MEMPHIS, Tenn. (Feb. 4, 2003)—In a bid to adjust its product lines and relieve warehousing pressure on its dealers, TBC Corp. plans to launch its Power Line inventory management system by the second quarter, the company said.
Aimed at streamlining the company's many tire lines, the system was introduced at its annual dealer meeting in January, along with an expansion of the Fulda line and new light truck offerings.
Gary Paulson, vice president of sales for the Memphis-based private-brand marketer, said each of TBC's private label passenger car brands—Multi-Mile, Cordovan, Vanderbilt and Sigma—will have its own Power Line. Each line includes about 45 different sizes in 14- to 17-inches, 50 to 80 series and S-, T-, H- and V-rated. Within each brand, TBC hopes to establish a good-better-best program.
“The thought process is, we're trying to rationalize the lines and reduce inventory at the dealer's place of business and reduce SKUs because there's a lot of duplicate product out there,” Mr. Paulson said. For example, the Multi-Mile Grand Tour TR/HR/VR line has 41 sizes from 50 to 75 series and 15- to 17-inch fitments.
Mr. Paulson said TBC hopes dealers can serve 85 to 90 percent of their customers with just one line. “(The dealer) doesn't have to worry about trying to find the size or speed rating in another line or, God forbid, in one of our competitors,” he said.
But that's exactly what Squirrel Hill Automotive in Pittsburgh does when its stock of Multi-Mile tires doesn't cover what a customer wants, owner Ron Gerenyi said. About 90 percent of the time the private brand's assortment handles his customers' needs, he said.
“I do have to sometimes look around,” he said, adding the seemingly infinite number of sizes and speed ratings make stocking a chore for his 25-year-old business.
Mr. Paulson said each Power Line will keep the unique tread and design of the brand to maintain product differentiation.
The Fulda line, launched in 1997, is being repositioned price-wise to be more competitive with performance private brands, Mr. Paulson said. The line—with more than 40 sizes—is made by Goodyear in Germany.
With the Fulda and Power Line configurations, Mr. Paulson said some tire offerings will be created while others subtracted. Though he declined to identify them, he said the company predicts a couple of product lines that had filled in size or speed rating gaps will be eliminated by the Fulda expansion.
“But we're going to let our customers vote with their order books,” he said.
Andy Dudash, TBC vice president of purchasing, said at the customer meeting that the Power Line concept can reduce dealers' inventory by more than 100 SKUs, thereby also reducing stocking, storing and promotion costs.
“We think the industry is going to be moving in this direction to rationalize the inventory investment that's required to cover the sizes that you need today,” Mr. Paulson said. “It's very difficult to do that in five or six product categories.”
Mr. Dudash also said TBC is working on a program to enter the market for sport performance tires in sizes larger than 20 inches. The market for sport performance vehicles and light trucks continues to be a niche, he said, but the products are likely to move into the mainstream.
For now, TBC is introducing the Sport RLT line with nine of the most popular plus-fitments in the market, from 18 to 23 inches. Mr. Dudash said he expects the sizes to expand in the future.
“Entry into this segment is very important to TBC's overall strategic product planning, and the introduction of this new product line at TBC supports our goal of offering our customers a more complete program,” he said.
Initial production of that line is planned for late second quarter or early third quarter.
For light trucks, the company also announced a new Cordovan line, the Wild Trac Radial LTR, that is comparable to the Multi-Mile Wild Country Radial XTX unveiled in 2002. The LTR will be available for shipment by the middle of the second quarter, and the Cordovan Wild Trac RVT will be phased out.