Aftermarket Insider Issue 73 - (Page 24)

S EGME N T N EWS MARKET EFFICIENCY Labor Claim Best Practices: FASTER, BETTER, MORE COMPLETE! During the Automotive Warehouse Distributors Association (AWDA) meeting in Las Vegas, Nev. in the days preceding AAPEX 2011, the Manufacturers Advisory Council (MAC) of AWDA announced the release of its “Industry Best Practices for Processing Labor Claims.” Under development for over a year, the best practices are the result of a combined effort by the Car Care Professionals Network (CCPN), AWDA and the MAC to address an issue that affects the entire traditional aftermarket. “Processing claims related to damaged or defective parts constitute a huge drain on the traditional aftermarket supply chain,” said MAC chairman Frank Frederick, Walker Products. “Estimates of industrywide costs due to inefficiency, delays and miscommunication run into the tens of millions of dollars. We saw this as an opportunity to help bring more efficiency into the market.” Repair shops, parts manufacturers and warehouse distributors have consistently identified the processing of labor claims related to damaged or defective parts as a major source of frustration, inefficiency and cost. Common complaints by surveyed industry parties included a multitude of forms for processing claims, the lack of timely responses to shops that perform the work and an uneven flow of information about the circumstances surrounding replacement of an allegedly defective or damaged part. COST CONTROL Estimates of industrywide costs due to inefficiency, delays and miscommunication run into the tens of millions of dollars. We saw this as an opportunity to help bring more efficiency into the market. AWDA’s Best Practices are designed to provide the following: SIMPLIFICATION In today’s traditional aftermarket, repair shops and distributors are sometimes forced to deal with multiple forms for processing labor claims. AWDA’s Best Practices relies on a standard claim form that includes all the essential information required by manufacturers and distributors to understand and process repair shop claims. STANDARDIZATION Adherence to AWDA’s Best Practices will minimize or eliminate redundancies in the claim processes used by the various parts manufacturers. The familiarity of a standard form and process will drive an increase in the accuracy and completeness of initial claims – allowing manufacturers to focus on analysis and response. The industry wastes millions of dollars each year compensating companies for parts that are not broken or defective, delaying compensation for legitimate claims and sorting through complex and confusing claims processes. These additional costs are borne by every partner in the supply chain, including the end customer. Use of AWDA’s standardized processes, enhanced and complete communication, and strict timetables can reduce the incidence of bogus claims, delays in compensation and incomplete data related to the claim. ENHANCED COMMUNICATION Manufacturers need to know what went wrong with their parts. Was it truly defective? Improperly designed or installed? Damaged in shipping? The repair shop is the best source for this information. Conversely, shops want to avoid similar problems in the future. Was the part correct for the application? Did they install it properly? If a defect was present, when/how will it be remedied? Manufacturers can provide this information. By opening channels of communication between manufacturers, shops and parts suppliers, vital information can flow, leading to better products and customer service for the motoring public. TIMELINESS Repair shops require speedy action when damaged or defective parts are encountered. Manufacturers want to know about damage or defects quickly, so future problems can be avoided. 24 | AFTERMARKET INSIDER | VOLUME 73 http://www.aftermarket.org/Segments/awda/Labor-Claim.aspx

Table of Contents for the Digital Edition of Aftermarket Insider Issue 73

Aftermarket Insider Issue 73
Contents
President's Message
AAPEX News
Success Happens When YOU ARE HERE!
AAPEX 2011: A Show to Remember
Member Profile
Toolbox: What’s Your Sign?
Association News
Market Intelligence
Segment News
Technology Update
Hot Dates

Aftermarket Insider Issue 73