While lately it may seem like every second car on the road is a Tesla, the truth is – in Australia at least – we're hanging onto our petrol-powered cars longer than ever.
There's no doubt that across Australia, New Zealand, the US and beyond, hybrid and electric vehicles are growing in popularity. But whether due to price, range anxiety, inflation, or cost of living pressures, the tide has not yet fully turned. EVs still only account for 4% of new car sales in Australia.
Which means we’re taking better care of our existing vehicles, servicing them more, keeping them roadworthy for longer. The average age of a car in this country is now 10.6 years old – that’s 6 months older than the average age just a few years ago.
With 20 million vehicles in Australia alone – 15 million of them passenger cars - it’s safe to say the automotive aftermarket and consumables industry is as strong as ever.
B2B commerce challenges
Automotive aftermarket and spare parts suppliers come in many forms. From enterprise level ‘house of brands’ organisations, to franchise model groups, to independent distributors.
And while they each service a different type of customer, there are some common pain points affecting most suppliers where B2B commerce is concerned.
Manual order processing
Some customers, generally smaller operators, will order online. Others, generally bigger organisations, will order via EDI.
But everyone in the middle – generally the majority of the customer base – will order via email:
- Generating a purchase order and sending it off to the supplier to process is standard operating procedure for a great many automotive parts customers.
- Employing staff to manually interpret and key that purchase order into the ERP is standard operating procedure for a great many automotive parts distributors.
And herein lies the problem. It’s a slow and error-prone process, particularly when dealing with massive, consolidated purchase orders containing hundreds of lines.
When dealing with products like automotive spares and aftermarket replacements, it’s critical that the part numbers on orders are correct.
A common issue for many suppliers is the inconsistent nature of prefixes and suffixes used by their customers. Some customers even use their own part numbers, adding to the confusion.
Errors are costly for everyone involved.
If the wrong part is delivered, the vehicle can’t be repaired. The servicing agent must return stock, the supplier has to re-ship, and the customer is forced to wait.
Complex delivery requirements
Where centralised ordering occurs, particularly within franchise models, a head office may collate orders from franchisees and then group them into one large order with various delivery points.
This requires significant administrative resource.
It’s what we call ‘swivel chair integration’, and it creates bottlenecks in the fulfilment process. It also introduces another opportunity for errors to creep in, creating further headaches down the line.
Gaining an edge through automation
So with all of this demand out in the market, whether it be from the nation's 40,000+ garages, the franchisees, the secondary distributors... how do leaders (and challengers) in the automotive supply industry keep their edge, stay lean, organised and profitable?
We’ve found that automation is a highly effective tool. In particular, automating the processing of manual B2B purchase orders. It’s why we built our Lucy solution, and why it’s beloved by many in the industry already.
Even on our best days, we mere mortals can only type so fast. Faced with an incoming purchase order 250 lines long, the average customer service rep might need the better part of an hour to key it into the ERP. Add to that extra time required to check incorrect product codes, verify price discrepancies, or lookup part compatibility, and the time sink per order is obvious.
In contrast, Lucy can have that same purchase order entered in under a minute. Integration to the ERP means she can also validate every last line item – product, price, even unit of measure. Discrepancies get flagged for attention and corrections are remembered and stored for next time.
Where custom part numbers, prefixes and suffixes come into play, Lucy’s code translation feature saves the day. Mapped once and then automatically applied thereafter, every customer can have their own unique set of part numbers for ordering and Lucy will learn their translation without complaint.
For large consolidated orders with multiple delivery points, Lucy can utilise some pretty clever mapping rules based on any number of criteria, splitting the sales order into the required Bill-to / Ship-to configurations.
Conversely, Lucy can take the purchase orders directly from the smaller customers and save the effort of consolidation entirely. Single operators, franchise groups, large brand conglomerates – Lucy will handle the purchase order processing for all of them.
No change is required of the customer in the way they order, which is especially important when servicing less tech-savvy buyers.
Industry leaders - and challengers - turn to us
Over the years, the most recognisable names in Automotive supply – not to mention emerging names in the market - have turned to us.
Brands like Auto One, Yakima, Turbosmart, and Brown & Watson have all streamlined their business processes by automating with Lucy.
Acceleration simply happens faster with the right digital partner, and investing in digital capability is what turns Automotive supply challengers into industry leaders.
If you’re involved in Automotive supply, or would like to know more about being ‘Powered by Commerce Vision’, let’s talk!