SMYRNA, TN —
Every other week, aftermarketNews.com offers an interview with a high-profile individual in the automotive aftermarket. We give executives free rein to express their views on anything from the state of their corporations to recent legislative news to future trends in their niche markets. Here you see what matters to the newsmakers themselves.
Our latest edition of “Executive Interview” features Max Dull, vice president and general manager of Beck/Arnley. A Dana employee since 1987, Max has served in various capacities, beginning his Dana career as marketing manager for AE Engine Parts, North America. In 1991, he was promoted to eastern training manager for Clevite Engine Parts. In 1993, he assumed the role of product team leader for the Cylinder Components team in Ann Arbor, Mich., a job he held for four years, before being named director of product management for Clevite in 1997. Later that same year, he was promoted to vice president of product planning.
When the Dana Automotive Aftermarket Group combined Clevite Engine Parts, Engine Management, Beck/Arnley and WIX Filtration in 2000, Max was named vice president of product planning for the Underhood Group, the position he held until his most recent promotion. In March 2004, Max was promoted to vice president and general manager for Beck/Arnley, headquartered in Smyrna, Tenn.
Join us as Max shares insights from his extensive aftermarket experience, fills us in on what’s new at Beck/Arnley and explains the Beck/Arnley business philosophy.
Tell us about your background and more specifically, your aftermarket experience?
I’ve worked in the automotive aftermarket for more than 25 years, so the industry is truly in my blood. And I’ve worked in a wide variety of positions. I started my career as a mechanic, then worked as a machinist for a period of time, before moving to the other side of the counter to work as a counter person at an automotive warehouse distribution business. I later became the general manager of that WD operation.
My first job with a manufacturer came in 1987 as the marketing manager for the North American operations of U.K.-based T&N Industries, a manufacturer of import and heavy-duty engine parts. When T&N acquired Clevite Engine Parts in 1989, I spent a very interesting and rewarding few years as a field trainer, holding technical seminars with distributors, jobbers and technicians. Later with Clevite, and subsequently Dana, I held various positions at both the division and Under Hood Group level with responsibility for product development, purchasing, engineering and operations.
I also have gained significant international experience along the way, having had responsibility for offices or operations in various countries, including Hong Kong, Australia, Taiwan, Japan and China, along with managing relationships with suppliers throughout Europe, India, South America, Asia and other places around the world. All of this has taught me perspective, as I’ve been fortunate in my career to see the automotive aftermarket from many views, many cultures and many positions in the supply chain. I have a deep appreciation and respect for the work being done every day by all of the aftermarket professionals in our industry.
Please explain the new structure of Beck/Arnley and why these changes were implemented?
Sometimes an organizational structure is a certain way because that’s the way it’s always been. Sometimes a new organizational structure is designed in a traditional manner, because history or the textbook says that’s the way it’s supposed to be. In the case of Beck/Arnley, we recently had the unique opportunity to design a structure from a blank piece of paper. The result is an organization exactly tailored to who we are and what we do.
We were guided by extensive research that we commissioned in 2002 on what the import aftermarket resellers and technicians really wanted and needed. We took stock of those needs and created an organizational structure around serving them.
The best way to explain what that really means is to give you an example. Technicians told us strongly and clearly that finding an aftermarket source for parts that match the original equipment part form, fit and function in every way was one of the most important, if not the most important, factor in their purchasing decisions. Therefore, when we established our new Beck/Arnley organization chart, we appointed an OE form, fit and function manager. This person spends every hour of every day making sure the parts in the Beck/Arnley box match OE.
Another example: The industry has talked a lot about excess inventory in the supply chain, so we appointed a manager whose full time job is working to resolve supply chain inefficiency issues within Beck/Arnley and with our distributor partners. These efforts will make Beck/Arnley a better supplier and help our distributor partners become more profitable. Not to mention our Product Team concept, where we have organized product, sourcing and purchasing experts into well-defined teams focused on specific products to have clear accountability and provide a structure for fast reaction to changes in the market.
None of these positions are found on a traditional organizational chart, but all exist at Beck/Arnley to address specific customer needs. If you look at this in whole you will see that we are talking about fundamental focus, which also drives our overall Customer Relationship Management strategy. Our CRM team is customer-centric, not product-centric. We are focused on those things that bring value to the customer. And internally our operational structure allows us to be focused on making those things happen.
An example of how CRM and our internal operational structure come together can be seen in our “first-to-market” product and application coverage strategy. Our customers, through our CRM organization, have told us the importance of having comprehensive, late model coverage. We have, in turn, created an internal organizational structure to deliver the most comprehensive range of late model coverage possible. CRM directs, based on an intimate knowledge of customer needs our operational structure is in place to deliver.
Tell us about “Form, Fit and Function” and how important it is to Beck/Arnley and the way it conducts business?
The OE form, fit and function issue is a great example of how an organization that is not customer-centric can go wrong. For years, manufacturers and distributors in general, operating in product-centric organizations, created a mission of continuous part consolidation for purposes of inventory reduction. Our reorganization to being customer-centric revealed to us that aftermarket manufacturers, including Beck/Arnley, were contributing to the growing trend of technicians going to OE service dealers to buy parts. The technician wants a part that not only performs as well as the OE part, but looks exactly the same and gets installed in exactly the same manner as the part that came off of the car. A master cylinder needs to be made from the same materials and have identical mounting holes to the one that is coming off of the vehicle.
You asked how important this issue is to Beck/Arnley. At Beck/Arnley our legacy was based on an OE form, fit and function strategy, but even we had strayed somewhat due to a quest for part consolidation. Making sure that every part in every Beck/Arnley box matches our OE form, fit and function strategy is a key focus for us, as our research proved that this is even more important to technicians who repair foreign nameplate vehicles.
But this is more than just a Beck/Arnley strategy. This is a very large issue for the overall health of our automotive aftermarket industry. All manufactures should be paying attention and driving their product offering to match the form, fit, and function of the OE part. The technician, who is the major decision maker regarding whether to buy parts from the aftermarket or the OE dealer, is telling us all that OE form, fit and function is critical.
Beck/Arnley has a philosophy of selling to resellers only and not directly to the installer. Why do you choose to do business this way?
We know we have competitors that sell directly to technicians and DIYers and that’s fine. That’s their business model. We choose to sell our products exclusively through resellers. We define resellers simply as anyone who stocks a significant amount of our product for resale. These business partners can be full-line distributors or specialist distributors, but the key is that we do not sell directly to technicians or the DIY customer. We do not, nor will we ever, compete with our reselling customers. We value their place in the supply chain and the services they provide
There are 180,000 independent service dealers in North America. For us to build an infrastructure to adequately service every one of these 180,000 independent service dealers when one already exists, would be ludicrous. We could never hope to replace the relationships that are built through the efforts of our reselling partners, with their own sales people calling on these 180,000 service dealers. There is no better way for us to stay in tune with the needs of technicians. Simply managing the accounts receivable for sales to such an immense and geographically diverse technician base would be impractical for us. Our reselling customers add value and we recognize that value.
A supplier like Beck/Arnley can never survive with a dual-purpose business model. Once you’ve crossed that line of selling direct, it is impossible to go back. And crossing that line involves a significant increase in operational infrastructure and other capabilities including IT and technology investment. However, we have realized that the technology lesson learned from the technician and DIY direct business model can be applied to our business model at Beck/Arnley.
Let’s talk briefly about electronic cataloging. Many aftermarket businesses seem to struggle with the complicated task of putting together an e-catalog for a variety of reasons. Beck/Arnley’s ElectriCat electronic cataloging system is award-winning. What’s the secret to getting organized, accurate information in an electronic catalog?
For years people have talked about the Beck/Arnley catalog being very, very good, with the part numbering logic becoming the industry standard in many cases. But what they were really talking about was our paper catalog. Until recently, Beck/Arnley was trying to evolve a paper-based catalog into an electronic catalog. I can tell you that many others have tried, but no one that we know of has ever been able to accomplish that feat. It can’t be done. You have to start over and create a comprehensive electronic catalog database and have that drive both the electronic catalog and the paper catalog output. As part of our larger Dana Automotive Aftermarket Group of companies, Beck/Arnley is fortunate to be associated with the industry’s leading electronic catalog group. You can ask anyone and they will tell you that our electronic catalog group in Churubusco, Indiana, is the finest in the business.
We feel that next to our people, data is the most important asset we have. The new industry standards like PIES and ACES have helped us all. Beck/Arnley not only endorses the industry standards, but we have fully adopted them. We are capable of exporting our data in industry standard formats, as well as many other unique formats. We are mapped directly to all major third party electronic catalog suppliers. In fact we are currently capable of exporting data in more than 20 formats and we export in 14 different formats. Equally important, we control our own data. We chose not to use an outside company to manage our data, as we view it as a core competency. With a belief that data is our second most important asset, we only feel comfortable managing our data ourselves.
How do you think the sale of the Dana AAG will affect Beck/Arnley?
This is the sixth time I have personally worked within a business unit being acquired or divested. Personally, it doesn’t scare me. However, I know that any change of ownership in our business may cause concern for our customers, so I am sensitive to that fact and I do understand why it causes concern. I was concerned the first few times too.
At the end of the day, we all work for our reselling customers and their customer, the technician. The corporate owners may change, but the customer always remains the same. Once you understand that, and understand that your job is to stay focused on the customer, no matter what, the rest is easy. When we stay focused on the customers and the customers see that things like order fill rates remain consistently high and order cycle times are maintained in the 24 hour timeframe, along with aggressive new parts development and application coverage updates, everyone becomes more calm.
In addition, outside of the large tire manufacturers, the Dana Automotive Aftermarket Group is the largest independent supplier of parts to the North American automotive aftermarket. That’s great comfort for Beck/Arnley and our customers, as our group of companies has a large enough basic infrastructure to stand on its own, as well as give all of our divisions, including Beck/Arnley, tremendous resources to draw upon.
For me, the most exciting part of the pending transition in ownership is that we will be moving away from a corporate parent that has publicly stated that its core focus is making parts for original equipment customers. And we’ll be moving to a new corporate parent that is going to invest in Beck/Arnley, along with our entire aftermarket group, and maintain a focus on our core business: the aftermarket. I am truly excited about the change.
What are your goals for Beck/Arnley for the next five years?
First and foremost, we must maintain the basics of order fill rates above 95 percent, order cycle times in the 24-hour-or-less range, always being first-to-market with new products and late-model application coverage, having all of our parts match OE form, fit and function, and maintaining our unwavering commitment to only sell our products through our reselling partners.
From there we must move beyond merely having satisfied customers, to having loyal customers. Using technology to be the easiest supplier in the industry to do business with is the key. It’s a nice goal to say you want to be the best at something. With technology and IT solutions for our customers, we want to go further than being the best. We want to be known as the only supplier providing solutions at such an advanced level.
Last, and maybe most important, Beck/Arnley must remain flexible and responsive to all changes in the market. The days of complex and rigid three-to-five year strategic plans are gone. The businesses that will win in today’s environment are not those with the farthest looking strategic plan, but rather those that are totally focused on ever-changing customer needs and constantly reinvent themselves to respond the fastest to those customer needs. Agility, responsiveness and a total focus on the customer are our most important goals.
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