Thursday, 26 August 2010 18:11

Recyclers and Shops Meet to Discuss Used Parts Usage

The two gatherings of auto recyclers and collision repairers took place only one year apart, but they could not have been much further apart, at least initially, in tone and tenor.

“A year ago, a shop owner stood up at the start and all but accused the auto recycling industry of conspiring against shops,” said Mel Hunke of the Quality Replacement Parts (QRP), a coalition of auto recyclers in nine states. “By the end of that meeting, and from the start of the second one, the repairers saw that recyclers were not the enemy, and the recyclers saw that, as an industry, they have some genuine quality and customer service issues they need to address. Everyone came into that second meeting with more of an interest in, ‘Okay, how do we improve the situation?’”

The next of these “Recycled Parts Roundtable” meetings, which are being organized by QRP as part of its effort to discuss and work toward resolution of issues related to the use of recycled parts in collision repair, will be held November 4 in Las Vegas. The meetings have been facilitated by industry consultant Lou DiLisio, and have brought together about two dozen representatives from auto recycling and collision repair companies from around the country.

One of the key topics of discussion at the a recent meeting was the need for more complete and accurate descriptions of recycled parts and their condition. The group agreed that not enough recyclers use—and far too few repairers are aware of and understand —the standards and grading codes developed by the Automotive Recyclers Association to help both recyclers and shops understand the condition of used parts.

The attendees at the meeting agreed that recyclers need to improve the accurate use of these systems within their industry, and should review this information with their repair shop customers, perhaps providing shop estimators and parts managers with laminated copies of the grading and damage codes.

“It has come through pretty clearly at these meetings that many of the issues boil down to communication,” Hunke said. “Repairers simply need to communicate what they need, and the recyclers need to honestly reply whether they can meet those needs or not.”

The group discussed that educational and reference materials on these parts and damage description systems are available at “Standards & Codes” on  the ARA website (www.a-r-a.org).

Another potential win-win for recyclers, insurers and repairers could result if recyclers helped make shops aware of parts they are likely to need in a repair but that are not typically purchased from a recycler—in part because they often are not on an initial parts order and will likely be ordered from the OE during the supplement process.

“If you buy a fender, hood and bumper from me, but you also need the windshield washer jug and battery tray and all the other stuff recyclers are currently crushing, we can amortize our overhead and dismantling costs over more parts, and you can increase your alternative part usage and save totals,” Hunke said.

“I think recyclers should help educate repairers by showing them that in a typical accident, these 10 key things get damaged and you typically order these five things, and there’s five things you don’t typically order,” DiLisio suggested. “I think everybody has some responsibility here.”

DiLisio said there is also an opportunity for recyclers to educate themselves and their shop customers about OEM recommendations, perhaps through subscriptions to the automaker repair information websites or third-party information providers.

“I was just in a shop with a Kia that had the airbag blown,” DiLisio said. “Kia requires in that situation that the wiring harness be replaced. It’s $1,100. If the recyclers understood this, there’s absolutely an opportunity to sell the shop a wiring harness if you let the shop know that—and I bet most shops don’t have that information.”

Similarly, DiLisio said, recyclers can add value to their shop customers by having and sharing information that can help the shop ensure it will have the parts it needs to prevent delays to a job.

“If you sell something that includes one-time fasteners, my view is you should be letting the shop know that,” DiLisio told recyclers at the meeting. “I think you’ll sell more parts because the repairers will gain that confidence and trust and utilize you more.”

There was also discussion at the meeting about where the industry stands in terms of electronic systems for ordering of recycled parts. The group discussed that the lack of VIN decoders within the inventory management systems used by recyclers limits a move to all-electronic parts ordering in the short-term. But QRP representatives at the meeting  said they have a process called “Auto Sender” that strips the administrative information from an estimate—to protect shop and customer data privacy—and sends the body of the estimate to the recycler in order to check for parts prices and availability. A committee was establish within the group to explore more fully-electronic parts ordering options. Hunke said QRP plans to continue holding such roundtable meetings to help move some of these issues forward.

“We don’t have any illusions that there aren’t still some people out there, and maybe even at these meetings, who say, ‘If I had my druthers, I’d never use a used part,’” Hunke said. “But there are others who are realistic about it and say if we don’t find ways to use more recycled parts more profitably, we’re going to lose some insurer repair programs and the repair is just going to go some place else. So the only sensible thing for all of us is to address how are we going to process used parts so that everybody can come out with some kind of a win.”