Succeeding together

Succeeding in automotive recycling involves understanding the status of many industry aspects, many of which were discussed in sessions and hallways at the Automotive Recyclers Association (ARA) 78^th Annual Convention & Expo in 2021, held in Dallas in November. Facility efficiency, understanding the future of artificial intelligence in insurance estimating, electric vehicle safety, end-of-life utilization of the electric battery, certification and standards, workforce shortages, technology and cyber-security were just some of the buzzwords mentioned over the course of several days of peer networking.

Many unknowns currently are working themselves out in real-time in the industry. As they unfold, an auto recycler’s best strategy is to stay ahead of the curve with business best practices, training, certification, information and collaboration until the dust settles on some of these issues.

The leaders of the ARA emphasized their commitment to continue providing ongoing avenues for auto recyclers to gain the knowledge they need. Their current efforts include joining with stakeholders in various aspects of the supply chain and process management to ensure ARA members, and the entire industry, are considered in all high-level decisions impacting recyclers.

ARA in the news

At the ARA annual membership meeting, the news was positive and progressive. The highlights include:

• ARA announced a new educational arm of the association, the Automotive Recyclers Training Institute (ARTI). This will be pivotal in the future creation and disbursement of critical educational data needed in handling new technologies in vehicle dismantling.
• The ARA Scholarship Foundation raised almost $20,000 at its annual fundraiser and is pleased to announce three newly named scholarships: Don & Rachel Egelseer Honorial Scholarship; Ron, Keith & Brian Sturgeon Honorial Scholarship; and Gary Bevell Honorial Scholarship.
• ARA created a new soon-to-be registered trademark for use in the industry ­– Reuse, then Recycle™ to call attention to reusing auto parts. To use this logo, contact staff@a-r-a.org.
• ARA is leading the way with involvement in electric vehicle battery discussions across the automotive industry, including being active in NAATBAT, an organization dedicated to advocating for advanced battery technology in North America.
• ARA launched “MyARA,” which is a social media platform specifically for ARA members and where ARA committees can conduct meetings in a Zoom-like setting. Members can check it out by going to https://ara.tradewing.com and entering their membership logins for the ARA website.
• The AutoRecyclers ToolBox announced that it is now selling regional advertising to automotive recyclers who want to connect with their peers in business. Contact toolboxads@a-r-a.org for more information.
  

Roundtable highlights

The Recyclers Roundtable, facilitated by Scott Robertson, Greg Condon (Condon’s Auto Parts, Westminster, Maryland) and Greg Daurio (Daurio’s Auto Truck, Pueblo, Colorado), opened by discussing lingering pandemic conditions. Many roundtable participants in the U.S. and across the world discussed implementing new processes and working with limited staff while enjoying sales that were “the best ever” for many. Condon noted he had spent several years prior to COVID cross-training his staff for multiple positions, proving the time spent was a great asset to his company during the height of pandemic conditions.

A discussion on hiring practices brought to light that with electronics invading the automotive design, it is prudent to start hiring “trained electronic automotive staff members to help us.” Complex automotive technology, increasing cyber security risks and the far-off but looming ban on internal combustion engines are writing on the wall to bring your business model into the technological age.

Other hiring strategies were discussed, such as developing an advanced onboarding process. Amber Kendrick (Pete’s Auto Recycling, Jenison, Michigan) shared her multiweek process where a new hire will get a list of tasks each week, which includes interview questions for peers to learn the full scope of automotive recycling and specifics of the company. She then meets with new hires weekly to discuss what they learned. She noted it has improved retention, as workers understand how they fit into the process and what to expect from the company as an employer.

Putting a return-on-investment price tag on certification also was discussed. Often overlooked as a priority, the feeling is that recyclers can be shortsighted when it comes to its value. “Certification ROI is hard to quantify when we implement this thing today, that sometimes comes to full value in year three or five,” said Condon. It was acknowledged that certification is an investment in the future, and the overall feeling is that auto recyclers who embrace it today will rise to the top quicker as vehicle dismantling becomes more complex and dangerous.

Electric vehicle certification is becoming is a hot topic within ARAUniversity.org. It was noted that electric vehicle management standards are going to take a dismantler some time to learn. There are risks, and awareness is a top priority for the ARA. “We must write our own protocols,” noted Shannon Nordstrom (Nordstrom’s Automotive Inc., Garretson, South Dakota), “or they will be written for us. Certification adds value to our business.” Following standards allows the industry to stay in control of its own processes, he emphasized, noting that ARA University offers a number of resources on electric vehicles, free to ARA members.

Estimating the future

Ryan Mandell, director, performance consulting, Mitchell International, San Diego, conducted an informative session on insurance estimating advancements. Data is the name of the game, with 58,000 items that can potentially show up on an estimate. Consistency with parts descriptions is more important now than ever before. Overcoming the bad habits of incorrectly listing parts is imperative, he urged. Decisions about repairs are now being made on-site of the accident. It is important to position your inventory to be considered for the repair. Mandell stressed, “Quality and accuracy of your inventory is more important than ever. Eventually, AI will have the parts on the way before a shop gets a car to repair.”

It was noted that more estimates are being generated by the carriers, instead of the demand response providers (DRPs). Despite the data-driven technology in the repair process, you still must have a human close the loop. It was recommended that auto recyclers spend time creating relationships with insurance representatives to be a preferred vendor in their network. Dan Snyder (Snyder’s Certified Auto and Truck Parts, Holland, Texas) noted, “We must understand their business,” he said, and they must “understand ours so that everyone can make and save money along the way.”

Self-service boom

Eric Wilbert (Wilbert’s Inc., Bath, New York) spoke to attendees on best practices in the self-service sector. More recyclers are diversifying into self-service or operating that model. Vehicle acquisition continues to be a problem for everyone, and he suggested advertising to get vehicles from the public. “Auctions are so expensive, so try to get cars in other ways,” he said. “When someone reaches out to sell their car, get the vehicle as soon as possible. Towing is not an extension of your business; it is the face of your business.”

Data rules

In her session, Using Your Data to Cultivate Leaders, Tiffany Whitmire (Fenix Parts, Hurst, Texas) noted, “Nothing ruins a good story like data—it shows what’s really happening in your business.” In other words, you may think things are one way, but through tracking, another story of your business may emerge. Defining what a good job looks like and then using data to measure the job provides a consistency in performance. Define what your key indicators are and what is unique to your business that affects the business. Hone it down to what drives your bottom line and that is unique to your success.

For instance, evaluate where your hand-off points are and measure the process. Is there room for improvement? Are there “leaks” in the process? Look at the quality versus quantity for each KPI, or key performance indicator. In dismantling, set your goals based on your desired outcomes. If quality is suffering, could it be the dismantling performance model you have in your facility?

Customer service reigns

In growing profits, Pat Huesers and Mike Meyer (PAM’s Auto, St. Cloud, Minnesota) discussed how their efforts on consistent customer service and business policy helped streamline bottlenecks in their business and made all parties aware of expectations prior to sale. PAM’s Auto has a written “no-hassle” return policy. “If you are reasonable with people, they will be reasonable with you,” they expressed. With a written policy, you will need to deviate from it for good customers. “Just be careful whatever you do, as the customer will expect it again.”

It is a given ­– you will have returns; but think of returns as a way to save the customer, and maybe even the sale or an opportunity to make a new sale. “If you are able to track returns by customer, the results may surprise you.”

On the warranty, you must expect that auto parts fail, they said. Your customers will never remember the 20 deals that went right; they remember the one deal that was painful. Have one warranty, make sure the staff has it memorized and outlines it at the point of sale. Upsell customers to a no-fault warranty and the resolution on both sides is much better.

Certification value

In 2022, you will be hearing more about the value of the ARA Certified Auto Recycler (CAR) program for your business. In two sessions, Shannon Nordstrom and Sue Schauls discussed the program in detail and its benefits. From best practices in dismantling to parts washing and waste disposal, the program is designed so that your team is utilizing best practices that keep them safe and your facility minimized from exposure to a potential danger.

“The best thing you can do is be certified,” emphasized Schauls. For instance, waste disposal in automotive recycling has become somewhat of a hot topic. There is an increased emphasis on this in inspections processes, especially in disposal of lead-acid batteries, mercury switches, refrigerants, tires and scrap metal. “In our CAR Compliance Checkpoint program, you can scan and upload your bill of lading on batteries, switches, etc. for safekeeping. The key is that you keep the paperwork when you send out shipments for disposal.”

Using a name-brand company in the disposal of waste is also recommended. If an independent person offers more per battery, but then accidently dumps 1,000 batteries on the road, you are involved, warned Nordstrom. “It’s not worth the liability in my opinion for the extra 50 cents a battery.”

Caryn Smith is with Driven By Design Custom Publishing.