Supply chain management and logistics takes on a transformative meaning for Dan Hanson II, vice president of Hanson Distributing Company. Hanson who oversees commercial sales to the professional auto service centers throughout Southern California and Arizona integrates data of all kinds into his decision making. He categorizes this mindset as “thinking about thinking,” particularly to challenging organizational bias. We ask Hanson who is actively involved with California Automotive Wholesalers' Association to verbalize his outlook on supply chain best practices.
Which part of the supply chain is most underrepresented in the aftermarket?
I might be stretching the definition of “supply chain,” but I’m going to say (electronic) catalog data. Like most businesses that focus on the service dealer, I look enviously at the sophisticated in-house catalogs built by people like WorldPac that present detailed data to the user – OEM part numbers, engine family data, sizes and measurements, specific connection data, etc. Typically some portion of that data is available in the paid catalog services that most of us use every day, but with rare exceptions, the data is not nearly as robust. I don’t have a canned solution to the problem, and there isn’t a one-size-fits-all solution. This is something for manufacturers and buying groups to look at seriously and closely. Data is everything.
Talk about your outlook on tariffs.
The tariffs since 2018 haven’t been as impactful as I feared. Although I still suspect that they’ve still had an impact on the consumer product choice decisions — midgrade or premium— at the service dealer level.
I can’t prove this, but I strongly suspect that some of our competitors in the marketplace decided to bear some of the cost themselves in the form of reducing their price on the street on products like brake rotors in what appears as reduced margins.
Perhaps even more impactful is going to be how the tariffs are phased out, its pace and sequencing, and how we manage it. How sticky will pricing be? While I expect the tariff duties to stay intact throughout 2020, I expect that we may well begin to see more exemptions, which will be challenging to navigate if relief comes in specific segments (as I think it may well) like the exception recently granted for truck parts of a certain size while remaining in place (for the time being) for the rest of the vehicle park.
Which challenges do you see that managers are underestimating or overlooking?
I know the big-guy distributors do a much better job of this than some of us. I think the perennial challenge of not just adding new parts release to the database, but to quickly recognize them and move them into inventories at all levels. It’s easy to get lost in the current sweet spots. Consider the “80 percent” of the proverbial 80/20 rule that yesterday’s new release could be tomorrow’s “A” mover. Or even more importantly sometimes I think the forward-deployed C and D mover that when swiftly delivered builds invaluable credibility as a reliable distributor.
Tell us what trends excite you the most?
I don’t want to sound in any way disloyal to the great brand name suppliers that helped make the aftermarket, but I’ve particularly enjoyed the ongoing recognition that there just might be something to this aftermarket business by the OES manufacturers. Their products have been great complementary and supplementary offerings to our traditional workhorse vendors. They really can sit side-by-side (on our shelves) and bring positive growth for both segments. I’ve spent much of my time over the past decade or so working on this kind of inventory integration here at Hanson Distributing.
