Distributors, retailers and suppliers are always looking for ways to improve their supply chains, but often have to make these improvements in a vacuum—How can you improve your logistics or warehouse operations if you don't know how well you're performing now, or how other companies in the market are performing?

The Automotive Aftermarket Industry Association has teamed up with the Supply Chain Council (SCC) to help companies in the aftermarket measure their supply chain performance and compare their operations with similar businesses. Under the recent agreement, AAIA members will be able to access SCC training and publications related to the group's Supply Chain Operations Reference (SCOR) model at SCC member prices, and have free access to the SCORmark benchmarking survey.

"We often describe the vehicle aftermarket as an incredibly effective supply chain… and at the same time terribly inefficient,” says Scott Luckett, AAIA vice president, technology standards and solutions. “We wanted to make best practices in supply chain management easily available and accessible to our members.”

The SCOR model is a process reference that was developed as a cross-industry standard diagnostic tool for supply chain management. The model allows companies to address, improve and communicate supply chain management practices using common definitions.

SCC executive director Joseph Francis describes SCOR as a toolkit that businesses can use to periodically measure themselves against market requirements.

"SCOR is a way of measuring business in a standard way," Francis says. "If you were checking the tires on a race car during a pit stop, you wouldn't measure them using PSI one day, millibars per square inch the next day, and the roundness of the tire of following day. SCOR provides a global, universal standard for business management."

"It very clearly communicates how to standardize measurements that are important in improving supply chain operations," Luckett says.

SCOR then helps companies map those measurements to business processes, so that companies can determine the source of any problems in the supply chain. The model also provides best practices that companies can follow in order to improve performance.

"If I know that my car is not running well, there are some practices I can follow to solve those issues," Francis says. "If my fuel consumption is too high and it turns out I jam my foot on the accelerator every time the light turns green, I can switch to a different method of driving to improve my performance. SCOR has hundreds of best practices, so you can look at how you are performing a specific process and judge whether you should make an adjustment."

Technology plays a role in some of these best practices, but not all. "Only 20 percent of processes can actually have technology applied to them," Francis says. "The vast majority of processes are manual, and that's because the processes involve human beings thinking about something."

The best candidates for a technology fix are repetitive processes, or those where human error can add expense to a process (such as manually entering order information).

For example, a repetitive manual process like writing down shipment data during receiving could be improved with a technology fix (bar code scanning). The inspection of material at receipt, however, would require a different type of improvement. "A best practice in that area would be to establish supplier agreements so that you can eliminate the process completely or just inspect sample boxes," Francis says. "At the time of consumption, you have an agreement with the suppler to remediate if there is an issue."

A key part of the agreement between AAIA and SCC will be the member access to the SCORmark benchmarking service and follow-up training.

"The partnership gives AAIA members an admission ticket to this whole process," Luckett says. SCOR training and benchmarking can help companies identify weak areas in their supply chains and develop new business processes to improve performance.

"Benchmarking is a very expensive process," Francis says. "But when you use standardize metrics, like we do with SCOR, the cost drops dramatically and you can share metrics across different companies' experiences."

AAIA members will be able to see a quick comparison of several demographic groups at no cost.

"If you are not periodically measuring your performance and benchmarking against your competitors, you are not really in the market to do a better job for your customers," Francis says. "Like Alice in Wonderland, you're running as hard as you can just to stay in place.

"And this isn't just for big companies," Francis adds. "Smaller companies can do this just as easily as larger ones, and in many instances do so more easily."

Only a handful of aftermarket suppliers are currently engaged with the SCC. "That helped confirm our suspicion that this was a great untapped opportunity for the industry," Luckett says.

Eventually, AAIA hopes to develop workshops and industry-specific training opportunities for the aftermarket in partnership with the SCC. The first of these was scheduled for the AAIA's Fall Leadership event in Boston in September. Initially, Luckett says AAIA hopes to get at least 100 companies to participate in the benchmarking in order to create some aftermarket-specific data.

In the meantime, companies can also benchmark themselves against companies of similar size, geographic region, business type (using U.S. Census classifications) or type of supply chain (build to order, build to stock, engineer to order, or retail).

"Our view is that by benchmarking and improving your business, a high tide will lift all boats in an industry," Francis says. "All businesses will be improved through cycle after cycle of benchmarking, so the real quality that customers are getting rises dramatically."

"We need to figure ways to be more efficient and to do more with less without sacrificing the promise we've made to the motoring public," Luckett says. "Right now we fulfill that promise by having every imaginable part everywhere it can ever be demanded. What we hope to get out of this collaboration is to find a way to work more efficiently and stretch the limited assets of all of our members."

For more information, visit www.supply-chain.org/aaia.