Automotive News - September 23, 2019 - Best Practices Supplement - A10

10 | SEPTEMBER 23, 2019
D I E H L A U T O M O T I V E G R O U P, B U T L E R , PA .

CENTRAL BENEFITS

Off-site distribution center
eases stores' space crunch
Published in Automotive News Dec. 31, 2018

Danielle Szatkowski
autonews@crain.com

iehl Automotive Group's two FCA US
dealerships in Pittsburgh's western
suburbs are convenient for many potential customers but challenging because space at the stores is tight.
President Corina Diehl's solution was to
consolidate inventory management and delivery off-site by building a 10,000-square-foot
distribution center within 10 miles of both
stores. But coming up with the idea was easier
than making it happen, as Pittsburgh's many
hills made finding usable
space near the stores difficult.
Ultimately, Diehl bought
a five-acre parcel visible
from one of the city's busiest highways, creating an
opportunity for the group
to advertise itself to passDiehl: Planning
ing
motorists. She said the
collision center
total cost for the land,
building and infrastructure topped $1.5 million, though the large investment would be
worth it in the long run.

Shared expenses
Diehl said the distribution center has enabled the stores - CarRight Chrysler-DodgeJeep-Ram-Fuso and Diehl Chrysler-DodgeJeep-Ram of Robinson - to streamline a lot of
processes, including vehicle receiving, reconditioning and photography.
"By taking two stores that each does 100 new
[vehicles] a month in sales, all of that inventory
funneling from all directions - new as well as
used - we can control what's going on and
have more accountability," Diehl said. "In addition, by having a distribution center off-site, we
don't have to worry about car carriers getting in
the way of normal business operations."
Together, the two dealerships employ 160 of
the group's 500 workers. The distribution center, which opened a year ago, employs 10 people, which is fewer than it would need to accomplish the same operations separately at
each store. There are additional savings from
sharing expenses such as chemicals.
"We've been able to cut back at the recondi-

Diehl Automotive Group's distribution center is part of a plan to consolidate some tasks within 10
miles of two Pittsburgh-area dealerships.
An off-site distribution center for two
Pittsburgh-area stores helps lower
costs while increasing inventory
control and accountability for new and
used vehicles.

tioning departments at the stores, due to moving the employees to the distribution center,"
Diehl said.
"We have the ability to have 55-gallon drums
there, which has lowered the chemical cost
and the savings on theft because bulk products are difficult to take home. The processes
have been improved and there is direct accountability."
Additionally, Diehl said she plans to have
predelivery inspections performed at the distribution center to lower costs.

Used-vehicle detailing
In addition to moving the car carrier drop
points away from the dealerships, the distribution center has enabled the stores to consolidate their used-vehicle detailing departments, said Matthew Diehl, the group's vice
president and Corina Diehl's son.
Matthew Diehl, 30, said it has been a struggle to generate detailing efficiencies, but the
group is working on it.
Diehl Automotive, which has six other dealerships in western Pennsylvania and eastern
Ohio and sells 400 new and 200 used vehicles
a month, expects to realize more benefits after
a 30,000-square-foot body shop under con-

struction on the distribution center property
opens next summer.
"With the addition, we will be able to relocate and drastically expand our current collision center while also creating a heavy-duty
truck service center in the previous collision
space," he said. "As an added bonus, we will
have a photo room within the new facility,
which will improve our vehicle marketing
process and add the much-needed consistency we are lacking."

Fixed ops future
Corina Diehl said the collision center, which
will be the group's fourth but the first outside a
dealership, will have an environmental focus.
"We are doing everything as efficiently as we
can, which tends to cost more, but at the end
of the day, the savings will be there," she said.
"This collision center will allow me, from a
fixed perspective, to increase sales. Margins
keep shrinking on the front end, and the collision business is really good if you are good at
it."
Diehl said having a body shop off-site
should help the group attract more vehicle
owners who might have never visited either of
its nearby dealerships.
"We're building the body shop, specifically, because we feel the nature of the business, economically speaking, is moving toward fixed ops and away from sales," she
said. "We see most profit in the fixed ops portion of our business in the future." a
Tom Worobec contributed to this report.

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