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Autotrade case study: Ford Retail

After four years of planning, developing and fine tuning, Ford Retail has finally taken the plunge and split off its parts wholesale businesses to form a standalone company.

@First Parts was launched in July last year.

It moved the Ford-owned group’s parts business to a centralised structure which was intended to transform the operation into a predictable service for parts customers.

Chris Hayden, Ford Retail chief executive, says: “Predictability is the key. There must be a consistent routine that dealers can rely on.”

Ford Retail’s trading brands of Brunel Ford, Dagenham Motors, Heartlands Ford and Polar Ford all gave up control of their parts for the new centralised @First Parts company.

The business serves 6,500 trade customers and 55 UK Ford dealerships.

The organisation has four main distribution centres established in Wakefield, East and West London, and Bristol. 

Linking to these are eight hub sites with Ford Retail’s existing local dealers as ‘service parts points’. The service works in tandem with Ford’s own 3D delivery service (see panel).

Heading up Ford Retail’s @First Parts is Angus Brown, a man who clearly loves what he does. 

As AM walked with him around @First’s latest parts distribution centre in Wakefield, Brown’s eyes lit up when showing how things were run, running his hands over body panels as he searched for any dents or scratches they might have encountered on their journey to the shelf.

@First’s 30,000 square foot warehouse, dubbed ‘NYPD’ (North Yorkshire Parts Delivery), is divided by three different coloured lines on the floor across which certain employees cannot go.

The production line

The three colours identify the pickers, checkers and loaders and ensure the correct part is chosen. If there’s a mistake at any point of the chain, there are three chances to rectify it.

The smaller and most frequently ordered parts are kept towards the front of the warehouse to maximise speed, while the larger parts are stored further back.

When the parts are ready to go, they’re loaded onto NYPD’s fleet of 23 @First branded Transits which have one route each, make a minimum of two deliveries to individual dealers a day and stop off at 480 dealers in total each day. 

Between them, the fleet covers more than 12,000 miles a month.

Each driver agrees to partake in random vehicle checks each week as soon as they’ve left the parts centre to check that the correct amount of stock is being taken away.

Hayden says: “We have a wonderful team working for us, but you do have to be cautious. Each of our drivers agreed to the checks when they took the job.”

All parts delivered can be returned as long as they’re saleable and dealers will get a credit note that can be used to buy other
@First parts.

NYPD also has its own retail desk for dealers. Hayden says: “Some dealers are totally organised, but some run their businesses by the seat of the pants. 

“The retail desk allows the dealer to come in, talk to a human being and actually see the part.”

Part sales already contribute £80 million (£48m trade and dealers, £32m workshops) to Ford Retail’s £1 billion turnover in the UK.

Working independently

Brown was keen to point out that @First is totally independent of Ford and is under pressure to turn a profit like any other business. It goes head to head with companies like Euro Car Parts.

Brown says: “I’ve been around for several of these credit crunches in the past and it does help to have an income stream which has nothing to do with selling new cars.”

Ford Retail dealers used to be in control of up to £30,000 worth of parts at their own parts businesses, but technicians now only have a core stock of £7,000 worth.

Brown says: “It was quite difficult to convince our dealers that taking away their parts was going to be beneficial for them.”

Hayden says: “We just explained that by taking away the parts it would free up a lot of space. In some cases, parts are left as an afterthought at 2pm after a general manager has come out a meeting and it might not get as much attention as it should do. By doing this we’re allowing the people in the dealership to focus on what they do best, which is sell cars.”

According to Hayden, feedback has been positive so far, with dealers noticing more consistency with deliveries and getting the parts right first time.

Hayden says: “When I used to visit dealers there would be complaints about deliveries, but that’s reduced now. There will still be vexed communication from time to time, but we’re getting it right.”

Hayden and Brown’s first goal is for @First to be recognised as the number one UK parts distributor specialising in Ford and Mazda by July 2009.

Twice-a-day deliveries slash waiting times

Ford’s 3D (during-the-day delivery) initiative uses 12 regional depots (four of which are run by Ford Retail’s @First parts business) to deliver parts on at least two occasions during each day.

Chris Hayden, Ford Retail chief executive, says: “We set two deliveries as a minimum – some of our vans make four trips to a dealer in one day.”

The 3D hubs typically stock more than 20,000 parts lines and were created to reduce the time vehicles are stuck at dealerships waiting for parts.

The service makes Ford the first volume manufacturer to offer same-day parts availability to all of its dealers nationwide.

Dealers can also benefit from an overnight delivery ready for 8am from Ford’s central parts warehouse in Daventry.

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