Tag Archive | "C&K Auto Parts"

Inspections – Crisis or a Change of Perspective?

There has been a lot of talk over the last couple of years about independent inspections for the extended service contract industry, and as Jeff Frazier pointed out in the comments to Don Larsen’s article on the industry in December 2013, there have been relatively few voices doing all the talking. I suspect the main reason that more people haven’t been speaking up is that the industry is actually healthier than some of the conversation would lead us to believe and that we are all in it together. We all feel the same pressures, see the same risks and are working toward the same goals. I see the same issues that Don Larsen enumerated in his article and L’Tanya Carr brought to the forefront before him. The differences are that I do not see the situation as a crisis and I do not believe an industry-wide inspector certification program is necessary.

We, like Carr Appraisals and others, do hundreds of inspections per day, tens of thousands in a year and our customers are very happy with the results they receive. We take the job of providing fast, accurate, reliable reports very seriously. Have some of our favorite inspectors retired? Of course they have, which is why we must constantly recruit and train new ones. Do our customers want faster results, more customization and an ever-increasing number of inspection types with no increase in cost? Sure they do, so we must continue to invest in technology to meet their needs.

With the continual advancement of technology, computer integration between administrators and agencies is a huge benefit. As our systems “talk” to each other, mistakes are minimized and time is reduced in multiple areas. Our clients are very interested in the time it takes to obtain information from the inspector. Being able to upload reports and pictures from the repair facility is a big plus. If an inspector is able to take a video (with audio in some cases) instead of a still picture to demonstrate to an administrator excessive movement in a particular part, or to let them hear a particular noise – these are things that just were not possible years ago and will only continue to improve the process.

Don Larsen is absolutely correct to point out the importance of integrity in the claims adjudication process, and independent inspections are an integral part of that process. It is also correct to point out that waiting for a certification program to come along and eliminate any business issues that exist is not a recipe for success. Our approach is to talk to our customers and inspectors in an effort to constantly improve. For example, we had a recent inspection report that did not fully address the concerns of the adjuster. When this situation was brought to our attention, we reviewed the particulars with our team and our customer and realized that the assignment had been sent to us in a very confusing manner. Our assigning team had not done a good enough job clarifying the assignment for the inspector and our customer had not done a good enough job providing a clear assignment in the first place. The matter was resolved with procedural changes on both ends, fixing that specific problem and making sure it doesn’t happen again. We don’t need an additional layer of cost and bureaucracy to solve issues that arise; we just need good relationships and communication.

Our job would be easier if all of our customers wanted their inspections done the exact same way, using the same type of language, requiring the same pictures and the same reporting procedures. But they each have their own reasons for wanting things done their way, and our job is to make it happen. There will always be different schools of thought on adjusters taking their own verbal reports versus having the inspection companies do that job. There will always be some companies that require a signature page while others don’t want one. No certification program or industry cooperation will change that. We can, however, have very productive discussions about best practices and how to avoid any issues. Let’s shift the focus from discussing what’s wrong in the industry to what we do right, and let’s make sure to do it the right way every time. The first step in this process is opening communication by building strong relationships. I look forward to building relationships with all of you at the Industry Summit in September.

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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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C&K Auto Parts

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.).

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

Our business approach has always been to stress service over all else, from making it as easy to quote an order as it is to submit and complete a warranty claim. Our feeling is that anyone can have the cheapest price, but excellent service will keep the customer happier in the long term.

We have worked very hard, and invested significantly, in both technology and expanded warehousing. We’ve used technology to allow quicker, more accurate quoting to our customers, both when our in-house staff is interacting with the customer and through better websites and integration, which allows the customer to search for the part themselves in a variety of ways. And our expanded warehousing allows us to deliver a large percentage of our powertrain parts within one or two days, which improves customer service and saves our customers a significant amount of money by lowering their rental expenses.

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

Our target market has always been the VSC administrator. The message might seem clichéd, but it’s true in our view: The customer is always right. From the beginning, we’ve structured C&K to customize as much of our service as possible to the needs and requests of each individual customer. Our warranties are designed to mimic the exact legal language in our customers’ contracts with the vehicle owners, and the warranty lengths are flexible to the point of being as long as the administrator needs them to be. Our IT department can integrate with whichever computer system is being used by the administrator. And since our product offerings are so varied, we can essentially be a one-stop shop, which also saves our customers time in locating the right part.

What channels do you use to sell your services?

We market our services directly to VSC administrators, and try to maintain a visible presence at VSC industry functions and conventions.

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

As the automotive industry was hit by the recession, the bankruptcies of GM and Chrysler, and the slow recovery, the parts industry has become much more competitive. In addition, the VSC industry has matured in its approach to procedures and processes, and technology has come to the foreground.

Providing parts to this industry requires a few key steps, once you have made the list of acceptable suppliers that are able to provide quality parts and stand behind warranties: quickly and accurately quoting both a price and availability, delivering the part quickly to the repair facility (which can be anywhere in the U.S. or Canada), and making sure that the part is correct. Five years ago, it was a time-consuming process that involved handling each quote request individually and numerous phone calls to verify both inventory and shipping times.

Through our use of technology, we are now able to do more than 35 times more daily quotes, and they are much more accurate. In the future, we see more of the same. Technology is simply becoming more pervasive, and every new general advance can be targeted and customized even more.

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

Integration and automation go hand-in-hand with our vision of C&K’s place in the industry. The more that can be done by a computer behind the scenes, the faster and easier it will be for the claims adjusters on the front lines to get their jobs done quickly and accurately. Focusing on this has become one of our major goals, and our IT department is growing very quickly.

Expanding our product offerings is our other focus. Advertising and marketing are industries unto themselves, because getting a new customer is one of the most difficult things to do in business. Once you have a customer calling you, it makes sense to make sure you have the product that they want or need. They are calling you to spend money — you better have the product to make the sale.

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An Interview With Mitch Rand, President of C&K Auto Parts and Warranty Inspection Services

Growing from a source for auto parts at a discount for his own 10-Minute Oil Change and Full Service Garage over 18 years ago into one of the industry’s leading auto parts suppliers and inspection businesses, Mitch Rand, president of C&K Auto Parts and Warranty Inspection Services shares an informative Q&A with the readers of P&A Magazine this month.

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

I believe I have a unique perspective on the industry, in that I am the president of two major vendors to the VSC Industry, one on the parts side of the business and the other on the inspection side of the business.

C&K Auto Parts (C&K) has been a supplier to this industry for over 18 years. In 2008, we partnered with a private equity company which has allowed us to invest in and significantly expand our business. We now carry all types of parts, from OEM parts for all manufacturing lines, to remanufactured assemblies (both large and small), to used powertrain assemblies. Our warranties are all inclusive (we cover shop labor rate, book time, diagnostic time, rental etc.) and flexible. We will vary the length of our warranty to fit the Administrator’s need for a specific contract. The idea being that the Administrator can purchase one of our parts and feel completely safe knowing that they will not have to revisit that claim again during our warranty period. Since our warranties are so comprehensive, it is incumbent upon us to make sure that the quality of our parts is of the highest standards, and our failure rates are as low as possible. We do extensive monitoring of our failure rates to identify as quickly as possible any recurring failures, and take appropriate steps to correct the problem. Failures are the absolute worst thing that can happen to us – not only do they cost money, but every failure causes multiple phone calls to the Administrator, delays for the installer (who might be a selling dealer), and frustration for the vehicle owner – all of which reflect poorly on C&K and could ultimately result in lower sales. On the positive side, after 18 years of steady growth, we seem to be doing a good job.

Warranty Inspection Services (WIS) is our inspection company. We started WIS a little over eight years ago, at the request of a few customers who had commented that they wished their inspection providers were as responsive as we were at C&K. We simply took the ball and ran with it from that point. This business was particularly challenging for the first few years, in that most every other major inspection company had been around for a long time and offered virtually the same service. We spent a long time trying to figure out how to differentiate WIS from everyone else, short of simply offering inspections for a few dollars less. We finally decided that technology was the answer, and we invested a significant amount of money into developing a proprietary tool that allows the inspectors to provide a faster, more accurate inspection – which are the two touchstones that are most important to the Administrators. One of the additional benefits of this investment into the IT world is that we are in position to do direct integrations with any Administrator to help facilitate easier, faster, more accurate data transfer. Every minute that is saved by an Administrator is another minute that their adjuster can be on the phone with a customer, improving the Administrator’s service level, and often improving their bottom line. It’s obviously a benefit to us, as well.

How does your product offering differ from other providers?

In both of our businesses our goal is to help our Administrator customers in every way possible. This means helping them save money, operate efficiently and make their customers, selling dealers and installers happy.

C&K – Our OEM Parts Portal allows the Administrators to verify not only the List Price, but see their wholesale cost, on every OEM part that they are getting quoted. It saves a huge amount of time, by not requiring the adjusters to call or email for part quotes, and it saves an enormous amount of money by providing them with a negotiating tool on virtually every part, and the ability to purchase every part from us if their negotiations are not successful.

We have also been investing heavily in warehouse expansion. Shipping to the coasts quickly has always been a difficulty for the suppliers in our industry. We have recently opened warehouses in Tampa, Denver and Salt Lake City, and have more planned openings for 2012. We fully expect to be able to deliver any remanufactured powertrain product, which is our bread and butter, anywhere within 1-2 days. Not only does this improve customer service, but also it saves a significant amount of money for the Administrators in rental expense. Additional rental expense has always had a negative effect on our sales potential, effectively reducing the amount of savings that we can provide vs. the OEM option. Expanded warehousing will result in more savings for the Administrators, more sales for C&K, and improved customer service to both the installer and the contract holder – everyone wins.

WIS – We’ve developed a proprietary system that we call VeriScan, which allows our inspectors to essentially copy the information in a vehicle’s on-board computer, and upload that information along with digital photos, video, and the written report while on-site. This has had a tremendous impact on the speed and accuracy of our reports. VeriScan allows us to be different – and better. One other difference between WIS and everyone else is that for years, the inspectors were expected to provide all of their own technology – they bought their own cell phones, cameras, computers, etc. When WIS decided to develop VeriScan and made it proprietary, we felt that we couldn’t expect the inspectors to pay for something that they would only use for WIS, so we decided to provide both the hardware and the data plan to the inspectors for free.

Who are your target markets and what message would you like to give them?

Our focus for most of our history has been the VSC Administrators, although we do work with certain large dealer groups around the country. Our overall message has always been one of flexibility. Every customer, even within the same industry, has unique concerns and needs. If GM, Ford, or any of the OEMs wants to make a major policy change, and they want to be rigid in its enforcement then everyone generally has to dance to their tune. However, we’re not quite that big – and I think one of our strengths is that we recognize that. It’s our job to adapt to the needs of our customers, and recognize that the adage that “the customer is always right” is, in fact, true. If I have a customer that wants a red stripe painted down the side of their transmissions, I will do my best to make sure that we use the brightest red paint possible. There are a lot of businesses, including some of our competitors that have a different philosophy. They think it’s important to do things the way that they think is best. I respect their position, but I disagree with it.

Tell us about yourself and how C&K Auto Parts came to be.

My brother and I started out in the automotive industry in the early 90’s, in South Florida. We owned a 10-minute oil change and a full service garage. We started C&K primarily to supply parts to our own garage at a discount, and sold some parts to some of the other garages around town at a discount. One day a vehicle came into our shop that had an extended warranty contract from US Warranty. We’d never heard of an extended warranty before, but since it was a local company we went up to meet them, and started a wonderful relationship that we have to this day. One thing led to another, and we started to supply parts for them to other repair facilities in the area, the relationship grew from there. Shortly thereafter, an adjuster at US referred us to another warranty company that she had worked for, and we started doing the same thing for them. At that point, the light bulb went on, and I started to research other warranty companies around the country, and sent out some letters introducing C&K to them. A few weeks went by without hearing back, and on the same day, within about an hour, I got called by the managers of Geico and GE Capital. We started to work with both of them (and still do), and we quickly decided that this was the niche that we’d been looking for. We sold our garage and concentrated full time on C&K, and have grown from there. It was just the two of us at the beginning, and now we have about 30 employees.

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

The last five years have been by far the most challenging years since we got into the business. Not only because of the Great Recession but the industry has grown up and become much more sophisticated. 18 years ago, I could get an Administrator to try us with a quick phone call. There simply weren’t too many companies doing what we do, and our service was needed. Now, every Administrator knows the game, knows our competition, and has certain expectations. There are industry standards of service, if not explicit then at least implicit, that they expect. And after so many years, they may have developed loyalty to the vendors that they’ve been using. To get a new customer today, it’s not nearly enough to simply introduce yourself – you have to be able to show why your service will make them better. This has forced us to evolve, and we are continually evaluating and offering new products and services, improving our IT capabilities, expanding warehousing to improve delivery times, refining our inspection processes (both from a technological perspective and from an internal systems perspective), and generally trying to distinguish both of our companies from our competitors.

I see the industry becoming much more dependent upon technology, specifically integration with their vendors. If one adjuster has to spend 10 minutes submitting an inspection request and copying and pasting a completed inspection report into the Administrator’s computer, and a different adjuster simply has to click one button and have it done automatically, who is more efficient? It’s a no-brainer, and that example can be used in a myriad of situations, with both parts and inspections. Time is money, and integration saves time. It also eliminates a lot of human error. As this is the direction that we see the industry going, we’ve gone from simply outsourcing our occasional IT needs to having a rapidly growing IT department, with numerous programmers giving us the tools that we feel will help us stay ahead of the curve. It’s better to have the competition react to you rather than playing catch-up, and it’s better for the customer in the process.

What products do you believe will drive your future success?

Simply offering the widest range of products possible. I like the idea of becoming a one-stop shop. The more a customer uses us, the less likely they will use someone else and become happy with their services. A big part of business is simply getting the adjusters to get into the habit of calling us. Once they call us, we need to have what they need.

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

Direct integration with our customers is the key. The customers that give their adjusters direct access to our products through their claims software have a much greater ability to save time and money handling a claim. Once a customer recently told me that since integrating with us his adjusters save 15 minutes per inspection between ordering the inspection and consuming the results. If you multiply that across every inspection and every part, the savings really add up. We have just reached the tip of the iceberg in terms of integration. We are working on integration through the leading claims software providers in the industry and we are able to provide much of the required IT services for one-off integrations as well. As we help the administrators succeed at their tasks of saving money, operating efficiently and making their customers, selling dealers and installers happy, we will find success as well.

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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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C&K Auto Parts

P.O. Box 35693
Richmond, VA 23235
T: 800-981-7358

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