Ordering Parts Online
January 2010, TruckingInfo.com - Feature
Most parts distribution and warehouse operations use sophisticated management and inventory control software.
Likewise, most truck dealers also make full use of technology and software, often in concert with the OEM. For smaller, independent shops and repair facilities, the level of automation is somewhat less. But even in these smaller venues, technology is being used more often, especially in inventory control.
Smaller shops find that automating parts inventory and ordering makes a "dramatic" difference in shop operations, says Jeffrey Sipio, Intermec Technologies Corp., which offers inventory asset optimization and supply-chain information technologies such as bar coding.
"When you go to a system where everything that comes in the back door is bar-coded and inventoried, and everything that goes into the shop is billed to a repair order the minute it leaves the parts room, that helps the entire flow," Sipio says.
While these kinds of automated parts ordering systems are becoming more common, online parts buying is still not widespread.
Many large warehouse distributors and marketing groups have adopted vendor-managed inventory systems, which set up a link between distributors and parts manufacturers.
In this kind of arrangement, the VMI system takes on the job of making sure a warehouse/distributor customer has the correct level of a manufacturer's parts in inventory by monitoring that inventory and generating automatic orders. Instead of the warehouse sending purchase orders to a supplier, it electronically sends a daily report outlining products sold, products left on-hand, products returned, etc., to the VMI facilitator. The VMI provider then uses specially designed algorithms to evaluate the data in the report and generate an order for the customer based on previously agreed upon stocking levels, order amounts, transaction costs and other factors. This order is then sent to the warehouse distributor for approval.
While much of the large warehouse distributor side of the heavy-duty parts business has automated inventory and other processes, the story for smaller operations is somewhat different. And the same can be said for the link between the warehouse distributor and their fleet or service shop customers. For one thing, some small operations don't meet the volume required for some electronic transactions, such as VMI. And many smaller operations lack the IT resources for such systems, according to Michael Mallory, president of AutoPower, Lake Mary, Fla., which supplies management software to auto and truck parts distributors.
HDeXchange has been working for years as a non-profit organization to get parts makers, distributors, fleets and service shops linked on the information highway. Recently acquired by VMI provider Datalliance, HDX offers a commercial suite of customized e-commerce products. Products include not only VMI, but also file transmission and networking, document mapping and translation, and data warehousing. Transaction sets for parts distributors and their vendors include invoices, purchase orders, advance ship notices, product activity data for VMI applications and purchase order acknowledgement for VMI applications.
HDX also works with the Technology and Maintenance Council and Automotive Industry Action Group in developing guidelines for fleets that wish to purchase parts electronically.
Another industry player is Karmak, Carlinville, Ill., which offers a range of business management software products to heavy-duty truck dealers, repair shops and parts warehouse distributors. The company's inventory and service shop management software for warehouse distributors, service shops and fleets includes a module that allows an operation to control parts inventory and sales with the click of a mouse.
Web-based applications offer a less expensive option for smaller shops and independent distributors.
For instance, AutoPower offers WebPower, an Internet site that allows a fleet repair shop to buy parts from one of AutoPower's warehouse distributor customers via the Internet. This provides a specialized web site, tailored to a particular operation's parameters and pricing arrangement with the distributor, that lets mechanics order parts right from the PC in the shop. Provided the order is made through an approved supplier, a purchase order goes to the warehouse, a pick slip is generated and the parts are shipped. With such a system, the mechanic only has to know that he's ordering the correct part; he doesn't have to worry about making sure he is getting the right pricing.
Earlier this year, Karmak released an updated version of its ProfitMaster Internet Parts Sales, a Web-based software solution that lets heavy-duty dealers and distributors receive parts orders over the Internet. Fully integrated with Karmak business systems, the new release allows parts suppliers to control which customers may purchase via the Internet, and set pricing and other options for each customer. The business system processes and fulfills the orders, e-mailing an acknowledgement to the customer. Sales personnel save time and increase accuracy compared to manually entered orders. The ability to track customer activity allows dealers and distributors to analyze and respond to customer buying trends.
Not Exactly Amazon.com
Ordering parts online is not the same as shopping for consumer goods. With truck parts, there are a number of factors involved, not the least of which is the highly segmented truck parts market.
Some parts are only available through the truck dealer or component supplier. Other OE parts can be found at the dealer or an independent parts supplier. For other parts, there may be a choice between OE or aftermarket parts and a wider selection of suppliers from which to choose. Add remanufactured or used parts to the equation and there are even more options.
Part numbers are not standardized, so if a buyer is selecting an aftermarket part instead of an OE part, they need to know which aftermarket part number corresponds to the OE part being replaced. And on top of all that, you may be no more likely to get a great price online than when buying parts the traditional way.
Not that truck owners can't find truck parts, catalogs, part number cross-reference guides and suppliers online. A Google search for "heavy truck parts" returns more than 800,000 hits. But buyers can't just fill up an online shopping cart with filters, belts, hoses or other parts, and then electronically check out with a credit card. More likely, they will fill out an online order form or shopping list. Then a salesperson from the part supplier contacts the buyer to hammer out price and to make sure the customer is ordering exactly the parts he needs.
There are parts lists and catalogs on truck and component manufacturers' web sites. But these sites don't sell parts; instead they direct buyers to a local dealer or distributor. The distributor may also have a web site where customers can browse parts and fill out online forms for contact by a salesperson later.
Industry experts have noted that online buying is growing, but is still kind of new. Steve Crowley, president and CEO of Vipar Heavy Duty, a marketing group representing independent parts suppliers, says one trend for parts suppliers is to create customized e-catalogs for existing large customers, which list predetermined parts and prices. Customers can then order online from these customer-specific catalogs.
Crowley said he sees online ordering as more of a service to existing customers rather than a way of bringing in new customers, because of the technical nature of parts ordering. "The expertise exists at the distributor's end of the transaction," he says, noting that many buyers lack the expertise to ensure they order the right part, especially for highly technical systems.