When compared to motor factors is there any other industry offering a more efficient supply chain to technicians and service points in the UK? The answer is almost certainly no, so we should congratulate ourselves on what we’ve achieved. Or should we?
It is inconceivable that a plumber finding he needs an unanticipated part to repair a boiler, or a computer engineer wanting to order a circuit board, could phone their supplier and expect a delivery 20 minutes later complete with a free mug and Kit Kat. So why do we provide this level of service to garages, and, more importantly, can we afford to carry on doing it?
From the mid-seventies the race has been on to offer the fastest delivery service to garages and the bar has been raised every year. However, rising fuel prices, insurance and all the other costs associated with offering an ‘instant response’ delivery means that margins are increasingly being impacted and garages have become both lazy and inefficient. I have been with a factor and witnessed a garage place three separate orders for the same vehicle over a period of around an hour as the technician works his way through the service schedule, finds jobs to do and demands parts to be delivered on a different van. Another well-known horror story is the garage who orders from two or three factors, only to keep the first part to arrive and send the others back for credit. Many factors reading this will have sent a van out with only £10 worth of parts for delivery and wondered why we do it.
Surely the time has come for the industry to collectively start to educate their customers; ensuring they understand the cost implications of their actions and drive up efficiency not by delivering faster but smarter. Many motor factors reading this will be thinking, great idea but if I make the change and nobody else follows, I’ll lose sales and customers. To an extent they’re right, this has to be an industry- wide initiative.
Garages for their part need to address their processes. How many garages look at what’s due in tomorrow and pre-order the parts, so they arrive before the car? The answer is regrettably very few. This approach would deliver cost savings for factors that could be passed on to garages and indeed motorists. A by-product of this approach would be to allow factors to source parts they don’t have available and deliver them first thing in the morning often resulting in cheaper parts as they could use their normal supplier.
Ask yourself these questions: What is a viable minimum delivery value for my business? How much does it cost to deliver to each of my customers (it will vary), which customers are cost effective, and which are just a cost?
The answers to these questions may surprise you. After that the next question you need to address is what are you going to do about it? Make it a New Year’s Resolution, and watch your costs drop and profits soar.