Joel Barker, the noted futurist and business writer/speaker who will forever be remembered for thrusting the term "paradigm" into the popular vocabulary, preaches that when a paradigm shift occurs, all the players in the game essentially come back to square one. Being an auto racing fan, it’s what I like to call the "yellow flag effect" – no matter how big a lead one might enjoy, the yellow flag bunches us all back up.I point this out because I think we in the aftermarket are about to see a yellow flag that will send everyone, leaders and laggards alike, back into a bunch to restart the race. It is the yellow flag of product/price and application data that fuels supply chain technology.Data is the fuelI have ranted and raved in these pages before about the importance of data as a "fuel" for supply chain technology applications. I have made the case for the importance of full, rich and accurate data as a precursor in entering the supply chain technology race. It is a point that I don’t believe can be over emphasized. Perhaps a better analogy than fuel is power, as in electricity. There are no appliances that will run without electricity, just as there are no applications that will run without data. Imagine what life would be like if every appliance manufacturer insisted that if you wanted to use their appliance, you had to source electricity that was generated to their spec. GE insists on 110 volts at 60 cycles, while Whirlpool thinks 220 volts at 30 cycles is the better idea and every other manufacturer does the same, each justifying why theirs is the best way. Imagine the mess.Well, in a manner of speaking, that is what we have been living with in this automotive aftermarket for many years. A variety of appliances (applications) each of which requires its unique sort of electricity (data). And if you try to run one appliance with the other’s electricity, it spits blue smoke. Not a good situation.Fortunately, in the last year, virtually everyone in the market has agreed on the Product Information Exchange Standards (PIES) for data. PIES will allow us all to build appliances and run them on a common form of electricity. Similarly, great strides have been made in establishing a common electronic catalog standard, but there is still some work to do on that front, something I will be talking about in this column soon.With the PIES standards now in place, the work can begin. Specifically, the work of each step in the supply chain getting their systems compliant with the PIES standard and matching their data with one another so that they can take advantage of the myriad software applications that can automate redundant functions, improve efficiencies and drive costs out of our outmoded system. Those businesses that scrub and prepare their data first, will enjoy a much smoother implementation of whatever application they choose to implement; electronic communications, automated re-supply, bar-coded receiving, random locate or any number of other time and labor-saving solutions. More significantly, they will have a real competitive advantage in the marketplace when the proverbial green flag of this new race comes out. Companies that were long-established leaders might find that early adopters of the new technology will gain a quick and substantial leg-up. Access to dataData, like electricity is useless unless it gets to everyone who needs it. Having created the PIES standards for data format, there is now a great need for our industry to develop a master plan for the free and open distribution of that data throughout the supply chain. I believe that it is unfair, if not unethical, for a company to compete based on rationing or controlling the free and open distribution of data. Before you assume that I am some sort of business socialist, let me clarify. Businesses must compete freely and unrestrained in the marketplace based on the viability of their goods and service, not on access to some element that supports them. At the risk of overworking my electricity analogy, I believe that no appliance maker should enjoy a competitive market position based on their control of access to electricity for their customers. Data and access to data must be a given, and the competition must be around the ability of software developers and aftermarket companies to create tools to use the data to the advantage of their customers.I realize that this is not a perspective shared by all, nor does it particularly have historic precedence in our market. However, the yellow flag is out, and when we restart this race, it is in everyone’s interest that it is restarted with open access to data for all if we hope to survive as an independent aftermarket. And I’m not talking about just some of the data. Sometimes this conversation about data gets so focused on the sort of "catalog data" that the manufacturers have and maintain that we start to think that is the sum total of the subject.The fact is that everyone is the supply chain has a very significant and important chunk of the data puzzle. True, manufacturers have the product, price and application data we all think of first, but they also maintain a huge library of product attributes, technical information and installation instructions. Equally, if not more important, is the data that others in the supply chain have and keep. Store and distributor data reveals critical sales seasonality that can help stock planners better forecast inventory needs. The movement of older parts is data that can more accurately predict when an item needs to be obsoleted, thus helping to reduce the cost of returns or surplus inventory. Data collected at service facilities yields tremendous insight to help will all manner of forecasting up channel —— from inventory management to productions scheduling. Collecting data at this level provides failure rates by vehicle type, model, and system, even to the component level. Even service intervals and related repairs can be tracked, benefiting everyone from the vehicle owner on up. The key becomes collecting and then moving, storing and managing all this data. Then, making it available on a secure basis to the appropriate parties who can benefit from it.The critical question is, how?A modest proposalHow, I believe is best accomplished with the creation of a centralized, not-for-profit, industry data warehouse (IDW). An IDW is, as the name implies, a centralized storage point for industry data. It actually becomes a "hub" of electronic commerce activity where everyone can go to a single location and download all the industry data that they need to fuel their systems – rather than having to access as many locations as they have suppliers and customers combined.Consider this: If the aftermarket had only 100 manufacturer suppliers (we obviously have many more) and each had 100 distributor/retail customers with whom they also had a data-sharing relationship (again we have many more) that is 10,000 unique relationships. An IDW reduces those 10,000 relationships to 200. The 100 suppliers submit their data to the warehouse including part number additions, changes and deletions once, and in one standard format; and buyers get their updates from a single location in a single format. Because of the flexibility and easy access of the Internet, the IDW data can reside in a central location that allows everyone a single access point.Myriad safeguards assure that access to copyrighted or proprietary data is restricted to the owner of the data and to whomever they wish to grant access. For example, in an IDW environment, a buyer "applies" for privileges to see a specific supplier’s data. That supplier then reviews the application and elects what access to what data that will be allowed. Suppliers (owners of the data) can elect to let customers "see" all or some portion of their data, for example, restricting access to certain lines, as well as specific pricing categories. This authorization remains in effect until changed by the supplier. In every case, privacy is assured and controlled by the owner of the data.With the free and open distribution of standardized data, manufacturers will be able to share instantaneously full and rich data product files with their customers. That means that distributors and jobbers alike will be able to add new parts to their systems without having to wait months for printed catalogs and price sheets. Data errors can be corrected when they are discovered, not months later in some sort of catalog supplement. And counterpeople will have at their fingertips access to product data that previously was accessed only by the product managers of large manufacturers. Everyone will be able to better plan their inventories to reduce investment and improve their ROI.Who and how?So this proposal begs the question, "Who should conceive and design the automotive aftermarket’s industry data warehouse and how will it be managed?" This is a dialog that needs to begin, and soon. There are examples in other industries and market segments, some very close to our own. Some are good, and some are great examples of how not to do something like this. In any event, one great caution needs to be observed. We must be vigilant to be sure that the process is watched and guided to create a utility that will provide equal access for all, not just the few. We suffered through a couple of years where the "dot.commers" came to the aftermarket to tell us how we needed to use the new technology. We don’t need another round of that and we don’t need our own entrenched providers stepping into the process with anything less than altruistic thoughts. The sort of initiative we need is too critical to get politicized or hijacked by those who may only be seeking financial gain. There are standing committees with nearly all our trade associations; even one electronic commerce committee that I believe has representatives from each association that could take up this cause. Certainly, that is a good starting point. To my knowledge, there has been no serious substantive public dialog about an IDW to date. And, I think it is time for that to begin.
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