Delivering innovation, exceeding expectations
Omaha, Neb.—Wholesale Parts Director Mike Merrifield and his team sat down in 2012 to develop a brand-new wholesale parts delivery business model. The fact that this was something new for the Woodhouse family of dealerships was viewed as a positive instead of being seen as a hurdle they would need to jump over in order to be successful.
“We asked ourselves what kind of business we wanted to create,” Merrifield said. “We were not tied to any kind of legacy programs, so we had an opportunity to give our customers a brand-new experience unlike anything they had seen before, and that is what we have built upon for the last six years. Our foundation is providing consistency, parts availability, and multiple lines delivered on one truck. The success of that system is what has gotten us to where we are today.”
Today, the Woodhouse Wholesale Parts Association has grown at an average rate of 28 percent year-to-year since 2012. That growth has warranted multiple expansions in product offerings, facility space, and delivery area, and has also led to new opportunities of which the parts industry has not seen before, he said.
“We started with our original warehouse in Missouri Valley, Iowa, of about 28,000 square feet and now we are at 50,000 square feet. We have expanded our delivery area into north central Iowa, South Dakota, and into the northern tip of Missouri. This expansion for delivery area was made possible because of our daily deliveries and a consistent schedule which was something our customers were not receiving beforehand.”
He added that they have doubled the amount of routes from 2012 and are now running 24 delivery vehicles every day.
The associated dealer parts offerings from Woodhouse has grown to a network of more than 20 manufacturers since 2012. Merrifield likens the Woodhouse delivery system to an event as opposed to just another parts truck showing up at a customer’s shop. “We can offer many different manufacturers’ parts on one truck and turned it into an event for our customers. This allows them to base their production and their needs in the shop for the day based on our truck arriving, instead of constantly being interrupted by trucks coming from different vendors. It creates a more consistent level of work for that shop overall,” Merrifield said.
The primary source of success has come from wholesale collision parts sales. Throughout the past six years, though, opportunities have presented themselves for expanded offerings in the mechanical department as the associated dealership numbers grew. Overall, inventory has grown from $4 million in 2012 to more than $10 million with room to grow looking into 2019.
Merrifield and his team developed and fine-tuned a number of processes since the inception of their wholesale delivery department, which included moving from numerical-based inventory to commodity-based and an internally designed software program that tracks all wholesale parts, which ensure parts are picked, pulled, and loaded properly. “This logistics program was done so well that Dealertrack has actually adopted it as their baseline for what they offer to other dealerships nationwide,” Merrifield said.
The success of the Woodhouse business model has not gone unnoticed as Merrifield shared that several manufacturers have reached out to them directly over the last several years. “We have had a few manufacturers that have seen the success of our collision parts business and have asked us about applying that to the mechanical side as well.”
It was through inquiries such as that and a series of events, which has led to a partnership never before seen in the automotive industry, he said.
“In November of 2017, I attended a seminar on lean processes in the warehouse which was put on by GM. During that training I became acquainted with a group that was looking at starting a pilot program that would incorporate ACDelco parts distribution with existing GM dealerships. After seeing how successful we were with our business model, they decided that we would be one of seven dealerships in the country to try to make this work.”
Woodhouse will now be one of the first dealers in the country that will also operate as an ACDelco WD alongside their existing parts program. “This is a separate entity. We want everyone to understand that. The new business is called Woodhouse Parts Direct and will be based out of Omaha. It will be a new delivery system and will not disturb any of our existing routes. We do not want to throw a wrench into what we have done there,” Merrifield said.
Over the last year, Merrifield and his team have brought in a full line of ACDelco inventory, which will be available for delivery. “We have established an internal delivery network within the Woodhouse family of dealerships, and we’ll have a network of new drivers and trucks who can pick up mechanical parts from each location. They’ll provide a full line of OE mechanical offerings to go along with our new ACDelco stock. Initially, this will be for Omaha and Lincoln area customers as we get things going with the intention of taking it to the next level as we evolve,” he said.
The addition of Woodhouse Parts Direct will necessitate the hiring of around 20 new employees including drivers, warehouse staff, and parts ordering professionals.
Merrifield added, “The parts business is changing and so are we. Our goal with this new business is to provide consistency throughout the day, just as we have done with our existing delivery program. We want to eliminate the false expectations that some customers have due to the promise of ‘hot shot’ deliveries and come at it from a different angle. The inventory is closer to our customers and can be provided to them with the intention of making their shop more productive. Our motto is simple, ‘To provide an experience that exceeds their expectations.’”