At this stage one does not know which of all the solutions will be the best for solving the problems of the organization. (Racing to compete, the automotive industry goes on demand)
One of the solutions
Now let us look at one area where IBM has helped an organization to improve its dealing in the wholesale market, as probably Kirk Motors is both a retailer and a wholesaler with only one outlet. The concerned company was South Pacific Tires, and the aim of software development was to provide dealers with more convenient ways to reach South Pacific generate demands for the brands of South Pacific and reduce their operating costs. The suggested solution was a B2B and B2C e-business infrastructure which could integrate with their earlier systems. The benefits of the system was to be a saving of A$ I million in a year which could lead to a payback for the system within one year. It was also expected that 50% of the transactions will be transferred to online transactions within one year; the client would not need to develop additional sites and find out new methods to get additional revenue streams as also to find out new methods for getting ways to sell tires. (South Pacific Tire drives success with integrated B2B and B2C platform)
The business is thus different in the sense that South Pacific has only one product to sell - tires, whereas Kirk Motors has many more. The nature of business is also not identical, and therefore the system developed for South Pacific will not be directly applicable to Kirk Motors, but a new system will have to be developed. At the same time, the costs for development of the system seem to be recoverable within a limited time span of one year, and thus it seems clear that this is one way to solve the problem. At the same time, to solve the problem, the movement of Kirk Motors is also on the way to modernization and that is inevitable if they do not want another organization to take their place in the highly competitive auto parts retail market. It is also evident that customers may be expecting to get the facility of placing their orders on the Internet, or even finding out whether the products are available at Kirk Motors, before deciding to come and buy the products here. Even for that computerization is essential.
Kirk Motors does not sell tires, but the main business of the other company is in the area of tires, and it may be noted that the business of tires has not changed much. The major changes in the business has come from the setting up of automotive trading exchanges and many dealers in tires are worried about the effect of those exchanges on the entire tire business. It may be that a similar situation exists for Kirk Motors. According to Kirk Motors Chief Information Officer, "We were concerned that once the dealers invested in their connections with the trading exchanges, it would be more difficult for us to strengthen our direct relationship with them through our own e-business initiatives. We wanted to provide dealers with a range of convenient options for doing business with us while, at the same time, reducing our own operational costs." (South Pacific Tire drives success with integrated B2B and B2C platform) Thus it is clear that one of the reasons for the shift of South Pacific to online operations was due to the change in the market. The new system had changed the operations of South Pacific in a way that customers could directly search for product availability on the Internet, and not even have to come to an outlet of South Pacific. (South Pacific Tire drives success with integrated B2B and B2C platform)
They could also find out where the particular brand or size was available, place their orders and even find out how far their orders had progressed without any direct follow up. This is a requirement of Kirk Motors as the company states clearly that paper trail for deliveries are ineffective. The customers did not have to keep calling the call center to find out the status of their orders. The desire of South Pacific was however more than just helping customers chase orders, they wanted to be in direct touch with customers and tell them about new developments which had come in as they had felt that it may help them in business. A similar situation may exist with Kirk Motors as the organization has had a growth of 30% in sales. It is possible if more marketing efforts are made, the situation in terms of sales may improve even further.
The method at South Pacific
It was seen by IBM that South Pacific will require help in the process of computerization of all its functions. For this purpose, South Pacific was put in touch with one of IBM's business partners called Mid-Comp International. Thus the actual operations were done by Mid-comp directly using IBM software and other facilities and not by IBM directly. Mid-Comp designed and implemented an e-commerce infrastructure and business logic components for the site called tirepro.com.au which was the business site for South Pacific. From the side of IBM, they had supplied different software like WebSphere Commerce Professional Edition version 5.1 and the readymade components of DB2 Universal Database and WebSphere Application Server advanced edition. The existing retail system of South Pacific was integrated with the new site directed at customers called mytire.com.au.
This will not remain as the only site promoting interest in the tires sold by South Pacific as new sites will be added for the purpose which will increase interest of customers in the brands of South Pacific and thus provide ways for dealers to increase their sales. The entire site was developed in three months and it is expected by South Pacific that one -quarter of its orders will come from online sources within a period of one year. This increase in online orders will help them save costs in terms of call center and manual processing. These savings lead to the total savings of Australian $1 million as was shown in the beginning. While south Pacific sells only tires, but the total number of items sold are 2,000. The Website will be running on a Microsoft Windows NT server at an Internet Service Provider being used by south Pacific, and this will be used to present the catalogs on the site. For dealers registered with South Pacific, it will be possible to search the catalogs in terms of product types, makes of cars on which it is to be used and the model. Even at the time of placing the order the dealers can find out when the order is likely to be delivered, the existing orders on the item and make requests for immediate or deferred delivery. (South Pacific Tire drives success with integrated B2B and B2C platform)
Thus it is clear that the change makes services at dealers for the company much easier. This is not strictly applicable to the case of Kirk Motors, but when their business expands, this may be a facility that they will require. In any case, they require a facility to inform the customers and enable them to place their orders directly. In view of the fact that the organization has a large store of 8,000 square feet and 20 computers in the store, it is clear that the waiting period in the store for any product must be quite high. It is better if the entire situation for the customer is computerized, so that the customer will be happy with the service provided.
There are also some readymade software systems for use in processing of auto retail parts stores. One of them is called Galaxy, and it has the following built in features within the system
Parts Invoicing, Purchase Orders & Inventory Receiving; Parts Category Classification for Custom Reports & Parts Location; Supplier Information & Packaging Ratios; Retail & Cost Pricing, Total On Hand & On Order Quantities; Minimum & Maximum On Hand for Suggested Re-Ordering; Stocking Parameters for Non-Stock Items; Seasonal Parts Sales with Adjustments to Regular Stock Items; Quantity on Hand Breakdowns by Bin Location which is up to 4 Bin locations per item; Customized Pricing Structures for Retail, Wholesale, Above Cost and Special Pricing; Parts designations to identify parts as Clearance, Obsolete or Active Items; Supports Bar Code Scanning Technology for Inventory Receiving and Parts Point of Sale; Sale End Date Alert Notification; Display Year to Date Monthly Sales Summary for Each Part; Detailed Parts History Screen and Reports; View Parts Inventory in Datasheet View Format; Search Manufacturer Electronic Price Books; UPC Cross Referencing Option to Compare Parts across Suppliers; Track Employee Numbers for Sales Breakdown by Employee for Commission Purposes; Change Quantities, Core Amounts and Discount Amounts directly on screen; Add New Parts directly from Parts Invoicing Screen; Create Bar Codes…