2021 will be remembered for inventory backlogs, low shipping fill rates and prolonged product delays — not to mention 40-year high inflation and staffing shortages amid a global pandemic. These disruptions and more led Aftermarket Business World to ask these business managers what made the economy stand out. What follows is what they learned from the shifting dynamics to help them fortify a resilient supply chain strategy.
"2021 was a busy year for our small auto repair shop. Customers kept older vehicles for at least another year and invested in repairs and maintenance. We had a lot of big-ticket repair orders," said Amy Mattinat, owner of Auto Craftsmen.
"We purchased cases instead of pieces to ensure that we wouldn’t have issues with parts we use regularly. We also ordered repair parts like brake pads and rotors in advance just in case we needed them because we found our local suppliers did not have stock on hand like they used to. This way, we could get the job done the same day, delighting our customers and keeping our technicians sane."
Amy Mattinat, owner of Auto Craftsmen
"It was the best of times; it was the worst of times," said Paul T. McCarthy, CEO of the Automotive Aftermarket Suppliers Association. "We enjoyed record demand; we also faced the biggest supply chain disruption since World War II. Frankly, it has been amazing how well all of us have fulfilled customer demand given these challenges. Collaboration up and down the value chain showed real results and needs to expand as we progress to whatever comes in the next stage of the 'age of disruption.'”
Paul T. McCarthy, CEO, Automotive Aftermarket Suppliers Association
"It's all about timing your orders right and finding the right partner in the supply chain world with a stroke of luck," said Michael Rukuv, senior account executive, Repworks Marketing. "In fact, stock in luck has grown significantly in 2021 for companies that were able to create that luck for themselves."
Michael Rukuv, senior account executive, Repworks Marketing
"With so many companies going fully remote, companies that require their employees to work in the office are now facing a disadvantage," said Charlie Saffro, president of CS Recruiting. "That poses a risk for growing businesses. As a recruiting firm, we have seen so many passive candidates take new roles simply because they want the flexibility to work from home and their current employer requires them in-office.
Allowing people to work from home indirectly implies that the company trusts their employees because candidates are looking for employers that trust and value them. I’m not suggesting that companies that require employees to be in-office distrust their employees. But there is something about having the autonomy to work at home without eyes on you that makes individuals feel empowered and loyal to their employer."
Charlie Saffro, president, CS Recruiting
"In a word, adaptability: retailers responding to shifts in customer demand and channel preference while diversifying their product and supplier mix; distributors managing inventory flow to long-time and first-time buyers amidst ever-changing delivery schedules," said Michael Chung, director of Market Intelligence at Auto Care Association.
Michael Chung, director of Market Intelligence at Auto Care Association
"I learned to protect my auto repair business by using software (technology) to see which most popular items are available and to stock up on them," said Audra Fordin, owner/operator at Great Bear Auto Repair and Auto Body Shop. "I bought extra cases and drums of oil and chemicals and began stocking parts that I did not carry in the past."
Audra Fordin, owner/operator at Great Bear Auto Repair and Auto Body Shop
"2021 was about availability," said John Kachapis, manufacturer’s representative of Marc Alan Associates. "Retailers and distributors placed pricing updates and new products on the back burner as they worked to fill their shelves. They moved from supporting one key vendor on a category to as many needed to meet fill-rate. This meant buying from additional manufacturers and other distribution sources to locate these products.
Given the strain, many manufacturers did not take on new customers to supply their existing customers. This flipped the typical dynamic of the vendor pursuing the distributor to the distributor pursuing the vendor.
The lack of available products has greatly reduced the typical pricing pressures because customers are desperately trying to fill their shelves with whatever they can get.
These current market conditions have also created opportunities as everyone is looking for additional sources of supply. This resulted in a very busy and a bit hectic 2021."
John Kachapis, manufacturer’s representative, Marc Alan Associates
"2021 represented an opportunity to retain client relationships that we built," said William Nalu, owner of Interstate Auto Care. "Meanwhile, many competing shops closed their businesses to their existing clients. Simply put, 2021 accelerated the 'yes shops' and the 'no shops' divide.
The 'yes shops' spent 2021 saying yes to clients needing service now. The 'no shops' used every excuse imaginable that prevented them from delivering services quickly and efficiently.
2022 could further widen the gap between shops that are willing and able to service clients in a reasonable amount of time and those who can’t or won’t.
And by no accident, does this outlook on customers fall in direct proportion to who we decide on making our number one call for parts acquisition? Those shops that get it know the value of their time and everyone involved; those who don’t may not be around to survive the next business disruption."
William Nalu, owner of Interstate Auto Care
