Disruption Junction

March 3, 2022

What shop owners can do to address supply chain issues in parts industry.

A couple years ago, it was common for Harrell’s Automotive to keep about 10-15 cars overnight that were waiting on parts or labor.

Now, as the industry deals with a crippling parts shortage, it’s common for the shop to keep anywhere from 30-80 cars overnight at any of their four locations in North Carolina.

“It’s pretty terrible,” owner Brandon Harrell says. 

Harrell’s Automotive isn’t alone in their struggles. Typical day-of-jobs are taking three days. Three day jobs are taking a week. And it’s happening everywhere. Look up “auto shop parts shortage,” on google and you’ll be flooded with stories of shops around the country that are struggling to receive parts. A quick glance shows shops in Florida, Virginia, and Washington talked to local news stations about the issue just this week.

There’s a confluence of issues that have led to the current state of the issue, Harrell says. Shortages of employees in every step of the supply chain, from the parts manufacturers, shipping yards and delivery trucks. COVID shutdowns in foreign companies that are key parts producers. A struggling chip shortage that has prohibited new vehicle production, which has led more consumers to keep their old cars and thus need more extensive repairs. And while the added business is good for the shops, the increased demand for parts, often that are more complex, has further pressured a limited supply chain. Then add on other third-party factors, like the Canadian trucker blockade, which reportedly cost the auto industry $300 million as parts couldn’t be delivered. 

To make a long story short: pretty much everything that could go wrong has gone wrong, Harrell says. And he blames the parts industry, for which he was a part of for 20 years. He owned a parts distribution company for two decades before getting out of the business two years ago. 

“We’ve been digging this hole since the mid-90s and here we are,” he says, explaining the constant push to make parts cheaper and cheaper which required manufacturing to go overseas and has led to a lot of the current issues. 

In Harrell’s experience, the items that have been the most difficult to track down have been filters, saying it’s been a “nightmare” to source, filling at 50 percent or less. Batteries and oil have also been difficult. He also expects a shortage of additives for gasoline like 5-30 and 5-20 in the coming months. It’s also been more difficult to get parts for heavy repairs like engine replacements, which are commonly taking two or more weeks to get parts.

And parts companies have not been transparent about their delays. 

“They don’t want us to call other people, so they’re not honest with themselves. It’s about as bad as it gets from a customer service standpoint,” Harrell says. 

So what can shop owners do to address the shortage?

It's a hard spot for many shop owners. Unlike other shortages, shops can’t address it themselves. So, until the supply chains return to normal, shops need to be innovative in their strategies, says Harrell. 

Be Resourceful

Joe Valind, owner of Auto Safety Center in West Bend, Wis., has also had issues, though not as extreme as Harrell’s. Valind’s shop doesn’t service many euros, which he has seen longer days on than domestic vehicles. But when he has had delays, he’s been willing to go anywhere to find them. Valind has the luxury of several parts stores in his area, which his team will peruse to find parts, even if it isn’t their preferred supplier. In other instances he’s also looked to EBay, Amazon or other online dealers who have dealer stock. 

Don’t become married to one parts supplier, Valind says, make sure you’re exhausting every option you have. 

Get it Right the First Time

Misordering parts is an unfortunate reality that pops up for every shop. While it’s always been a blow for the business when that happens, the shortage has exacerbated it. A part that normally takes two days to deliver now takes five days. Then it’s the wrong part and the shop needs to wait another five days to get the correct part. Suddenly, a two-day job has taken a week and a half. That’s why Valind has had technicians begin to write their own quotes. It’s more work for the technicians, yes, but it helps ensure the correct parts are ordered every time. They know the job better than anyone. 

Charging for delayed pickups

Harrell never used to charge customers who were a little late in picking up their vehicles. Now he is. There just simply isn’t room to keep fixed cars on the lot. He’s also charging warranty companies a storage fee the very minute the car is on the lot. In normal situations, if the company wanted to get an appraiser out to the shop the next day, Harrell wouldn’t charge the company to keep it on the lot. Now he is.

Be Transparent

This is the biggest key, Harrell says. With every industry struggling with supply chain issues, customers have become much more understandable with delays. But that shouldn’t be taken advantage of. Call the customer frequently to update them on the status of the repair and be up front when they come to the shop about the struggles the shop is facing. Harrell has even gone as far as to tell the customers what the shop is making from the individual job to give them more context on the situation. 

“We’ve been more transparent now than we’ve ever been. The more transparency you have, the better the outcome,” Harrel says. 

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