North American OEMs and providers have called for greater flexibility in service and operating hours at dealers, even proposing a 24/7 scenario, something that elicited a mixed reaction from the dealer community attending last week's Finished Vehicle Logistics North America conference held in Newport Beach, California.
John Symes, president of Symes Automotive Group, said his dealership group could not do it and was joined by Todd Kostrzewa, general sales manager at North County Hyundai, who said it compromised the level of quality. But he added that there was room for negotiation on deliveries off hours in certain circumstances.
Linda Brandl, vice president and general manager, Automotive at Union Pacific Railroad, said that 24/7 operations were something that dealers or dealer yards needed to get used to, noting that a number of North American production plants are moving to three shift patterns and limited summer shutdowns. As rail deliveries moved to round-clock-distribution to help alleviate a wagon shortage, she questioned whether dealers would be willing to make such an adjustment. "We are getting backups at the ramps because the dealers are not in harmony," she exclaimed.
But there was a sense that players on either side of the forecourt fail to communicate with or understand each other, as their interests were more aligned than would otherwise be suggested. Kostrzewa, for example, also called for an improvement in the relationship between trucker and dealer to make the buying experience better for the customer. "It would be better if we can deal faster with the trucker because they can get back on the road. It would make everything faster for everyone," he said.
Albert Gallegos, director of international affairs at the North American Dealer Association (NADA), said its surveys had found that 35% of dealers already have extended service areas, which meant beyond 7pm. He suggested that closer communication with dealers could lead to workable compromises. "If you could identify the ones that have these extended hours, you can then see if they have the right staff on site that can do the check in," he said. " I also expect that the hours will extend beyond even 7pm in the future."
Honda's Scott Crail also suggested that dealers might be more open to changing their hours if OEMs asked them to and made efforts to work with them. He revealed an effort to get dealers to increase their hours of service, which would help to clear congestion at destination rail ramps. "We had an Acura zone, for example, that simply told its dealers that they were all 24/7 unless they said otherwise. We only had two stores push back."
Gallegos suggested that the first problem was that few dealers had time to really think about and understand logistics. "In our surveys we have found that the number one concern aside from sales among dealers is pressure from OEMs regarding investments in their facilities, while the second is related to regulation," he said. "Logistics just isn't a top concern for them."
But he stressed the importance of educating dealers and encouraged logistics executives from carmakers and logistics providers to communicate more, particularly in forums such as the NADA conventions, which gather together thousands of dealers.
This position was born out by Larry Burns, director of parts and service at Scott Robinson, a Honda dealership. He suggested that carmakers and logistics providers needed to build better relationships with dealers, including key operational staff that work with truck drivers for deliveries, and that from this starting point more dealers might find ways to accept late or early deliveries.
Burns also added that he personally never understood how complicated the logistics processes was until he attended the conference. "I never knew how difficult and complicated vehicle logistics were and it is certainly something that I will transfer back to my staff and which we will share across our management," he said.