by Scott Luckett, vice president, Technology Standards and Solutions, Automotive Aftermarket Industry Association

BETHESDA , Md. — Earlier this month, 250 aftermarket professionals came to Chicago for the 2008 Aftermarket eForum. They learned from 38 experts and speakers about how to apply technology to retool their businesses and race ahead as the economy inevitably improves.

I began the eForum with a keynote address about the recent strategic planning exercise completed by the AAIA Technology Standards & Solutions Committee. This visionary plan will help ensure that the technology standards and other initiatives we undertake are all pointed in the same direction and address the challenges that we will face in the year 2012 and beyond.

A couple of macro-trends are going to be very relevant to the future of the parts and service industries. Specifically, we believe:

• Increasingly sophisticated vehicle technology will combine with improved original equipment quality and reduced miles driven to extend the replacement intervals of a growing number of high-priced sensors and hi-tech components. Put another way, inventories will grow with more expensive, slower moving p rod uct. This will put even more pressure on a supply chain straining under its carrying costs already.
• The shift to online commerce is well under way and adds much-needed efficiency for routine transactions that can become self-serve. However, as all customers begin shopping online and self-select their parts and accessories it places a new importance on the data that suppliers distribute about their p rod ucts. The buying decision is made by what can be learned from the computer screen; so it has to be complete, timely, accurate, graphical, descriptive and informative. For most suppliers, this emphasis on e-data requires a shift in priorities from print to electronic content and the resources needed to manage and publish it.
• A method of connecting business systems has emerged called Service Oriented Architecture (SOA) which is revolutionizing the way business systems and applications interoperate. It offers two principal advantages: the time and expense of getting two applications to work together is reduced significantly; and a limitless number of new services can be offered and discovered as long as they are based on industry standards and conform to the aftermarket architecture. This means small, on-demand applications can flourish in the aftermarket, changing the software game forever.

The folks who attended eForum heard all of the evidence around these mega-trends and also heard speculation about other trends that will influence our futures, including vehicle telematics, the impact of the millennial generation, demands for more sophisticated repair and service information and more. But nearly every speaker, panel and breakout session touched on the return on investment (ROI) in more robust and standardized aftermarket data and the systems that deliver that data.

Investments in more robust catalog and p rod uct information are needed to meet the requirements of an on-demand, on-line marketplace. Suppliers must look at where their dollars are allocated and shift more resources to create, manage and distribute more electronic p rod uct images, weights and dimensions, codes and classifications, MSDS sheets, performance and physical attributes and … basically everything that they have in print. Because the reality is that 90 percent of p rod uct look-ups at parts stores and shops begin in an electronic catalog. In light of this, shouldn’t 90 percent of the resources be allocated to make electronic catalog and p rod uct information as rich and full as it can possibly be?

Decision-makers ask how investments in catalog and p rod uct data pay for themselves. The evidence is that improving automotive aftermarket data will increase sales, improve efficiency and reduce returns.

• Electronic data can be published and distributed faster than print. It is a proven fact that sales increase when complete information is available so customers can confidently select the right p rod uct for their needs. Shortening data time-to-market is the most effective way to add sales-life to an item.
• Mistakes and inaccuracies in p rod uct data affect the cost of handling electronic orders, reconciling invoices and many other common business transactions. Accurate p rod uct data that is in synchronization with business partners improves operational efficiency and allow resources to be shifted to more p rod uctive activities than fixing errors.
• As much as 50 percent of new part returns can be attributed to a failure of data. If it’s not accurate, timely, complete, visual and descriptive, it’s not helping the customer select the right p rod uct the first time. Do you want to reduce returns? Then give the customer the information needed to select the right p rod uct the first time – every time.

Beyond these three significant benefits, suppliers and distributors who invest in robust data will be better equipped to collaborate electronically on the supply chain challenges of the future. Channel visibility, data warehousing, collaborative planning and forecasting all work most effectively when you and your partners are in perfect sync with your data. And the on-demand world of Web services will pass you by unless your catalog and p rod uct information is ready to answer the call.

This was our eighth annual Aftermarket eForum and I believe the available insights, lessons and learning opportunities have just gotten better over the years. Despite tough economic conditions, those who attended the eForum this year made an investment in the future of their business. As a result, they went home with new ideas that will transform their businesses and put them ahead of their competitors. eForum attendees left Chicago with insights on how to shape the future.

The ninth annual eForum will be in Chicago , July 15-17, 2009 . I hope to see all of you there, especially those who want to boldly move into the future with confidence.