The customer experience
Imagine you’ve been waiting at the car dealership for two hours, only to get told that the part you need is out of stock. You realize you’ll have to return another day to retrieve your vehicle, and your frustration levels skyrocket. What if a loaner car isn’t available, and you’re stuck with no reliable mode of transportation? Why should you be inconvenienced because your dealer didn’t have the part? Why can’t they call one of the other dealerships in the area and see if they have the part in stock?
After all of that wasted time and energy, why would you ever come back to that dealership? With no incentive to return and an overall negative experience, it’s easy to see how dealerships can permanently lose business and damage their reputation. This reputation damage extends to the OEM as well. If you have a negative experience with one major automotive dealership, there’s a strong possibility that you’ll write off the manufacturer all together.
How parts availability impacts your repair velocity
Let’s keep it simple. Repair velocity is largely driven by parts availability. If the dealer is missing a part, they have to contact the OEM parts distribution center (PDC) to see if it’s in stock and when it can be delivered. However, if the PDC isn’t local or the part is back-ordered, dealers face increased costs, complicated logistics, and frustrated customers who feel like their time isn’t valued.
Why is this so complicated?
We’ve all heard the saying, “Right part. Right place. Right person. Right time.” We can all agree that this makes perfect sense as the strategy to run a successful service organization, right? So why do we keep stumbling into the same problems? I would have thought by now we would have digitally transformed this challenge away!
The fact of the matter is that it’s a delicate balancing act that OEMs must manage with their dealer networks. On the one hand, there’s the utopian scenario where service levels are 100 percent for aftermarket inventories all the time. The consequences of this are tied directly to free cash flow (there won’t be any because it will all be tied up in inventory) and obsolescence risk. If OEMs are lucky, the parts collecting dust on the shelves may be returned in time to either allocate to re-purpose instead of scrap.
Optimizing your dealer network
Syncron Dealer-to-Dealer (D2D) offers a solution to this logistical nightmare. Syncron D2D is cutting-edge software for OEMs and dealers who want to avoid end-customer delays and maintain target service levels across their entire retail inventory management (RIM) supply chain. An intelligent D2D system automatically fulfills backorders by leveraging other dealerships within your network and selling parts that are likely to be returned or obsolete. By reducing the amount of unused inventory collecting dust on your warehouse floor, you’re freed up to use that capital elsewhere.
With Syncron D2D, you can:
- Reduce your obsolete stock in the entire dealer network by up to 20%
- Increase backorder fulfillment by up to 38%
- Reduce your future parts returns by up to 50%
Syncron D2D reduces PDC backorders by expanding the parts search to other dealers within their network. If the part requested isn’t available at the PDC, there’s a good chance a neighboring dealer has it on hand. Backorder recovery minimizes the end-customer wait time, cuts transportation costs, improves operational efficiency, and reduces environmental impact.
A win-win solution
The OEM and brand will see the benefits of this technology, but what about the dealers and the businesses they’re running? Not only does it speed up the repair process allowing for more throughput, but there’s also a financial incentive for dealers. Instead of supporting the three or four local towns, dealers can expand their market size by selling parts to other dealers through the OEM for a profit!
There’s no way to escape market uncertainties and supply chain issues. However, there is a significant opportunity for OEMs to help mitigate these risks for their business by enabling collaboration across dealer networks, ensuring a better outcome for all.
Are you interested in learning more about how Syncron can help? Reach out and connect with a D2D expert today.