Underlining the supply chain crisis currently facing the industry, an online poll during the most recent ARC360 webinar found that 73% of respondents said they are experiencing delays in parts supply on a daily basis.
A further 27% said the challenge was intermittent, with not a single respondent saying that it was business as usual when it comes to receiving the parts necessary to complete repairs.
Taking part in the webinar – Supply Chain 2022 – on Wednesday 20 July were Chris Jesson, Key Account Manager, TPS; Tom Rumboll, CEO, Synetiq; and Paul Sell, Director of Trend Tracker.
Disruption
Trend Tracker has been producing monthly snapshots highlighting the extent of disruption to global supply and based on this data has revealed that shipping reliability ‘fell off a cliff’ in 2020.
Paul said, “It has been starting to improve through 2022 and that improvement is expected to continue through 2023, but it won’t get back to normal until 2024.”
He said that although most parts now arrive on schedule, those parts that are delayed are often held up twice as long as previously, pushing average delivery times to near the 40-hour mark.
For bodyshops, that can spell disaster as the entire repair can be held up.
Benchmark
Chris said, “We believe our supply of parts is strong. We have set ourselves a benchmark of 97% and we are there or thereabouts. But, at the moment, the biggest parts issue we have is with intelligent parts that include semi-conductors. There is huge demand for computer chips and businesses from across all industries are now competing for them.”
It’s not likely this situation is going to ease any time soon.
A second online poll found that 67% of respondents said that disruption had remained ‘consistent’ over recent weeks and months, with more than a quarter (26%) believing it had even got worse. Only seven per cent said it had improved.
Backing up Paul’s forecast of a further two years of challenge, Tom said, “Globally, supply chains are starting to ease, but there is a backlog of needs that have not been met and that means the mismatch between demand and supply will continue.”
Solutions
In terms of solutions, 57% of respondents to a third online poll said they had broadened their supply networks and sources, 52% are implementing different working practices, while 48% are now trying to provide their customers with alternative choices.
In many cases that means the use of green parts.
This is being driven partly by insurance companies – “We are getting orders from insurers for thousands and thousands of used parts,” Tom said – and partly by consumers.
Focus
Paul said that Trend Tracker research had identified a much clearer focus on environmental processes and products coming from customers, and Tom suggested that greater adoption of green parts across the industry was a no-brainer.
Apart from an average reduction in carbon emissions of 72%, the cost and time savings were, he argued, impossible to ignore.
He said, “Supply disruption has led to a shift in mindset with people thinking they need to do things differently and look for different partners, and that is resulting in a real demand for greener parts. So in some ways what’s happened has been a positive experience; the carbon savings are evident, the cost savings are evident and the acceleration in repair times is evident. I hope this is the start of a much wider trend.”
Communication
In the meantime, greater communication between suppliers, work providers, repairers and consumers could go a long way to easing the pressure simply by setting realistic expectations.
Chris said, “We can handle parts delays, but we need to know when the part will arrive so we can schedule repairs around that. Our focus now is on improving communications so we and our customers both know what to expect.”
Technology
He also said that technology can be used more effectively to streamline parts ordering by integrating supplier systems with bodyshop systems to make it an automatic process.
Tom agreed that there are solutions to be found in greater implementation and use of technology.
He concluded, “We’re using data to identify parts that weren’t previously in demand and then ensuring we have them in stock. That will help us meet surge demand from customers. No one knows what is coming, but the best way to predict the future is to create it.”
ARC360 would like to thank its Corporate Partners Solera Audatex, BASF, BMS, CAPS, Copart, Emacs, Entegral, Enterprise Rent-A-Car, Innovation Group, Mirka, Nationwide Vehicle Recovery Assistance, S&G Response, and Sherwin Williams as well as Partners asTech, The Green Parts Specialist, Indasa and Prasco, and Associate Partners Gemini, Thatcham Research and Trend Tracker.
