Last fall, a newly formed ARA committee consisting of representatives from the recycling and collision divisions was formed to improve communication between the two industries while seeking solutions to ongoing recycled parts procurement issues.
by Ken Hendricks
Previous iterations of the BCAR/CRD liaison have come and gone before. While past committees have always been productive from an engagement perspective, they often fell short of providing real, practical solutions. Moreover, while the dialogue was beneficial for those who served on the committee, there was little benefit (if any) for the wider industry audience.
This new committee is approaching things from a different perspective. It is being facilitated by ARA Senior Advisors Ken Hendricks and David Ribeiro, who are employing a more methodological approach than what has been utilized in the past. Open dialogue is always good for airing grievances, but without some type of methodological analysis, everything ends there, and nothing is resolved.
The first step with this new committee process was to create an inventory of all grievances on both sides. We listed roughly 60 outstanding issues with some going back 20+ years. Some of these, however, were new issues that appeared only after ICBC chose a new system for collision shops to search for recycled parts—namely, replacing the Allied system with Car-Part.com.
The switch to Car-Part.com was rushed and was implemented without proper consultation with industry. ICBC even conceded as much. However, it is the system we have now, so we must make the best of it, which is why we felt it was crucial for representatives from Car-Part.com to have a seat on the committee and join the discussion.
Although many issues were brought forward initially, they could all be listed under one of three primary categories: problems resulting from improper or little communication, quality control issues, or problems resulting from a lack of policy or standard business practice within the industry. Categorizing these grievances under a few common causes reduced this list to a few key variables.
Our next step was to go through the entire recycled parts process and examine the process each step of the way. This next step was important, as it allowed both sides to hear from each other. There were many points of contention throughout the entire process. Some of these have been long-standing issues, issues around quality, the wrong part being delivered or ordered, returned parts, and many others. While some of these issues can be solved through technology or policy, most come down to either lack of communication or inefficient business practices. Having clear standards will help, but the execution of those standards is often problematic, particularly if the outcomes are not clear.
Perhaps as no surprise, the biggest issue facing the recycled parts procurement process is pre-pricing parts on the Ca-Part.com platform. Accurate pricing has always been a challenge for a myriad of reasons, but it has certainly moved to the forefront of the discussion since ICBC replaced the Allied system with Car-Part.com. Some recyclers do inventory and price their parts to varying degrees, yet many others still use the fall back of “call for price.” There are many pros to pricing your parts on the system, but recyclers also list reasons against a procurement process based solely on price. Shops, on the other hand, complain that having to constantly call for a price is inefficient and antiquated given the technology of today.
ICBC has responded by enacting a policy that limits the number of calls a shop will have to make in the absence of pricing. They may take this policy even further to persuade recyclers to list pricing on the system. But as mentioned before, it is one thing to create policy and another to implement it. Ultimately it will have to come down to what makes the best sense for the industry, the customer, and for the individual business owner. Before rushing into any policy decision, it is important to fully understand the issue and consider all sides.
This, then, is the objective for our newly formed committee. It is our aim that after our initial dialogue we can begin to bring some resolve to some of these issues. Resolution will come through a combination of communication, suggested business practices, technological solutions, and deciding where we required policy. In cases where ICBC policy is required, any suggestions would be jointly proposed by both parties. But by and large, this would be a last resort. Thus far, the newly formed committee has only met twice, with bi-monthly meetings scheduled for 2024.
Our plan for 2024 is to begin facilitated discussions for finding solutions to our issues. This will certainly mean meeting as a committee, but we will also try to obtain further feedback from the wider industry. This may involve surveys, hosting a webinar discussion, or simply engaging your liaison representatives.
We hope that the enthusiasm continues for these sorts of facilitated discussion across all ARA divisions. It is one of the unique features of the ARA that we represent diverse industries under one umbrella, but it also relies on the level of engagement of industry. Stay tuned!