Aftermarket Problem Solver Series
Solutions to Industry Problems through
Root Cause Analysis (RCA)
PROBLEM: Too Much Time Between Availability & Salability
By: Jerry A. McCabe
September 22, 2008
Problem…
More than 90% of parts sales in the aftermarket are facilitated by electronic parts catalogs (EPCs). The typical length of time between a new part becoming available for sale and its first appearance in third party provided EPCs is 60 to 150 days. This deficiency costs aftermarket manufacturers millions of dollars each year and drives business to OE dealers.
Solution…
North American manufacturers can take charge of their own destinies by forming a broad coalition to produce and “distribute” their own leading edge, Web-based EPC that can be updated on a daily basis if need be.
Premise…
Everyone in the independent aftermarket stands to benefit if aftermarket manufacturers’ reference data becomes available to the market substantially faster than it does today. If new part numbers and extended (carry forward) coverage are published more quickly, service technicians will be able to purchase those parts from aftermarket suppliers rather than from OE dealers. Likewise correcting data errors more quickly will result in reduced returns and elimination of stranded part numbers. Quicker data flow would increase revenue, reduce costs, keep loyal customers away from OE dealers and help improve the quality of customer services across the channel.
Aftermarket EPC providers have made substantial improvements in technology and functionality over the past 25 years, but their lack of speed to market continues to hamper our industry. Similar distribution channels (including HVAC, plumbing, office supplies, industrial products and electrical products) have demonstrated how much better EPCs can be managed. The extreme time lapse in getting manufacturers’ POS data to the counters and shops of the aftermarket has been the subject of complaints for years and has undoubtedly cost aftermarket manufacturers and resellers hundreds of millions, if not billions of dollars.
Use of eCats is high at the aftermarket store level (over 90% of all look-ups as mentioned above), but many are still “green screen” formats with product information limited to little more than application data and pricing. Use of eCats at the point of installation is much lower (estimated at less than 50% of look-ups) and the breadth of content is not what it should or could be. But what if manufacturers coalesce and agree to create and maintain their own comprehensive database of parts information and a lookup utility? And what if their solution is Web-based and free of charge? Such an approach could enhance eCommerce activities at all levels and push lookup and validation of parts out to where it is most effective—the service dealers in the independent aftermarket.
We need manufacturers to take responsibility for and regain control of their own point of sale (POS) data. Technology adoption, closer collaboration with EPC providers and greater focus on critical product data can lead quickly to a relatively simple solution to a seemingly complex set of problems that elicits complaints from virtually everyone using third party EPCs to sell parts. In fact, the concept is so simple that many people may have difficulty understanding its true value. It mitigates or eliminates many of the problems facing today’s aftermarket, using technology and process changes to continually improve efficiencies.
Unchecked evolution has made the broad adoption of electronic parts lookup and ordering in the North American aftermarket much more fragmented and difficult than it needs to be. A manufacturer funded and led initiative to provide a better approach to EPC will offer everyone in the aftermarket an opportunity to realize the full efficiencies that electronic commerce represents.
It is helpful to have some understanding of how we got to where we are now…
Aftermarket Cataloging History: A Brief Overview
EPCs were introduced to the aftermarket in the late 1970s by independent service providers (ISP). They became the “middlemen” in the exchange of parts and application data. Prior to that catalogs were paper-based and manufacturers had full responsibility for their catalog data and its distribution. The process generally went something like this: Identify and research OEM applications via microfiche: document “carry-forward” coverage and assign new part numbers as needed; get samples and have new parts reverse engineered; have engineering and purchasing people provide information to use in a make or buy decision; and pass the file along to the purchasing people; add the part number into the process to get it cataloged (often done by making notations in a “master copy” of the most recent printed book; on a regular basis (usually annually or bi-annually) take the master copy to a typesetter (who typically was also the printer.) Manufacturers had their catalogs printed and then distributed through the supply channel, hopefully all the way to the service dealer.
While EPCs eventually changed that model profoundly, for the first few years not much changed for aftermarket manufacturers. They went through the same general process with one significant difference. As soon as their catalogs were printed copies would go to the ISPs for input (keypunching) into their proprietary systems. Yes, in the early days of the EPC the paper books were available in the field before their electronic counterparts. Through the years technology changed, processes were changed and manufacturers figured out that you could not “evolve” a paper-based system into EPC…you had to buy or create an electronic system that also would generate output for paper catalogs.
By the 1990s some of the recipients of data who had leverage with suppliers were able to use their influence to get manufacturers to submit data in electronic templates. This led to one of the electronic catalog pioneers, Profit Pro, to donate its data template to the industry (APAA at that time) to use as a standardized template for the electronic submission of application data. This was the first industry catalog data standard and it is known today as AAIA Legacy. The standard slowly gained ground and today it is estimated to have an adoption level of over 90%.
In an attempt to make the standard more pervasive, AAIA spent much of the early part of this decade negotiating with all data receivers to embrace a new standard built around a relational database called Aftermarket Catalog Enhanced Standard (ACES). With ACES the aftermarket has a catalog standard embraced by the majority of data receivers both public and private. But while the market has embraced the ACES standard, many of the commercial and private EPC’s still have proprietary, unique architectures. The primary problem is the existence of multiple vehicle configuration databases that are in use by the various EPCs. While ACES is a “definitive standard” for a vehicle configuration database (the ACES VCdb), as of this writing no commercial or private EPC functions in a native ACES environment. That means receivers must “map” data from the format it is received in (even when that is ACES) into their proprietary format. It is not uncommon at all for errors to be introduced in the translation process. Briefly, that’s where we stand today.
Market Impediments That Require Action
Today’s EPC providers present two market impediments that must be addressed if the aftermarket is to optimize benefits of electronic parts lookup and related eCommerce activities.
1.Data and error corrections are too slow in reaching the marketplace.
Currently it takes EPC service providers anywhere from 60 to 150 days to get manufacturers’ updates to market. This includes time to “map” data from industry standard formats in which manufacturers submit it into the proprietary formats used by commercial eCats. Additional time is required to run validation routines, burn the data to discs and mail them to users. While some commercial eCats are capable of Web-based data distribution, many of their customers have not updated to Web-enabled systems.
Equally problematic is the delay in fixing data errors. A process that should be executable virtually in real time can take months. If errors were few and far between this would not be the problem that it is. Unfortunately the errors are many and one on top of another. There are two basic drivers behind this issue: 1) Poor data management practices and a reluctance to invest in technology on the part of many manufacturers; and 2) Mapping errors and wrong “fixes” that are introduced by well intentioned ISPs as they validate and translate the data into their own native formats.
While many aftermarket suppliers have sophisticated systems and procedures for managing their product inventory, most are far less structured and process oriented when it comes to managing their product data. A surprising number are treating the function the same as when they used to output only paper catalogs. That creates myriad problems when outputting data into electronic formats.
Another key problem for many manufacturers is the existence of multiple points of entry into their data files and the ability for multiple parties to change data at any time. Think about the enormity of maintaining 60 to 90 (or more) data fields for a few thousand SKUs. Then add to that several people in various departments of a company with access to the data and differing views on how it should look.
Manufacturers need a systemized process for creating and distributing product and application data. The process must include where and how it is kept, as well as establishing who within the organization is responsible for its care and handling.
This approach will place a much higher onus on manufacturers to create and maintain their data appropriately. Too many today have haphazard data practices. Too many are relying too heavily on third parties to assure their data’s accuracy. In the supplier owned EPC environment, manufacturers will have to step up and place much more importance on this critical function. Really good operators will make sure their upper management is more involved in the care and feeding of their data. In the long run this will benefit the market since no one has a greater interest in the timeliness and accuracy of data than its owner.
The second major contributor to inaccurate data is translation errors that occur when mapping data from one system to another. As explained earlier, there is a significant issue with the multiple vehicle configuration databases (VCDb) that are in use throughout the market. While ACES is the definitive standard VCDb, today it is not the native format for any commercial or private EPC that we know of. Everyone who is receiving data in ACES format currently must “map” that data into their proprietary format. The subtle difference in how each system “defines and describes” a vehicle type can lead to data errors any time a translation is made.
Some commercial EPCs view fixing data as a central part of their value proposition. They routinely talk about the shoddy quality of the data they receive and the quality assurance process they put it through to make it work in their electronic formats. Compounding the problem of errors introduced through well intentioned efforts is the fact that the changes they make often are not communicated directly back to the creators of the data.
To effectively and efficiently clean up data errors will require a quicker means of getting feedback to the data owner and then a quicker method of getting corrections posted. The data owner is in the best position to determine if a reported error is indeed an error and to take appropriate action. Better communication is critical to ratcheting up the quality of aftermarket application data.
2.Not enough data is getting to market, and not enough of what is getting to market is making it down to the service dealer level.
In addition to the problematic time lags cited above there is a significant amount of “other” data that is not getting down to the service bays, or in some cases is not being made available to the market at all. In some recent, reliable research, techs said they believe that manufacturers have valuable data that is not easily accessible. Still, techs depend heavily on manufacturers’ websites to augment their needs for information. A recent study by NCMA showed that upwards of 60% of techs rely on manufacturers’ websites to find current information they cannot get elsewhere.
One limitation in getting this data into the bays is the limited architecture of some EPCs. Some have too few data fields to fully describe aftermarket product attributes in the standard format. These attributes, commonly called PIES for the Product Information Exchange Standard developed by AAIA, require up to 75 fields. Some EPC’s have as few as 15 fields and consequently cannot accommodate product attributes beyond the application. Since the commercial eCats form the primary method by which data is passed down the supply chain from distributors to jobbers, to installers, much of this data never gets out into the market.
Additionally, some commercial eCats are built on older platforms and lack the capability to include pictures and diagrams. As parts proliferation grows, so does the variation in parts appearance. This is making graphical data more essential in helping the installer identify the right part. Not having graphical capabilities is limiting this selection process and adding to the returns problems.
Convergence of these issues has created the need for an industry driven solution to allow for the broader adoption of electronic parts lookup and ordering, especially at the service dealer level in the aftermarket.
In spite of widespread support for the AAIA standards, there still are about 20 major private and commercial platforms being used in the aftermarket today. This requires manufacturers to be able to export their data in several different formats and left unchecked the problem could grow more complex in the future. Commercial EPC providers are losing market share to “privatization” as successful resellers identify the catalog area as a bottleneck that can be fixed with a proprietary approach. On the other end of the spectrum the problem is exacerbated by resellers who choose not to invest in new technology but to continue doing business with antiquated, green-screen systems.
Ever increasing parts proliferation combined with the demise of the career counterman clearly has put the installer potentially in the best position to look up and specify the parts needed for a job. Use of the term “potentially” is meant to recognize the overall dearth of full, rich and accurate data being made available in a timely fashion.
Something needs to be done. Historically most aftermarket practitioners have looked to (and even expected) manufacturers to take point on addressing these types of industry issues.
The Supplier Owned EPC Solution
It is time for manufacturers to face the reality of the situation and create a supplier owned EPC. Such an initiative would require only three pieces of technology and a governance/oversight body.
The technology components would be 1) a standards-based look-up utility, which is connected to 2) a common shared database populated with application data that can be shared via 3) a member registered website.
The standards-based look-up utility, commonly referred to as an eCat, is connected to the shared database populated with the application data of member companies. That application data consists of a typical list of information that companies today share with commercial eCats to enable lookups (Year, Make, Model, Part Description, Per Vehicle Quantity, CID, Blue Price). Being Web-based the supplier owned EPC would have to be completely protected with advanced encryption and anti-copying technology. The website would be available to all legitimate aftermarket practitioners. Registered installers and parts resellers would receive a password for access to the site.
The governance body for the supplier owned EPC could take several forms. It would however have to be a “formal” organization and legal entity with documented by-laws, membership requirements, a dues structure (for member manufacturers), etc. It would more than likely be a not for profit corporation supported in large part or in whole by volunteers and contract employees.
Potential Benefits
Existing solely as a service to the aftermarket to help improve the availability and accuracy of data, particularly at the service dealer level, there are many ways that the initiative would benefit the greater aftermarket, including:
•Expedite the introduction of new numbers and carry-forward coverage to the marketplace, virtually eliminating the 60 to 120 day “exclusive” time period that OE dealerships enjoy today
•Facilitate faster correction of errors in suppliers’ published data which will help reduce wasted time and returns
•Reduce (over time) the number of file formats to maintain and export
•Provide manufacturers with better protection of intellectual property
•Establish a means for faster and more efficient distribution of product and technical information directly to the product users (installers).
•Provide opportunities to reduce costs for everyone in the supply chain
•Provide a “one-stop” web-based research resource for the most up to date product and application data available to distributors, countermen and installers
Summary
All participants in the aftermarket supply chain stand to benefit if manufacturers’ data gets to the market substantially faster than it does today. Currently it takes EPC service providers anywhere from 60 to 150 days to get manufacturers’ updates to market. This includes time to “map” data from industry standard formats in which manufacturers submit the data into the proprietary formats used by many of the commercial eCats. Additional time is required to run validation routines, burn the data to discs and mail them to users, which is still the most common method of distribution used by both commercial and private eCats.
Equally problematic is the delay in fixing data errors. Some of these errors are created by poor data management on the part of manufacturers and some are the result of mapping errors by the eCats. Regardless of the source of the errors, the amount of time (again 60 to 150 days) it takes to fix them in the field is unacceptable.
In addition to these time lags a significant amount of data is not getting down to the service bays at all. Driving all useful information out to the service dealer level will put catalog lookup into the most reliable hands it could find…the technician performing the service.