Sioux Falls, S.D. -- As the automotive parts and service industry becomes increasingly competitive and margins narrow, access to timely information on how to fix the vehicles and identify the correct parts can have a significant impact on whether the repair is profitable for the shop or its supplier, said Automotive Warehouse Distributors Association (AWDA) Chairman Tim Sturdevant, president of SAE Warehouse. Located in Sioux Falls, SAE Warehouse serves 42 Sturdevant's Auto Parts operations throughout South Dakota, North Dakota, Minnesota, Iowa, and Nebraska, Sturdevant said, as well as 60 independent auto parts stores. The company is a member of the National Pronto Association and is celebrating its 75th year in business, he said. The company was founded by his grandfather and still employs his father and brother, as well, he added.
"Keeping the professional installer busy with good information on how to repair the vehicle is very important," Sturdevant said. "I'm a firm believer in 'Right to Repair' in order to guaranty good, accurate diagnostic information to troubleshoot with. Equally as important is good cataloging information so that once the shop has identified the problem, they get the correct part the first time."
Sturdevant said that a lack of information, or errors in that information, carries a high price for shops and the distributors that serve them. "One of the biggest costs of doing business in our industry is returns," he said. Among the causes, he said, are shops changing parts rather than diagnosing the problem, the wrong parts delivered because of cataloging errors, and parts that are falsely returned as defective because they are unneeded but otherwise not returnable, such as an electrical component that when swapped out proved to not be the problem.
Inaccurate cataloging information can result in parts that are in stock but not being sold because they aren't listed, the wrong part being listed for an application, or telling a customer that a part must be purchased from a dealer even though it is available in the aftermarket, Sturdevant said.
"We utilize Activant cataloging, but we have also developed a bunch of other tools to help us find the right part," he said. For instance, he said, the company has developed a separate cataloging system for its body panels, which are not listed by Activant, and has developed indexed searches that help determine very quickly which parts are available for a specific application.
"We might have four or five different products that will match that search," Sturdevant said. "It reminds the salesman to offer the other product lines and to check the paper catalogs if the computer is saying the part is not available.
"This business is about having good, trained people with the right technology to get the right parts for our customers," he said. "This is such a knowledge-based game that having tools that our employees can use is very important."
Electronic cataloging and the Internet have helped improve cataloging and access to all types of information, Sturdevant said, but added that there is a long way to go. "There will never be a perfect cataloging system," he said, "but we are a long way from where it could be."
Industry-accepted standards such as the Product Information Exchange Standard (PIES) and the AAAIA Catalog Enhanced Standards (ACES) are a significant part of how the industry is improving the tools it has available, Sturdevant said. PIES is the industry standard for the management and exchange of product attribute information such as size and weight, while ACES is the standard for the management of automotive catalog and vehicle data.
Sturdevant said that standards for the OE technical information Web sites would be an excellent way to improve their benefits to the industry by making it easier for technicians to navigate the sites by ensuring that they have a similar look and feel. "I've been an open-systems guy since the early 1980s, and that's why I believe in those standards," he said. "Our systems need to be able to communicate."
SAE Warehouse uses the e-Part cataloging system from Autolog for repair shop, farm, and fleet customers to access the company's inventory, Sturdevant said--Activant for Sturdevant Auto Parts stores and AIS for independent jobbers that are locating parts. The combination of products allows customers at all levels to have easy access to SAE's inventory, he said.
SAE also ensures that its store managers are motivated to build relationships with the shops and carefully oversee customer service by inviting most to share in the rewards by owning a 25 percent stake in the store they run. "We want the person in that store to have an interest," he said. "They are involved in their communities and invested in the business."
The managers focus on customer service, while many of the back-office functions such as accounting and payables are handled by the company's headquarters, Sturdevant said. "This allows them to be heavy on customer service, and we save them hours on the back end by paying bills and things likes that. The strength is in the knowledge and the people and those local relationships."
Another key element in SAE Warehouse's strategy is providing quality parts at a fair price, Sturdevant said. The company's focus has long been on name-brand parts, he said. "We are pretty loyal," he said. "We don't sell many 'white box' parts. For instance, we probably sell nine to one Wix filters to low-cost options."
The push in recent years from offshore manufacturers continues to reshape the market, Sturdevant said. "The quality of the parts being manufactured offshore has improved to the point that they are almost as good, or sometimes even better, than domestically manufactured parts," he said.
SAE continues to do business with most of its same name-brand producers, he said, but other low-cost options "helps put pressure on them to get us products to keep us competitive." The competition is forcing prices down throughout the market, he added, which is also compressing margins for suppliers and shops, affecting profits.
"A quality Moog suspension part that's been improved from OE may cost you $50 and have a $10 margin," Sturdevant said. "If you have another part option that is $30, do you still have that $10 margin? Probably not."
Sturdevant said that while most consumers may not ask about brands, many technicians and shop owners have a brand preference that they feel comfortable staking their reputation on. With the influx of new, quality offerings, though, shops must trust their distributor to bring them quality parts that are price competitive, he said.
"I think brand loyalty is breaking down somewhat as the quality of these other products has improved," Sturdevant said, "so it becomes a question of their trusting us. We take that seriously. The quickest way (for a manufacturer) to get kicked out of our warehouse is to have troubles with their products."
Distributors are also being forced to find new profit centers to continue growth, Sturdevant said. In recent years, he said refinish supplies and collision repair parts, including sheetmetal, headlights, and mirrors, have been one of the areas of growth for his company. The company still has DuPont mixing banks in some of its stores, but the majority of the business is handled by three refinish supply centers located around the company's territory. The specialized refinish centers allow the employees to be very knowledgeable on the products, he said.
While collision repair shops account for most of the sales of those parts and materials, Sturdevant said the availability has also been seen as an opportunity by some mechanical repair shops to offer replacement mirrors, grilles, headlights, and other nonpainted parts to customers.
Sturdevant, almost two-thirds of the way through his tenure as AWDA chairman, said he has focused his efforts on many of the same subjects he has promoted for years, including open systems, improved cataloging, and information availability, but he said he stills believes the biggest benefit from belonging to AWDA, or any association, is the networking it offers.
"I became involved about 20 years ago with the AWDA University and have gone to some great classes and have learned many strategic things that benefited our company," Sturdevant said, "but a lot of what I have learned has been through networking with the people I met through the group. I think the best knowledge you can get comes through interacting with other successful businessmen and women."
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