OE data-driven programs show that the right data sharing process benefits both automakers and the aftermarket. The challenge is finding the right balance that maintains data quality while still providing value to the industry
There is an industry view that automakers are resistant to providing data. However, dabbling in OE data-driven programs shows that the right data sharing process benefits automakers while providing value to the industry.
The challenge is finding the model that benefits the industry and protects data quality. Too loose of a model puts data quality at risk, while too restrictive of a model doesn’t benefit the industry. And finding the right balance is not a simple process.
Automaker Benefits
The release of high-quality data helps improve automaker supply chains. Specifically, helping shops find the right part reduces part ordering errors and overall supply chain costs, and benefits automakers in many ways.
Reduced Dealer Administration
Parts countermen must verify every part number against their factory parts catalog. This process takes time that could be spent helping customers. In short, data errors cost dealer sales. And ordering errors create supply chain issues.
Part Ordering Improvements
No matter how skilled a parts counterman is, some part selection errors will be missed, which results in incorrect part orders. And incorrect part orders leave a supply chain footprint. Some of the effects include:
- Data Errors: Data errors that result in part orders corrupting sales tracking data. This creates false order replenishment data and increases supply chain costs.
- False Stocking Cues: Once a part is ordered and sold it shows up for reordering and stocking. While this eventually fixes itself, costs can increase while the stocking data normalizes.
- Obsolescence: An incorrect order leads to a part return that needs to be resold; or scrapped in the case of low volume part numbers.
- Multi-channel Effect: Bad data creates incorrect orders in the service drive that need to be validated by parts departments. This results in incorrect customer quotes and extra time looking up parts.
- Lost Sales: It doesn’t take long for parts countermen to lose confidence in data quality and start double-checking parts. This takes away from sales time.
Data Revenue
OE driven data sets such as the one supplied by MOTOR Information Systems are in high demand because they deliver accuracy and completeness. Software publishers and data managers are aware of the benefits provided by OE data and will pay for usage rights.
Increased Parts Sales
Commerce systems driven by OE data consistently provide better sales results than systems driven by third-party data providers.
Owner Satisfaction
Errors create problems that frustrate vehicle owners. The release of OE data reduces errors. As more OE data is making its way into the market, this benefit is becoming apparent to automakers and is motivating the release of additional data.
Risks to Automakers of Providing OE Data
The risk of data quality loss is the most significant risk for automakers. For the industry to benefit from OE data, automakers must retain the ability to enforce data quality changes. So, full open-source data carries as much risk as holding it too close.
Loss of Data Quality Control
A serious risk to the industry of open-source data is automakers losing control over data quality. Control helps automakers maintain a single source of truth for the industry. Allowing the data to move into the public domain would lead to data degradation, which makes the data quality issue worse.
So, while expanding data access is important, it’s also important for automakers to maintain control over the data. A great compromise is working with companies like MOTOR Information Systems to act as data stewards.
Aftermarket Capturing OE Sales
One of the perceived risks around releasing the data is automakers losing market share to the aftermarket. But, based on the collective automaker market position, this seems unlikely. Specifically, data collected by 3NG Consulting shows dealers have around 14% of the service business and less than 5% of the wholesale marketplace.
Also, market data shows that providing data in the right formats and contexts benefits the automaker community. For example, OE data-driven parts ordering systems have proven beneficial to the automakers. So, results show that data lifts OE part sales instead of harming them.
The Risks of Freeware
“You get what you pay for” rings true when costing OE parts data. Freeware tends not to be maintained well and data errors carry consequences. So, reasonably priced data with OE control is the best way to preserve industry data quality.
All-Makes Formats
No two automakers design vehicles in the same way. And so no two automakers publish data in the same format. The biggest obstacle to successful OE data adoption is the lack of consistency across automakers. This is where data consolidators such as MOTOR Information Systems play a pivotal role by publishing data in an all-makes format.
Moving Forward
If the current OE data trend continues, it seems likely that automakers will make more data available. It is also likely that the expansion will not come from legal mandates. Instead, automakers are likely to expand data availability because of the benefits being realized.
So, it’s likely that the best method of moving data sharing forward is with open two-way dialogue between automakers and the industry.
Differing Speeds of Change
The shop community moves fast while automakers move slowly. When I worked for an automaker, it took me seven years to launch an $80M per year growth program, so, it’s going to take time for the automakers to expand data licensing permissions. But there is good news. Automaker results when releasing data have mostly been positive, which has automakers seriously considering data expansion. This will likely grow with the right data steward and a positive business model.
Read the fourth installment of the series: 10 Reasons the Aftermarket Dominates the Parts Business
About the Authors
3NG Consulting is a Fixed Ops dedicated consulting company owned and managed by Automaker alumni. Click here to learn more about their data management services.
Learn more about how MOTOR works with OEMs.
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