Sourcing – Foundation for Much in Fixed Operations
The great consolidation continues in automotive as end users are moving up channel, collapsing the multiple layers of distribution automotive has enjoyed for years. While the relationship is still paramount, one-stop shopping from a single automotive source is always preferred. Paint, oil, service drive, and F&I are typically controlled by contracts with few changes or conversions year to year.
KCAMG has helped clients with the simple act of shopping for less expensive OEM parts for body shop franchised retailers as well as more complicated sourcing where we are part of an existing team called on for specific lines where they lack experience. One sourcing exercise in 2021 consisted of service drive, tire equipment, body shop booths/equipment, OEM scanning tools, and a last-minute bulk oil request when supply evaporated in the marketplace.
Combining Spend/Multiple Regions
KCAMG also helped regional distributors, selling common items, combine the total spend to bid out top 10 ancillary and other fast-moving products. We work on the products 3-4 at a time, providing samples, obtaining yearly purchase numbers, and then negotiating a contract on behalf of the group.
Many mergers and acquisitions, over the past few years, have translated to big savings as technology solutions including digital marketing, DMS, and lead management companies find themselves competing with startups that take over the market quickly. Huge discounts, no contracts, and easy interface are changing the landscape and vendor count. It’s like a high-stakes game of musical chairs and you don’t want to be the last company standing without a partner.