SAN DIEGO, CA —

Mitchell 1 got its start back in 1946 when Glen Mitchell started a business out of creating simplified parts replacement books. In those days, OE parts replacement books could be complicated and difficult for the counterperson to use. As a counterperson himself, Mitchell saw a better way to organize parts replacement books, and from his vision, Mitchell 1 was born.

While the company today still offers some print products, it is best known for providing repair information, shop management services and estimating products in desktop and Internet formats. Today, the company’s products are used by independent repair facilities, automotive dealerships and DIYers.

As technology advances, the automotive repair industry is forced to keep up with the changes. Dave Ellingen, president and CEO of Mitchell 1, shared with aftermarketNews.com some of his thoughts on the roadblocks to getting more repair shops to embrace technology, and how parts suppliers are working to move the effort forward.

In late 1997 Ellingen was appointed president and CEO of Mitchell1, a limited liability company with majority ownership by Snap-on Inc. Prior to his appointment at Mitchell 1, Ellingen spent 25 years at Snap-on where he held a variety of management positions. Since the time Ellingen joined Mitchell 1 revenues have more than doubled.

Over the past few years, the industry has seen an increasing number of partnerships between parts suppliers and repair software marketers. What are the benefits of these types of partnerships?

There are really multiple benefits for three groups involved — the shops, the parts suppliers and solutions providers like ourselves.

Shops are able to order their parts online, which decreases the amount of time it takes to get the parts. It also improves accuracy, since they are looking directly at the parts catalog — not working through a secondary source to interpret what their needs are. They get the right part a much higher percentage of the time. Typically, through our partnerships, the shop is also saving in its monthly costs of acquiring the software applications. Bottom-line: shops are benefiting by saving time, getting the right components, increasing customer satisfaction and saving money on their business software.

As far as the benefits to parts suppliers, the suppliers introduce us to their best customers. They’ve probably got one of the best relationships with the shops in the marketplace, dealing with them on a daily basis. They act as a secondary sales force for the business solution providers such as Mitchell 1. The benefits for the suppliers typically come when a supplier installs electronic ordering within a shop. They dramatically increase their share of the parts that shop purchased while reducing the necessary counterman time. They also decrease the returns that shop has, since parts ordering accuracy has been improved.

The last benefit is really to the solutions provider. As we talked about, the parts suppliers have excellent relationships with the shops and it decreases our sales cycle time, eliminating the “get to know you” phase and pre-establishing the customer needs.

Is Mitchell 1 working on any of the standards AAIA has set up, such as I-SHOP?

We are reviewing those standards for inclusion in our next-generation product. Right now, we have integrated with just about every after-warranty catalog in the marketplace so the immediate need is pretty limited. Our customer demand to incorporate the standards has also been limited.

Tell us about some of the partnerships Mitchell 1 takes part in.

There have been a lot of different partnerships that Mitchell 1 has been involved in the last few years, but one of the biggest success stories we’ve had is with O’Reilly Auto Parts. O’Reilly’s senior management team has a vision that parts will be ordered electronically in the shop and that it is a benefit to their customers to do business online. Senior management has this vision and they’ve driven this vision throughout their organization.

We have the same vision as O’Reilly and we have close communication and cooperation between the O’Reilly sales team and the Mitchell 1 sales force. We have seen an improvement in sales in areas where O’Reilly is strong. It really benefited both of us.

You mentioned the vision and support of the senior management at O’Reilly. I would imagine that management buy-in is one of the roadblocks solutions providers run into when trying to get a supplier to utilize online parts ordering. Would you say this is true?

We’ve have relationships with just about all of the major suppliers that deal with the professional side of the aftermarket – NAPA, MAWDI, BWP, CARQUEST, Worldpac and Auto Value/Bumper to Bumper. If you take a look at management buy-in, it’s at different levels, but I think that every one of these major players does have the vision. Their senior management team has bought into it and they are making the commitment both from a financial perspective and a personnel position to ensure that the programs are being supported.

What are some of the biggest advancements software and solutions providers like Mitchell 1 have made in recent years, and how have these advancements helped the industry?

One of the biggest advancements is the level of integration with the various parts ordering applications in the marketplace today. We’ve basically eliminated the need for the shop or the technician to re-key data. He also doesn’t have to re-key the information once he goes from ordering a part to dropping that part into his work order. We’ve made the application a lot easier to use. What that also does for the technician is allow him to understand what his profitability is going to be at the time he’s assembling the quote, instead of after the fact, when he’s got the part installed and already established customer expectation.

How do you envision the parts ordering process in the future? Will online ordering remain at the same level as it is today or do you anticipate it increasing?

It’s absolutely going to increase. As I mentioned earlier, every one of the major parts suppliers in the professional market understands that e-commerce is the path to the future for the shops. The shops themselves have become much more tech savvy in the last several years. When we attend the trade shows, often times the first question we are asked is, “What do you have for e-commerce parts transactions?”

We’re the only company that is able to give the shop owners such a wide choice when it comes to purchasing parts. By offering e-commerce connectivity with all the major parts suppliers, we give shops the ability to choose the supplier they’re already comfortable with.

The shops understand that these tools will give them a higher level of profitability and higher customer satisfaction.

Going back to the issue of roadblocks, what do you feel are the biggest roadblocks today in online parts ordering?

Right now I think its bandwidth. If you’ve got to go through a dial-up connection and wait for the applications to get in synch with one another, it’s not as conducive to use as a high-bandwidth application. As high-speed Internet connections become available at shops at affordable prices, I think we will see an increase in the electronic ordering of parts.

One additional barrier I think we have is the fact that many shops are using old, outdated shop management systems. The shop has invested time in putting its customer base into that system and they’ve got their employees used to using it. However, in order to facilitate an e-commerce parts transaction, you really need to be in a modern up-to-date software system.

What we’ve done is put together a program to easily transition those customers from their old system, and take the customer base and put it into a new, modern product.

_______________________________________

Click here to view the rest of today’s headlines.