AKRON (June 16, 2000)—Months before motorists began asking how high gasoline prices would rise this summer, Goodyear dealers were sweating the question of how low fill rates would go.
For many of them, fill rates last year dived to levels below 50 percent and remained there for the start of 2000.
But the good news is, now some long-suffering dealers are actually getting 90 percent or more of their Goodyear orders.
Back during 1999´s fourth quarter, John Murray, purchasing manager of Conrad´s Tire Service Inc., scrambled to buy tires from distributors as the Cleveland-based company experienced a paltry fill rate of 15 percent.
"I was doing some heavy buying on the open market and not directly from my manufacturer," Mr. Murray said.
Fill rate woes continued into the first quarter for the dealership that´s just a short drive from Goodyear´s Akron headquarters, hitting a rate of 25 percent, he said.
Then last April, Conrad´s began to see more and more Goodyear-and Kelly-brand tires arriving directly from the tire maker. Within almost a 90-day period, Conrad´s fill rates have now risen to a current level of more than 90 percent for both those brands, Mr. Murray said, adding that he can now get everything he needs.
"I was at the point where I had to call and see what they had before I ordered it," he said. "Now I just assume that they have it."
Indeed, Goodyear seems to have brought its supply problems under control. Fill rates in many parts of North America are running between 80-95 percent, according to William Sharp, president of North American Tire.
Eliminating 28 percent of the company´s product codes and dedicating one day a week—called "Customer Tuesday´´—to examining product supply issues have fueled the turnaround, he said.
On Customer Tuesdays, Goodyear calls all of its North American Tire plant managers and reviews their "performance against the ticket," Mr. Sharp said. The company also meets with other regions that supply product to North America to make certain they are meeting the needs of dealers.
That initiative has brought about a noticeable change. Russ Crowner, co-owner of Crowner Tire in Ames, Iowa, told Tire Business his fill rate has climbed from last year´s low of 25 percent to 95 percent.
"I have five to six items on back order now compared to 10 pages last year," he said.
With Goodyear being his bread-and-butter-brand, Mr. Crowner said that last year he would order larger quantities than needed for his 11 stores and hope he would receive all he needed.
"You get a little crazy because you hope they get your name on the list and ship you something," he said.
Now, he said, "somebody is paying attention" because Goodyear´s plants are producing the right tire lines and sizes.
After seeing a fill rate of 35 percent last June, Kurt Hegemier of Hegemier Tire Service in Wapakoneta, Ohio, had considered adding another brand to his lineup of Goodyear and private labels. Now, with fill rates at 90 to 95 percent, he´s not thinking of carrying other manufacturers´ lines.
Jerry Galli, president of San Carlos, Calif.-based A.J.K.L. Inc., a three-store dealership, also is now happy with fill rates after seeing 23- to 32-percent rates in 1999. He said he has noticed a shift in Goodyear´s attitude to considering tire dealers as its customers instead of tire consumers.
"They have forgotten us in the past, and they seem to be getting better now," Mr. Galli said.
But he admitted there are aspects of Goodyear´s service that need improvement. A.J.K.L. Tire doesn´t purchase all of its Goodyear and Dunlop lines directly because Mr. Galli can find them cheaper from wholesalers.
As a supplier to government agencies within the San Francisco Bay area, he still had to deliver tires to those agencies despite back orders from Goodyear. Yet, the tire maker hasn´t credited him for making those deliveries because he was forced to buy his tires elsewhere.
Conrad´s Mr. Murray also isn´t completely impressed with Goodyear´s turnaround because—although fill rates no longer are an issue—service on Kelly products is not what it used to be. He said the ongoing integration of Goodyear and Kelly computer networks has created delays in shipments and some product shortages.
Because Kelly has not yet been combined with Goodyear´s distribution centers, Conrad´s relies on receiving most of its Kelly lines from a Goodyear warehouse in Georgia and the rest from a Goodyear warehouse in Pennsylvania, he said.
Mr. Sharp admitted that "Kelly is not working the way it used to, or the way it should." But he didn´t elaborate on what steps Goodyear is taking to resolve those problems other than that it is looking at initiatives "to make the Kelly experience more similar to how it used to be for our Kelly retailers."