Automotive Parts Store Software: Solutions for Kirk Motors

Introduction

The business of Kirk Motors is well known, but while the owners understand that changes must be made to their business systems in order to improve profitability and keep pace with competitors, they are uncertain what steps to take. To a large extent, the steps required depend on the background and expertise of the managers. The organization has already appointed a consultant to advise them on software changes, and while that consultant is well versed in software generally, it is difficult to prepare bespoke software for a requirement of this type without seeking expert assistance — and that is the purpose of this report.

Any change is difficult, and for an organization, change means the development of — or change in — the personnel concerned. This takes time unless individuals are replaced, and replacing individuals means a shift in the ethics and possibly the competencies of those involved.

Kirk Motors appears to operate from a single store in the Cayman Islands. The organization already has a relatively large number of computers and printers, but these are being used only as simple price-display terminals with pre-recorded component prices rather than as full computing resources. It does not appear that much software is in use for sales purposes. At the same time, maintaining records of 23,500 different components is important, as it would otherwise be very difficult to know what stock the business holds. In that context, the $30,000 in unaccounted stock does not appear especially large and may have arisen from a lack of employee knowledge or from employee defalcation. The solution to that part of the problem is further employee education through seminars, circulars, or whatever method the organization has used previously. If items are genuinely missing, only law enforcement can investigate; no software system can address that directly.

Sales have also increased very sharply within a single month, and managers need to find the reasons for this increase. Auto parts are neither a new product category nor a new offering in the Cayman Islands, so a sudden surge warrants scrutiny. The most likely explanation is that some items are being sold below cost or below the prevailing market price, enabling buyers to resell at a profit — which may also account for the $30,000 discrepancy mentioned above. In any case, the company believes it needs to update its software, and this report proceeds on that assumption.

The Offerings from the Biggest Providers

This raises the question of which software is required. The deficiencies in any system arise from the design of that system. Understanding these deficiencies requires understanding how the present system operates — it is already clear that the current setup cannot meet certain requirements. The solution can be approached in two ways: purchasing existing software and adapting it to the organization's needs through a specialist, or commissioning custom development. In the first approach, the consultant's role would be to recommend particular software, and the specialist engaged would typically receive a commission from the supplier in addition to any consulting fee.

There must also be recognition that some existing staff may be either incompetent or engaged in supplementing their income improperly. These individuals are likely to cause problems with any new software after it is installed, and a software expert would need to be called in — an expensive and time-consuming process. This matter should be resolved before any new system is implemented.

IBM is well known as one of the largest computer manufacturers in the world, and it now offers software solutions for the automotive sector. According to IBM's own analysis of the automotive industry, organizations seeking to modernize their software should pursue several objectives. The first is to reduce costs while increasing productivity, since lower costs are a constant pressure from both customers and competitors. The second is to continuously seek opportunities to enter new markets, thereby attracting new customers. The third is to transform the customer experience: as the entire world becomes a 24-hour marketplace, software should enable organizations to reach customers faster and make it easier for customers to order — what to order, when, and in what form they require delivery. (Racing to compete: the automotive industry goes on demand)

The fourth objective is to transform supplier relationships. When an organization is operating on a demand basis with its customers, suppliers must also be able to operate on a demand basis with that organization. The fifth objective is to make the organization more flexible so that it can match or exceed competitors' capabilities. This may not be an immediate priority for Kirk Motors, but competitors will develop over time and provisions should be made now, while Kirk Motors is in a strong position. Demand will shift across the range of 23,500 products, and this may alter the way competitors market their offerings. Kirk Motors must continuously find ways to be innovative and cost-effective at both high and low demand levels. (Racing to compete: the automotive industry goes on demand)

This is a characteristic challenge for a mid-sized automotive parts organization, which is the category into which Kirk Motors falls. To remain competitive, such an organization must anticipate and react to customer needs, competitor moves, and market opportunities. It must streamline and integrate core business processes and systems to increase productivity, flexibility, and innovation, improve marketing, reduce lead times, and better control costs. It must differentiate itself from competitors through an emphasis on value and innovation, protect its market share, secure internal communications, simplify collaboration with suppliers and customers, and ensure business continuity even when unforeseen events occur.

A longstanding challenge in applying computing to these problems has been that organizations often end up purchasing either too little or too much computing power. IBM's Flexible Finance offering addresses this by helping organizations align their computing resources to actual requirements. Whether this specific offering would be required by Kirk Motors is uncertain — their financial position does not appear especially strong, given the concern over a $30,000 shortfall. Nevertheless, IBM's demand-based system allows organizations to increase or decrease software and hardware availability as needs change, with flexible pricing based on IBM's standard rules. This framework spans e-business hosting, application management, financing on demand, and leveraged procurement, though not all of these services would necessarily be applicable to Kirk Motors. (Racing to compete: the automotive industry goes on demand)

A Case Study: South Pacific Tires

To illustrate how IBM has helped organizations improve their wholesale and retail operations, it is useful to examine the case of South Pacific Tires — a relevant example given that Kirk Motors likely operates as both a retailer and a wholesaler from a single outlet. The aim of the software development for South Pacific was to provide dealers with more convenient ways to do business, generate demand for the South Pacific brand, and reduce operating costs. The recommended solution was a B2B and B2C e-commerce infrastructure integrated with the company's existing systems. The projected benefits included savings of AUD $1 million per year, a payback period of under one year, and a transfer of 50 percent of transactions to online channels within twelve months — without requiring the client to develop additional sites or discover entirely new revenue streams. (South Pacific Tyre drives success with integrated B2B and B2C platform)

The businesses are different in important respects: South Pacific sells only tires, whereas Kirk Motors carries a far broader range of products. The system developed for South Pacific therefore cannot be applied directly to Kirk Motors, but the underlying approach — a recoverable investment in online infrastructure with measurable cost savings — remains instructive. Kirk Motors' own movement toward modernization is inevitable if the business wishes to avoid being displaced in the competitive auto parts retail market. Customers may already expect to check product availability online or place orders before visiting the store, making some degree of computerization essential regardless of the specific platform chosen.

The major changes in the tire business had come from the establishment of automotive trading exchanges, which threatened to erode South Pacific's direct relationships with its dealers. As the company's Chief Information Officer explained: "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 Tyre drives success with integrated B2B and B2C platform) A comparable dynamic may exist for Kirk Motors.

The new system allowed customers to search for product availability online, locate a specific brand or size, place orders, and track delivery progress without calling the call center or visiting a store. This directly addresses a need at Kirk Motors, which states explicitly that its paper-based delivery trail is ineffective. South Pacific also used the platform to communicate proactively with customers about new product arrivals — a capability that could prove similarly valuable to Kirk Motors, given its reported 30 percent sales growth and the potential for further gains through more active marketing. (South Pacific Tyre drives success with integrated B2B and B2C platform)

IBM recognized that South Pacific would require comprehensive assistance in computerizing its operations. Rather than handling implementation directly, IBM connected South Pacific with one of its business partners, Mid-Comp International. Mid-Comp designed and implemented an e-commerce infrastructure and the associated business logic for a site called tirepro.com.au. IBM supplied the underlying software components, including WebSphere Commerce Professional Edition version 5.1, DB2 Universal Database, and WebSphere Application Server Advanced Edition. The existing retail system of South Pacific was integrated with the new customer-facing site, mytire.com.au.

Conclusion

It is difficult to declare any single solution definitively the best, but based on the analysis above, the Galaxy software system appears most suited to Kirk Motors' current situation. A detailed review of Kirk Motors' methods and practices would be needed to confirm whether Galaxy addresses all the operational problems identified. If it proves a good fit, it could be deployed directly with assistance from a Galaxy-affiliated partner organization during the initial implementation period.

If Galaxy does not prove to be an ideal solution, the recommended alternative would be to enter an agreement for custom software development with a reliable provider such as IBM, working through one of their established collaborators — following a model similar to the South Pacific Tires engagement described above. Because a number of judgmental factors are involved, it would be advisable for the client to review the options independently and decide what best suits their circumstances and budget. Additional supplier options can be found through targeted searches for auto parts software solutions. Any implementation will involve upfront costs, but it is anticipated that these would be recovered within a relatively short period given the operational efficiencies gained.