In today’s Executive Interview, we hear from Mike Schwab, vice president of NGK Spark Plugs’ (U.S.A.) aftermarket division. Schwab, a 20-year veteran in the aftermarket, has been with NGK since 1989 and previously served as director of sales and marketing for North America. Here, Schwab talks about the company’s new OEM-blended oxygen sensor program, and the benefits of being an OEM supplier. Schwab also brings us up to speed on NGK’s thriving social media efforts and the expansion of the company’s aftermarket staff.

Please catch us up on what’s new at NGK, in terms of product offerings, such as the new OEM-blended oxygen sensor program.

For the past several years, new car dealers’ part departments have enjoyed strong market share in the oxygen sensor category, due to the fact that most technicians trust the OEM replacement version more so than the available aftermarket version. Some may not like it, but we believe it is true. Many technicians have made their local car dealer their No. 1 call, especially on late model vehicles with oxygen sensor or other engine management repairs. Being that there are really three main OEM oxygen sensor suppliers, we felt we could better assist our A/M distributor partners by pioneering an OEM-blended sensor program; this allows the jobbers to more easily identify and capture business that may have gone elsewhere.

How does it work?

It really is quite simple. The program encompasses all three main OEM suppliers and allows all three to participate with their current packaging. This means that the biggest challenge was the research and cataloging of the data. We did exhaustive work in determining the OEM supplier for virtually every AAIA application. After this was completed, we worked on bringing this OEM information to the countertop screens in our partnering parts stores so they are selling the OEM sensor brand for each vehicle by application.

Can you elaborate on the benefits that stem from being on OEM supplier, and what it allows NGK/NTK to offer in the aftermarket?

Being a supplier to the OEM car makers around the world affords NGK Spark Plugs and NTK Oxygen Sensors certain benefits. Overall, I feel our OEM placement creates our aftermarket opportunities, but let’s talk about a few of the other benefits.

First, we have an established relationship with most engine makers in the world. This gives us knowledge about how each company’s engineering department designs an engine and emission control system. We also work closely with the OEM engineers to develop the future generation of engines and emission control devices that meet the increasingly strict regulations.

Secondly, we are held to extremely high quality-control and process standards that are an inherent part of being an OEM supplier. This, of course, permeates throughout everything we do, including our aftermarket channels.

Most importantly, being an OEM supplier confirms to our aftermarket customer that installing NGK or NTK products brings peace of mind – peace of mind in knowing that you are using tested and proven OEM supplied parts.

How important is efficiency to NGK as both an OE and aftermarket supplier, and how does the company stay at the top of its game in terms of efficiency and process?

With the world economy in constant flux, our customers, both OEM and aftermarket, must more efficiently balance inventory, sales, investment and capital. We, as a supplier, are included. For example, when demand for new cars slips, so does new car production and demand for the OEM parts, of course. While Japan recovers from the devastating earthquakes and tsunami, new car sales will likely be far less than previously forecasted, and we must quickly adapt to this change.

We work hard at forecasting, sales and inventory management. One of the best tools we have is our new SAP ERP system. We launched SAP in July 2010 to help us more effectively manage and execute our manufacturing, warehouse management, accounting, sales and just-in-time deliveries, etc. This new tool has helped create efficiencies, but in reality, we are only scratching the surface as to what the system can help us do. We are improving processes each and every day as a result of continuously learning and gaining experience with the program.

The last time we spoke (in 2009), NGK was excited to talk about its participation in social media and the launch of the “ArtofFast.com” – a social networking site for auto enthusiasts. What kind of ROI are you seeing today when it comes to participation in social media. And what are NGK’s plans for the future in that regard? Will you continue, expand or scale back?

We recently merged our artoffast.com micro site with our Facebook fan page for several reasons. With the changes in social media over the past four years, we felt we could better manage this space by focusing more on Facebook. As a result, we had more than 75,000 fans of our page within the first three months it was launched. More importantly, we have a very active wall, with nearly half of the fans posting something each and every month.

In terms of ROI, it is difficult to determine in the social space. We look at social media as a fundamental method of developing and retaining customers for the future by being present within a popular, two-way communication platform. Our long-term investment in social media will ideally position us as the leader in spark plug and oxygen sensor technology and build a lasting relationship with our brands. Our intention is to move away from simply being another brand choice. We want to be the obvious brand choice. Our social media efforts are coupled with our grass-roots consumer engagement strategy. We will continue to engage consumers at events like Monster Jam and various speedways and drag strips. By integrating certain consumer events with our social media strategy, we are identifying with a very strong and the appropriate demographic.

NGK has made some significant expansions in its aftermarket staff in the past several months. What is going on?

In 2011, we’ve promoted several key people and added team members to increase our level of customer support. In addition to the success of our blended OEM sensor program, we’ve been growing our spark plug and related products business with our current distributor base.
In order to increase our service levels, we’ve positioned our team more effectively.

We feel supporting our customers is paramount and historically has been one of our core strengths. In order to keep that high level of service, we are expanding – not to simply meet, but to exceed expectations.