As the industry continues to work through international supply chain challenges, tell us how CRP has been impacted by this and what changes you have made to manage.
When the global supply chain started to go crazy in early 2021, we looked at our supply chain management strategy and processes because we immediately recognized that a status quo approach would not suffice. This was a key business survival learning from the 2020 pandemic. We quickly zeroed in on a list of actions that would have an impact on our ability to have product in-stock when our customers needed it throughout 2021 and well into 2022.
On the strategy front, we focused on inventory safety stock levels and increased our inventory on-hand to ensure we could meet customer order fill rate expectations. This required our team to make lead time and safety stock level changes to our ERP system, and it also challenged our team’s innovative spirit by building two replenishment order cycle scenarios which drove production planning with our overseas manufacturing partners. These production commitments helped our manufacturing partners secure raw materials during a difficult period of availability.
We also changed our container consolidation and shipping process by committing to weekly shipment slots and taking advantage of multiple port destinations. It is a top priority to ensure that product flowing out from our plants is expedited into our shipping system. We were successful in this effort because we maintained an open and active communication with our factories and held weekly planning calls to prioritize production of product that we needed.
How is the current economic situation affecting CRP’s business?
We continue to experience strong repair shop demand for our portfolio of brands and product categories, which include Rein Automotive replacement parts, Pentosin technical fluids, AAE steering system components and Ajusa gaskets.
The steady rise in the average vehicle age coupled with the increased cost and shortage of new and even used vehicles has encouraged owners to hold on to their existing vehicles. CRP’s innovative product solutions and our commitment to the highest-quality replacement parts help extend the vehicle’s lifespan and performance, allowing consumers to save money by repairing their vehicles instead of purchasing new ones.
We do recognize the current industry headwind of inflation and its impact on spending behavior. Consumers deferring service work is a potential trend we need to monitor as well as price/quality purchase trade-offs. Monitoring shifts in market dynamics will allow us to react as quickly as possible to opportunities or challenges.
As vehicles continue to increase in complexity and consumer vehicle trends evolve, are there certain CRP product categories standing out as more in-demand than others right now?
Yes, CRP products that provide a solution for complex repairs based on a technology element and/or the need for a complete repair solution continue to resonate with the professional repair technician and are helping to drive demand. Our AAE EPS – or electric power steering program – is experiencing an increase that’s fueled by a vehicle park whose product lifecycle is moving into the replacement window. The combination of these market drivers and our product development commitment to introduce new, first-to-market steering racks is what puts us into an excellent position to meet the growing need for EPS replacement by repair shops.
Our Rein Automotive product development mindset focuses on delivering complete replacement solutions whenever possible. Whether it’s a Rein expansion tank with all the mounting hardware and cap or Rein water pump with mounted thermostat, hardware, gasket, and drive belt, we continually strive to deliver a repair solution vs. simply a part. We want to make it easier for the professional repair technician to select our parts and have confidence in the performance.
I understand CRP has made some significant investments within the reman category. Why is this an important segment for the company?
As the components and systems used in modern vehicle design continue to get more complex and costly, there is a growing need for remanufacturing to help reduce the cost of repair and ownership. We believe remanufacturing of expensive or hard-to-get components can play an important role in reversing the trend that prematurely sends younger cars to the junkyard because of the repair cost.
We’ve invested in talented and experienced people as well as new state-of-the-art facilities to support our long-term strategy in remanufacturing. In early 2020, we dedicated a new, manufacturing complex in Conway, South Carolina, and in 2021, we followed with the opening of a new R&D center in Ann Arbor, Michigan.
This is an important chapter in our growth and a major step in the expansion of our capabilities both as a manufacturer and a certified re-manufacturer across a wide group of product categories.
CRP Industries was recently recognized with a Top Workplaces 2022 honor by NJ.com. Congrats! Tell us a bit about the company culture and what goes into creating an award-winning workplace.
Thank you, Amy. We are exceptionally proud of the NJ.com recognition as it was based solely on employee feedback gathered through a third-party survey and measured culture drivers such as strategy alignment, execution of tactics, and connection with each other.
Creating a strong culture requires a foundation consisting of a clear vision that the team understands and supports, a mission statement that creates ownership and accountability amongst the team, and a core set of values that stand the test of time. Alignment on these three elements ensures that team members show up every day consistently and intentionally for the customer and for each other.
We’ve understood our customers are the reason we exist and thrive since our founding more than 65 years ago. Providing them with solutions they need when they need them allows us to maximize each other’s potential. This includes quickly adapting to customer requirements, diligently assuring product quality is the highest, improving order fill, and passionately finding new and innovative ways to make our customer’s life easier and more efficient.
Taking this same corporate belief into our employee relationships has helped to foster an engaged and caring organization. Through open and active communication, we’ve achieved team alignment on strategy. We are vested in our team’s learning and growth as every employee has an annual LD plan supported by training and development. We frequently use our employee recognition program to celebrate positive employee behaviors and performance that’s in line with our values and vision.
Tell us a little bit about the CRP Innovation Council – how long has it been going on and what are some of the benefits the company has gained from the insights it gathers?
The CRP Innovation Council officially celebrated its 10th birthday in 2022. Truth be told, we’ve had an informal innovation council for more years than we can count as our product development team has always partnered with professional repair technicians.
Today, the CRP Innovation Council is a select group of 100-plus professional technicians and shop owners who communicate directly with our engineers and product managers discussing pain points, parts issues and insights on making their repair work easier. They help us identify and capitalize on emerging trends or needs in the market. And, we share technical knowledge and information.
The primary benefit of the council’s efforts is their help in the development of solution-driven service or repair kits that include all the necessary parts to do the job in a single SKU. The council has contributed an unending laundry list of ideas that we’ve brought to market, from timing chain service kits to transfer case repair kits to water pump repair kits to high-pressure fuel lines to coolant hose with integrated temp sensor repair kits. The list goes on and on. Come to AAPEX 2022 to see the latest and greatest Innovation Council ideas.
What else do you have planned for AAPEX this year?
We’re excited to return to Las Vegas and exhibit at AAPEX 2022. The CRP sales and product team will be in attendance supporting a wide range of industry week events and meetings. As “Your Partner for Innovation” we’ll be focusing on a wide range of hot, new products to be shown at AAPEX.
New Rein Automotive products include two Tech Select repair solution kits for European applications, one for turbo installation and the other for timing chain kits. New Pentosin DCT service kits and ATF64 are part of the Pentosin line-up. And, we’ll be showing first-to-market AAE electric power steering racks as well as a new AAE hydraulic power steering pump repair kit program.
The CRP team has remained resilient and innovative throughout the past 24 months to maintain a ‘Customer First’ mindset. We’re proud of how we navigated the ever-changing business environment and will continue to find creative ways to partner with our customers. The AAPEX show is an opportunity for us to reconnect in-person and fulfill this commitment.