Exxpress Tire talks strategy

NOORD, Aruba — Dunn Tire L.L.C.'s Exxpress Tire Delivery unit is using analytics and a recently conducted survey of its wholesale tire customers as a guide to help it grow and enhance service and efficiency.

The goal of the research is to provide a better understanding of the tire marketplace and of customers' needs, improve operational efficiency and aid in the development of a plan for sustainable growth, company officials told tire and car dealer customers attending the Exxpress Tire Delivery Dealer Trip, March 7-11, in Aruba.

This effort comes at a time of rapid evolution in the retail tire market, increased use of technology to sell and market tires, ongoing tire dealership consolidation and growing competition from franchise car dealerships and other large tire chains, Steve Clave, managing director, wholesale operations, for Dunn Tire, said during a presentation at the trip's business meeting.

"The game has changed," he said. "We are going to have to embrace these changes moving forward."

To better understand how Exxpress Tire is performing, the company surveyed its 4,000 customers, getting a response rate of 5 percent, Mr. Clave said.

Questions focused on the performance of Exxpress Tire delivery drivers and customer representatives, handling of delivery issues, whether customers would recommend Exxpress Tire to others and the company's overall service.

"I was tickled pink," Mr. Clave said of the mostly positive results. "I'll be honest, I was scared. ... But the only way we're going to find out, the only way we are going to make improvements, we went directly to the market and asked the question."

Exxpress Tire began using analytics last year to better understand its business, such as its cost per mile, route/truck return on investment, handling frequency, units per person, load times and inventory management for optimal velocity, Mr. Clave said.

Armed with this information, Exxpress Tire aims to reduce the frequency of times it touches a tire, increase pull accuracy, improve driver effectiveness, do a better job of sharing best practices, streamline processes and make better use of technology to improve decision making, Mr. Clave said.

Looking back at 2018, Mr. Clave said Exxpress Tire had a solid year, growing 7 percent, although it finished shy of its budgeted goal of 11 percent. Company officials attributed this shortfall to a fall-off in sales in December, an occurrence, they said, that impacted everyone in the industry as far as they knew. Growth came in all five Exxpress Tire markets: Buffalo, Rochester and Syracuse, N.Y., and Pittsburgh and Erie, Pa. National account business improved 25 percent.

Exxpress Tire continued its growth efforts in the Pittsburgh area, its newest market, during the past year, Mr. Clave said. The company completed the installation of electronic routing in all of its warehouses. Electronic routing is a software application that optimizes data and lays out the most efficient routes for the company's delivery vehicles. The software also allows the measuring of performance and provides operational benchmarks and logistics.

For 2019, Exxpress Tire Delivery is forecasting 6.5-percent growth. "The percentage might be down (from 2018), but you're growing at a bigger number," said Paul Pittner, Dunn Tire managing director of procurement and supply chain, during an interview with company executives following the business meeting. "It comes down to what we can physically handle."

As the Exxpress Tire wholesale operation has grown and surpassed 1 million tires in yearly shipments, the company hired its first full-time logistics and distribution executive in October. John Judge, supply chain director, has 25 years of logistics experience in the U.S. Air Force and continues his service as a lieutenant colonel in the National Guard. In addition, he spent 10 years at Praxair Inc. in logistics and supply chain.

"Logistics and distribution can be a lot more successful if there is a little more science put into it and a little more study and planning and training put into it, and so we really wanted to have somebody spending full time on that side of the business," David Simons, Dunn Tire executive vice president and CFO, said.

To get the most out of its warehouses, the company has gone to stacking tires four tiers high, the executives said. "We are gearing up for an even better business in 2019 than we had in 2018," Mr. Clave said.

While Exxpress Tire has no current plans for a new warehouse or an expansion to current facilities, "we know we need to have a bigger and better building in Syracuse and a new, bigger building in Erie, Pa.," Mr. Simons said. Those are probably a couple of years down the road, he added.

The company has the ability to expand in Rochester, he said, "if some things fall our way."

"What we're trying to do is figure out what our absolute maximum capacity is to get tires in and out per building, whether we had it shipped, whether we changed hours or do different things," Mr. Pittner said. "We're figuring out what the maximum capacity to handle per day in the building is."

After experiencing some technical challenges in 2018, Exxpress Tire expects to debut a revamped website in 2019's second quarter. A key feature will be the site's ability to provide the delivery date, once an order is placed.

The new website will offer improved navigation, the ability to communicate news, events and other content better, as well as enhanced searchability. The website will be compatible on laptops, tablets and smartphones, Mr. Clave said, "and will become the company's primary communications tool."

Talking briefly about the Exxpress Tire Car Care Centers dealer marketing program, Mr. Clave said the company has reduced the cost of social media marketing, making it a silver level enhancement from gold. The move is aimed at helping smaller independent tire dealers create top-of-mind visibility in their local markets.

"Some of us are technically averse, social media averse," Mr. Clave said. "This is a requisite (today). We can no longer ignore social media and think, 'Yeah, well that is this generation.'

"Now this is us," he said. "And in many cases, it's our parents."