Parts Locators

Scope | Economic Forces | Business Models | Market Size | Workflow & More

Preface

Parts locators are one of a few digital solutions for spare parts that fill both ‘selling’ and ‘supply chain’ roles.  Critically, they convert many isolated individual inventories into large virtual inventories – increasing same-day and next-day fill-rates while allowing investments in individual physical inventories to remain flat or decline – and potentially curbing scrap. 

At the dealer level, in locators, other dealers’ inventories and OEM PDC inventories matter most.  In some cases – OEM-authorized WD (Warehouse Distributor) inventories matter – for example, Motorcraft parts stocked by FADs.  In a few cases, ship-direct supplier inventories can be relevant.   As complex as this is, it is simpler than for industries with field service – which require tracking and accessing mobile inventories held in service vehicles or stored at customer sites (though this is not covered in this blog post nor common for automotive). 

Parts locators are inherently OEM-specific – dealers (with few exceptions) stock only parts distributed by the OEMs that franchise them.  (Example: a Ford dealer will look to other Ford dealers for parts – not to General Motors dealers, even if the GM dealer has ACDelco parts with Ford vehicle fitments). 

History. Parts locators for the North American automotive market emerged in the mid-1980s and were available only to dealers and only through a DMS (Dealer Management System).  The first parts locator was built by ADP Dealer Services – now CDK Global – leveraging existing vehicle-locator capabilities.  Initially, parts locators worked only if both the prospective buyer and seller were using the same DMS platform.  Around 1990, leaders of ADP’s parts locator team left to form PartsVoice (PV), the first commercially successful DMS-agnostic parts locator company. In a twist of fate, ADP, now CDK, acquired PV in 2007 from Cobalt (who had acquired PV in 1999).   A second DMS-agnostic parts locator, OneTouch (OT) emerged in the early 1990s shortly after PV and was acquired in the late 1990s by Reynolds and Reynolds (eventually OT was shuttered in the early 2000s with the collapse of ChoiceParts). 

In the early years, automotive parts locators were nearly essential tools as most OEMs were delivering stock orders to dealerships once per week – often dealers would find several needed parts were out-of-stock before the next scheduled delivery.  Dealers would then look to the parts inventories of other nearby dealers to meet their unexpected needs.  The criticality of dealer-to-dealer parts trade may have lessened over the years as OEM parts deliveries have increased to several times per week or daily and emergency deliveries are less expensive. 

 Prior to having an effective locator for an OEM’s parts in a given geographic region, dealers would call dealer after dealer asking if they had the needed part in stock until they found a dealer that did. 

 Initially, independent locator providers rolled out geographically by metro area.  Then some OEMs signed up for programs with the established parts locators and other OEMs built their own captive parts locators (often a component of larger parts IT programs). 

 Use. Parts locator main uses: (1) for parts buyers – identifying parts suppliers with targeted parts in stock (usually that can be delivered same-day or next-day without shipping/expediting fees); (2) for parts sellers – as advertising an channel particularly effective for dealers holding substantial parts inventories; (3) as an engine and/or data set enabling or augmenting other digital parts solutions.  The first use-case is fading in significance for retail buyers, as sellers can be successfully found via part-number searches on Google or Bing – or found and ordered via parts eCommerce solutions.  For dealers, the sequence that the parts locator presents matching suppliers is critical.  Factors in prioritizing “matches” include (1) preferred-supplier status; (2) proximity; (3) discounts for idle stock. 

Dealer-to-dealer parts locator platforms have expanded to include parts inventories of OEM PDCs (Parts Distribution Centers – that is, warehouses), authorized WDs (warehouse distributors) and special inventories (such as ‘vintage’ parts).  The same OEM PDC inventories and related information is usually also available from a DMS.  Parts locators often hold (even if not displayed) additional information on parts inventories including part-level aging, historic sales and stocking-status.  

It is widely held that 95% of parts locates that result in an order are between dealers that are relatively close to each other and which have traded with each other before.

Parts locator data and functionality may be re-purposed for backorder referral solutions and for trading idle/overstock parts at discount.  These digital solutions will be covered in separate posts – and are only mentioned briefly in this post. 

Value. Parts locators may have the third-largest market for any service-parts solution.  Prices are often in the form of a monthly fee per location per OEM and may vary with the size of the parts inventory that a dealer is posting on the locator. In addition, the importance of parts locators is boosted by the capabilities they enable for other parts solutions