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Several repairers said Parts & Materials Committee was ignoring the real issue: lack of free market choice.
The Parts & Materials Committee reported at the last Collision Industry Conference (CIC) in July on the progress of its electronic parts procurement survey. But members of the audience accused the committee of ignoring the “elephant” in the room: lack of free market choice.
The proliferation of electronic parts ordering was first identified as an issue by the committee in January of 2011. A survey of collision repairers was then conducted in November of that same year, and the results were reported in January 2012. The feedback the committee received suggested a more comprehensive survey was needed.
At the July meeting in Boston this year, the committee announced it was working on putting together a simple “matrix” to help collision repairers identify all the different parts procurement programs on the market and each of their features so they could compare them. But several audience members said the committee had jumped ahead too fast and should have first had a discussion about some of the issues vexing the industry.
“As a shop owner from Boston, I think the committee is missing what is being said here,” said Chuck Sulkala of Acme Body & Paint in Jamaica Plains, Mass. “I understand that you’re trying to put a matrix together, and I think it’s very important, but the fact is if we don’t have the free enterprise opportunity to utilize the matrix to determine what we’re going to use, what good is the matrix?”
Randy Stabler of Pride Auto Body in California expounded on the free enterprise aspect of the parts procurement debate: “The difficult question is, how do we allow free market forces to create a tool that is most efficient for the industry and allows body shops and insurers to choose the tool that allows them to reduce their operating costs and create internal efficiencies? We don’t have free market choices with the direction parts procurement engines are going.
“Electronic parts procurement engines are necessary tools, but how can we get the free market forces and get the external forces out and let the people who want to make a parts procurement engine build the best tool and let the marketplace decide which one is best for it rather than being forced to make a decision?”
Added Aaron Schulenburg, executive director of the Society of Collision Repair Specialists, “To Randy’s point, I don’t think this touches on what we need to talk about. I don’t think there is anything wrong with the survey, and the questions are appropriate, but we’re missing one of the more important initial parts of that conversation.
“For more than a year now, this committee has been asked, at least by individuals of this body, that we need to have a very serious discussion about the entry to market – that free market competition – and it keeps being avoided, frankly. So I think the committee may view that [the matrix] was the charge to go down this road, but there is an obvious avoidance of the very real discussion about that free market and how these [parts procurement programs] are coming to market. I think we need to have that discussion before we take the stance of, well, they’re here and they’re expanding, so let’s just ask how they work instead of discussing why we’re seeing some of the things we’re seeing.
“To be honest, we’ve seen sales pitches on particular programs and yes, there were some opportunities to respond and ask questions, but we’ve never had an actual industry discussion via this panel or CIC at all about this issue. I think the committee is missing the boat.”
Tim Adelmann, executive vice president of ABRA Auto Body & Glass, took issue with one of the questions on the survey on whether repairers agree or disagree that parts procurement tools are here to stay.
“I think the question needs to be, does the system interface with multiple management systems? Also, are the parts procurement tools real-time? In other words, do I have to write an estimate and ship it off to various suppliers, only to get information back that is the most cost effective to rewrite the repair plan? Those steps don’t add any value to the process and slow the whole repair process and customer experience down.”
Chris Northup, co-chair of the committee, said the issue is very complex and sensitive and believes the industry deserves a “drill-down,” which is one of the objectives the committee has.
“We just have to make sure we have all the constituents fairly represented and make sure it’s not a commercial platform for any one entity but a fair and open platform,” said Northup. “We all want to support a free market system and choice, but we have to table-set or level-set this discussion so we keep it in the framework and objectives of CIC.”
After a vote from meeting attendees, CIC Chairman George Avery concluded that a panel discussion should be held at the upcoming November CIC at the SEMA Show before the committee moves ahead to build the matrix. But he advised the committee to continue with their work and have more information at their disposal for the next CIC.