PHILADELPHIA—Pieces parts. When you can't get them when you need them, you've got a problem.
Members of the Tire Alliance Groupe (TAG)—which includes some of the nation's largest tire dealerships—are hoping that once their new approved vendor agreement with Pep Boys—Manny, Moe and Jack kicks in, they can count on less hassles and peppier auto parts supplies.
After a presentation from Pep Boys at TAG's summer business meeting, held in July in Napa, Calif., dealer members decided to participate in Pep Boys' APD—for "Auto Parts Delivery"—national account program.
The deal will provide TAG members with undercar parts, brakes, shock absorbers, oil filters—parts and supplies "for any kind of work that's done in a tire store," said Dan Beach, president/CEO of the Oxnard, Calif.-based dealer buying organization.
The addition of Pep Boys strengthens TAG's supply chain, which already included a national account program with NAPA, another major nationwide vehicle parts supplier.
Two items TAG won't be buying from Philadelphia-based Pep Boys, though, are its Futura and Cornell private label tires. Most TAG dealers carry a wide swath of major brands including the group's own Prodigy private brand, manufactured by Yokohama Tire Corp.
The new supply arrangement, operated through Pep Boys' wholesale parts division, is what's known as a "first-call program," Mr. Beach said, meaning that if a repair shop doesn't have a required part in stock, it typically calls other parts suppliers in the area until it finds what it needs.
The trick is for a dealership to leverage its size with several parts suppliers to get the best pricing and service—and get the part as quickly as possible.
"So you try to find somebody that you can give a lot of business to, and it would have to be somebody with a lot of point-of-sale outlets," he said, such as the industry's big players like NAPA, Carquest, Autozone and Pep Boys.
"When it comes to parts suppliers for retail stores, generally you need somebody that is in the market where all your stores are located," Mr. Beach explained, "because the nature of retail today is going to direct supply, store by store. Generally, our (TAG) member retailers don't warehouse and redistribute parts to their stores. They require their suppliers to do that.
"And that can be a difficult situation with parts suppliers...."
While Pep Boys can't get to all of the more than 1,350 retail outlets TAG members operate, they can supply many of them, he said.
The TAG deal is an effort by Pep Boys to boost its growing APD business, which began 3 1/2 years ago and now has 14 national accounts.
When Robert Resco took over as the director of national accounts a year ago, APD had about five customers. "In the last year," he said, "we've really picked up the number of accounts that we have. Firestone is our largest national account right now."
Earlier this year, APD boosted its distribution reach when it was chosen as an approved vendor to Procare Automotive Service Solutions L.L.C., based in Cuyahoga Heights, Ohio, near Cleveland. Procare is a 104-store auto repair chain that operates in Ohio, western Pennsylvania and Charlotte, N.C. Formerly known as BP Procare and operated by BP Amoco P.L.C., it was purchased from the oil company in 1999 by Sullivan Acquisition L.L.C. of Guilford, Conn.
Pep Boys will provide Procare stores with aftermarket automotive parts and supplies as well as Cornell- and Futura-brand tires—"any parts that are available in our stores," Mr. Resco told Tire Business. Since shedding itself of major brands a couple years ago, Pep Boys now only carries those two tire lines.
He would not provide any potential sales numbers he expects from Procare, but jested that they will likely "not be as much as I'd like."
Pep Boys' current store count is 663 in 38 states and Puerto Rico; its APD system operates within 570 of those outlets.
However, the program is "completely unidentified" with Pep Boys. Stores that have APD include a commercial sales manager who handles all commmercial customers; delivery trucks and drivers; and a separate computer system within the stores "that allows us to do our commercial pricing plans, which are different from retail," Mr. Resco said.
But the nondescript delivery trucks either have no visible identification or simply have "APD" on them, and employees—even the invoices they give to customers—also are not identified with Pep Boys.
So a service shop's customers don't know where their parts are coming from.
Most major parts retailers do business like that, Mr. Resco said. "That way, the customer in the waiting room doesn't see a Pep Boys truck, then goes home, calls a Pep Boys store and asks, `How much was that part for my car?'"
For TAG member dealerships, APD was just introduced to Tri-State Delta Tire Co., a warehouse distributor in Statesville, N.C. But Mr. Resco said the TAG rollout will be a slow process that likely will take at least six months "because some members want me to do some pricing comparisons."