Driving may be getting safer—thanks in a big way to collision-avoidance and other new motor vehicle safety systems—but accidents still happen and purchasing replacement parts for modern automobiles is still a mainly antiquated affair, executives in the auto parts industry say.
“When you look at cars, collision-avoidance systems, autonomous driving—it’s all great things, cutting-edge technology,” says Keith Burtram, a senior manager at Tonkin Parts Center, a major West Coast supplier to collision repair shops of original equipment auto parts from several automobile manufacturers. “But the supply chain lags behind; even now, some parts come in our door that aren’t even barcoded. We’ve had barcodes since the 1970s, but many suppliers are still not up on it. We have to key in the product codes manually into our inventory system.”
That kind of dated supply chain technology, he and others say, frustrates many players in the business of buying and selling auto parts. The problem hits particularly hard in the collision repair industry, where auto body shops—including many that operate as part of large chains—face competitive pressure to quickly find and order the best mix of products from original equipment manufacturers, or suppliers of aftermarket or reconditioned parts, to provide repair cost estimates to customers and their insurers. And as modern auto parts get more sophisticated, such as with sensors built into front and rear bumpers, it becomes even more crucial for repair shops to find and install the correct parts for each vehicle.
Steering toward more sales
Leigh Guarnieri, national collisions marketing manager for Honda and Acura automotive brands at American Honda Motor Co., the North American subsidiary of Japan-based Honda Motor Co. Ltd., says American Honda has studied how to provide better service and increase sales to collision repair shops. “One thing we’ve learned is that they’re busy—some doing hundreds of cars a month—and they’re the one that has to deal with the insurance company and fix the car properly,” he says. “They need to quickly choose the right parts while writing an estimate.”
Now, American Honda, Tonkin Parts Center and other suppliers say they’ve discovered a better way to interact with collision repair shops that saves shop managers time and hassle—and puts the suppliers in a better position to generate sales. They’ve signed on as users of the CCC Parts online trading system from CCC Information Services Inc., which provides an online portal service where parts suppliers, including original equipment manufacturers and providers of aftermarket or recycled products, can share wide-ranging inventory purchasing options with thousands of collision repair shops.
For American Honda, which began working with CCC Parts last year, the new online venue has “exceeded our expectations” for winning more business, Guarnieri says. American Honda, meanwhile, has signed up nearly 1,000 Honda and Acura dealers on the CCC Parts platform, and those dealers are already connected to more than 14,000 collision repair shops. “We signed up 800 dealers in the first six weeks,” Guarnieri says.
Comparing product quality and prices
The collision repair shops also use CCC Parts to connect with some 350 insurance companies for information on what a repair customer’s insurance covers. As they prepare repair estimates, shop managers can view available fenders, engine hoods and other auto body parts from multiple suppliers that fall within the product specifications and spending budgets set by insurers. They can compare the mix of product quality and pricing for each job as they search among original equipment certified by vehicle manufacturers, aftermarket products and products that have been reconditioned and recycled.
Exposure on the marketplace has enabled some dealers to sell more product lines to repair shops, says Darren McGettigan, business development manager for Fred Beans Parts, Doylestown, Pennsylvania. Among his customers, “at least 10 to 20% have started purchasing additional lines,” he says.
Underlying the CCC Parts platform is CCC One, an enterprise resource planning system from CCC Information Services that coordinates and integrates information from insurers, parts suppliers and a collision shop’s own accounting software. “We provide integration in the background, so the shop owner just uses one online window to manage information and perform multiple tasks,” says Jim Kinsherf, vice president of the OEM business at CCC Parts.
CCC—which says its ecommerce platform processes about $13 billion in auto parts transactions annually—provides databases of information on historical records of vehicle damages and repairs, helping repair shop managers figure the cost of parts and labor required for specific types of collision work, Kinsherf says.
CCC earns its revenue by charging subscription fees to suppliers for listing their products, but doesn’t publicize its rates.
The road to electronic ordering
There are other technology applications for connecting buyers and sellers in the collision repair industry, but none that have integrated with the shop management software systems that the industry already uses, Burtram says. “There have been several shots from different companies at developing an electronic ordering platform,” he adds, but they’ve typically had voids in connections to both buyers and suppliers. The systems still required much manual entry of available product information, for example, between a parts-ordering platform and a shop’s business management system, he says.
CCC Parts has addressed such problems by integrating its order platform with the business management software products—including Reynolds & Reynolds and Dealertrack—that support many repair shops, he adds. “It’s integrated into the product that repairers already use,” Burtram says. “They don’t need to learn a new tool to do business with us, they simply view and purchase from our live inventory. We’ve seen significant sales increases since we started using the CCC Parts solution.”
The CCC Parts platform also provides ways for suppliers to compete online with promotions. Suppliers, Kinsherf says, realize that for any collision job, a repair shop manager may decide to use a recycled or aftermarket part if he thinks it offers better value than a product from an original equipment manufacturer.
An ‘open playground’ for competing sellers
Auto manufacturers, who have long promoted their OEM products as the best option for repairing one of their vehicles to maintain quality, rely on networks of their brands’ dealers to sell those products to repair shops. But dealers must compete with parts distributors and merchants who offer alternative products, including aftermarket or recycled items, as parts suppliers try to make deals with collision shop managers preparing repair estimates for vehicle owners. All of these options are available through CCC Parts. “CCC Parts is an open playground,” Kinsherf says. “It lets the market decide which parts get used.”
For American Honda, CCC Parts offers a way for it to promote its original equipment products to dealers and collision repair shops during the critical repair-estimating and product-purchasing process, Guarnieri says.
“Honda and Acura genuine collision parts are the only choices designed and tested for proper fit and crash performance by American Honda, and it’s critical that collision repairers see that they’re also price-competitive,” says Bruce T. Smith, senior vice president of American Honda’s Parts, Service & Technical Division. “CCC’s reach, along with the ability to put a promotional price upfront, are game-changers with better and more targeted results than we’ve achieved in the past.”
When can I get that car hood?
Without the portal, the collision repair shop manager would have to make several calls and send faxes to multiple suppliers, trying to compare available product offers. “That’s time-consuming back and forth, and a body shop may work on 200 to 300 cars per month,” Guarnieri says.
When a collision repair shop manager is using the CCC Parts portal to find the best mix of products and prices to build a project estimate for a Honda or Acura vehicle, they can view the latest promotions available from American Honda as well as other suppliers. “Now all the information is on the portal screen,” Guarnieri says. When a shop needs to replace a car hood, the screen may show six options, including original equipment, aftermarket, reconditioned and salvaged parts, with the expected delivery time as well as price, he notes.
“They can not only see if we have it in stock, but see the lead time for how fast they can get it,” Burtram of Tonkin Parts says.
The portal enables American Honda and other suppliers to present their best products, prices and delivery times on the screen, while letting the repair shop manager choose the parts for a particular repair while writing the job estimate.
American Honda uses this system to promote its “conquest” programs, which provide dealers with pricing to help original equipment products better compete against their typically lower-priced aftermarket, reconditioned and other options. The car manufacturer also works with parts dealers to provide next-day delivery of products.
“What we’re trying to do is making it easier for the body shops,” Guarnieri says. “It’s a way for us to remain competitive.”
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