BodyShop Business recently interviewed Wade Hilburn, co-founder, president and CEO of Original One Parts, to discuss the parts supply chain and the strain COVID-19 has put on it.
BSB: What has been one of the biggest challenges for collision repairers during the COVID-19 pandemic?
Hilburn: One of the biggest challenges shops will face is procuring parts as the business ramps up faster than the supply chain can manage. During the shutdown, there were several factors impacting the immediate availability of parts: OEMs shutting down or converting to producing PPE, and the shutdown of import parts coming out of China.
The industry was already in a transition process before the pandemic, partly due to the gradual transition to electric and hybrid vehicles and partly due to changes in production with the accelerating introduction of new technologies.
Fortunately, although the supply chains have been disrupted, the demand over the past few months has also been less. Therefore, it has not been a major problem for repairers – yet. But as business ramps up, it will take some time for the supply chain to catch up.
BSB: What kind of light has COVID-19 cast on the global nature of supply chains in today’s world?
Hilburn: In regards to buying from U.S. companies, this recent pandemic has opened a lot of people’s eyes to the risks of relying on global supply chains for everything from medical supplies and pharmaceuticals to car parts. Today, 80%of the world auto supply chain is connected to China. Obviously, the shorter the supply chain, the more reliable and less risk. I think there will also be more sentiment to support U.S. businesses as we all work to help boost the recovery of our economy.
BSB: With more and more emphasis on following OE repair guidelines today, how does that play into collision repairers’ part choices?
Hilburn: Shop owners are often caught in the middle trying to satisfy insurance carriers while also meeting OEM guidelines. The insurer will often write aftermarket parts in an effort to keep costs low, while the OEM repair standards require an original equipment part. The solution can be a fully refurbished OE part. Not only does that ensure proper fit and quality, but it can meet the cost parameters of the insurer.
It’s smart to have a multiple-source strategy for parts to maintain your cycle time as well as your repair quality. You want your source for new OE parts when that is requested by the customer, your partner for refurbished parts to meet insurer and OEM guidelines, a local source for salvage parts for older model vehicles or the customer is self-paying and on a budget. The last resource is uncertified aftermarket parts manufactured overseas, which have become a less favorable alternative.