inspector is 100 percent automated. Inspectors access inspection requests assigned to them from the company website, then they post corresponding written reports and photos to the web. Their inspection invoice is included in the report they uploaded to the web, which is automatically processed for payment every two weeks and paid via ACH/auto deposit for the most part—some inspectors are old school and still prefer paper checks delivered via U.S. Post Office, but even this is as automated as Carr can make it. Inspectors use digital cameras, some more expensive than others. Photos via a cell phone are not acceptable in most cases as there are flash issues and lack of zoom ability.

All forms and guidelines required to perform inspections are available for download directly from the web. Carr communicates on a mass basis directly with inspectors via an “announcement board” on their website —clients are also privy to these communications. The company notifies each inspector of impending inspection request assignments by direct contact, cell phone, pager, text, or email (this varies depending on inspector capabilities and preferences). Inspection assignment completions are tracked utilizing similar methods. Each inspection request assigned to the company website automatically gets the appropriate online report format (mechanical, tire/wheel, pre-purchase, etc…) attached, as well as an individual invoice.

With this level of detailed internal connectivity, the natural evolution would be for bi-directional data transfer between inspection companies and administrators: data entry to the inspection company and completed inspection reports back to the administrator. As we will see, this may be easier said than done.

Stumbling Blocks to Integration

Adaptability is a major stumbling block to integration, whether you are a parts supplier, inspection company, or provider/administrator. There is not much that is “standard” in this business. Each administrator has their own needs and each one does business a little bit differently. There are many different software platforms that they use and most have been customized over the years, so it is not possible to create a simple plug-in, off-the-shelf, integration program.

Used parts present a unique challenge for integration. George Laurie, national sales manager for LKQ explains, “Unlike new parts, recycled OEM part suppliers generally do not inventory parts utilizing the OEM manufacturers’ original part numbers. We believe that most integrators are currently using an MSRP parts database for new OEM parts. Therein is the challenge. Recycled parts suppliers use different software. Recycled parts are bar coded with an inventory number, VIN, part description, part condition and year, make, model part interchange information; but not the OEM original part number.”

Even if used parts were inventoried using the OEM part number, there is still the issue of price negotiation. Perhaps a system where used parts availability and pricing is made available online using OEM part numbers to accurately locate the part would solve the cataloging issue. Then, if necessary, the personal touch could be implemented when it comes to pricing. An alternative could be an online parts bidding mechanism in place of the personal contact, but that may change the dynamic beyond the comfort of the suppliers.

The “easiest” integration is accomplished through third-party integrators like F&I Admin or StoneEagle using an API interface – a web service that allows the push and pull of data. There can be different levels of connectivity, e.g. inspection request versus the return/availability of inspection reports and photos. The latter would most likely be accomplished via a hyperlink, as it is probably not very cost effective for two separate systems to store reports and photos.

“Easiest” integration does not translate, however, into a painless understanding between the parties as to who will bear the cost of the integration. Inspection fees have remained mostly constant over the last 10 years, in spite of the increased costs borne by the inspection companies for web services, digital photography and photo transfer from the repair facility. Third-party integrators have indicated that they cannot pass on the cost of inspection connectivity to their customers (the providers).

Without sacrificing the overall quality of an inspection, inspection companies are willing to accept their fair share of costs associated with providing “added value” for their product through technological advances. Participating in the cost for a third-party integrator to provide connectivity to an administrator, who at the end of the day benefits the most from the integration, may be too much for the inspection company to bear when one considers their already stressed margins.

The answer is for administrators that do not currently communicate through API’s to consider doing so. L’Tonya Carr of Carr Appraisals states, “Carr Appraisals has had the ability for external connectivity since 2001 [web service with an API interface for standard mechanical inspections], and I suspect other major inspection companies have this ability as well, but not one of our clients utilize that format for auto data transfer.”

In Conclusion

A common theme throughout this series has been the distinct awareness among the profiled companies, and the providers, administrators and dealers they serve, that the path forward is paved with improving communications at all levels.

A universal database for OEM and refurbished parts should be available. Used parts create a significant challenge for the industry and that database would take a lot of work on everyone’s part. However, integration of inspection services is just a matter of time.

There is no doubt that our industry is fully engaged in an integration revolution. In fact, for many, the metamorphosis from legacy processes to state of the art electronic processes has been agonizingly slow. The good news is that with forums like P&A Magazine, VSCAC, Industry Summit, Agent Summit and the newly formed F&I Providers and Administrators Association (FIPAA), the industry is now able to more openly examine and discuss the challenges we all face and begin to chart a path forward in a healthy community atmosphere.

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