2013 aasa pulse: supplier kpi benchmarks aasa pulse: supplier kpi benchmarks 2013 1
TRANSCRIPT
2013 AASA Pulse: Supplier KPI Benchmarks
AASA Pulse:Supplier KPI Benchmarks
2013
1
2013 AASA Pulse: Supplier KPI Benchmarks 2
Contents
Page
Executive Summary 3
How to Use this Study 8
Returns 11
Fill Rates 18
Financial 34
Operations 44
Marketing and Forecasting 51
Results Segmented by Company Size 61
Results Segmented by Product Category 71
Appendix A: Profile of Respondents and Full Responses to Selected Question
81
Appendix B: Methodology 87
2013 AASA Pulse: Supplier KPI Benchmarks 3
Executive Summary
2013 AASA Pulse: Supplier KPI Benchmarks 4
Executive Summary (1/4)
Metric Key Findings Page
Returns
85% of respondents indicate that 2.5% or less of warranty returns are related to actual quality issues
14
Stock adjustment rose again to worrisome levels, raising concern about this practice across the industry
15
Fill Rates
Differentiation through high fill rates is becoming more difficult as 74% of respondents had 94% or better fill rate by unit volume
19
75% had order turnaround of three days or less 25
Although on average only a small amount of business is done through vendor direct programs, this activity has been increasing steadily for the past 3 years; in addition, 26% of respondents had 10% or more of their sales through vendor direction
26-27
2013 AASA Pulse: Supplier KPI Benchmarks 5
Executive Summary (2/4)
Metric Key Findings Page
Financial Price changes decreased, though gross margin mean and median were able to hold steady
35, 41
e-TailingRespondents estimate that on average 3.4% of their sales ultimately are sold by channel partners through e-tailing
31
Payment Terms
Payment terms with retailers averaged 177 days for respondents in 2012, with 24% at average terms of 291 – 360 days
36
Payment terms with WDs/Distributors average was much less than retailers, averaging 86 days with 2/3 of respondents reporting terms between 46 to 90 days
37
2013 AASA Pulse: Supplier KPI Benchmarks 6
Executive Summary (3/4) Metric Key Findings Page
Operations
The percent of sales manufactured in-house increased slightly to an average of 63.6% in 2012, though there are widely divergent models on this point
45
Manufacturing in low cost countries averaged 36% for 2012, up 10 percentage points from 2011
47
Average days on hand of inventory reported by respondents was 63 days
48
Marketing
Overall marketing spend as a percent of revenue averaged 3% for 2012
52
Customer specific marketing spend on average was typically the highest area of marketing spend
53
Forecasting
90% of respondents reported access to POS and forecasting data from channel partners; however only 34% use it “Always” or “Frequently”
57
For most of respondents POS data is very useful; however, a subset finds limited value in the data
59-60
2013 AASA Pulse: Supplier KPI Benchmarks 7
Executive Summary (4/4) Metric Key Findings Page
Results Segmented
by Company
Size
For larger firms there is a more significant portion of their business done via vendor direct
65
Smaller sized firms have played the largest part in the e-tailing space
66
Larger firms experienced the greatest price increase from 2011
67
Results Segmented by Product Category
Chemicals had the highest fill rates. The other product segments were slightly below Chemicals, but still all roughly achieved the target 95% fill rate.
74
Respondents estimate that e-tailing penetration is the highest in the under car product segment. Companies active in under car also participate the most in the vendor direct programs.
76
Chemicals sell the most directly through e-tailing 76
Engine and General maintenance have the longest payment terms
78
2013 AASA Pulse: Supplier KPI Benchmarks 8
How to Use this Study
2013 AASA Pulse: Supplier KPI Benchmarks 9
How to Use this StudyResults can be an invaluable resource in your business planning
What is the AASA Pulse?
• A benchmarking survey conducted on an annual basis
• Available exclusively to AASA members• Covers such key benchmarks as returns,
payment terms, order metrics and key financial metrics
• Developed with the assistance and input of the AASA Marketing Executives Council (MEC)
• Analysis specifically targeted at aftermarket manufacturers. It is the only research of its kind available
• The AASA Pulse is absolutely anonymous and answers are kept strictly confidential
• Detailed results are shared only with survey participants
What to use the data for:
• Use the AASA Pulse as a vital tool to assist you in your business and strategic planning
– Allows you to benchmark against industry standards and best practices
• The data can help you determine what you should target for improvement
• And help identify where you are a benchmark
– And therefore allow you to focus your improvement on other areas and metrics
• Industry benchmarks to help in discussions with your Board and investors
2013 AASA Pulse: Supplier KPI Benchmarks 10
Understanding Box PlotsBox plots are used throughout the report; please use the following chart to reach a better
understanding of how to read and interpret a box plot
Range of responses
Average or mean of responses
The line between the blue boxes is the median or the midpoint of all the responses. 0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Lower Quartile Upper Quartile MeanSource: 2013 AASA Pulse: KPI Benchmarks Survey
25%50%
75%
100% of responses
4th Quartile
3rd Quartile or Upper Quartile
2nd Quartile or Lower Quartile
1st Quartile
2013 AASA Pulse: Supplier KPI Benchmarks 11
Returns
2013 AASA Pulse: Supplier KPI Benchmarks 12
Warranty Returns (1/2)While warranty made up 1% or less of sales for 47% of respondents , 38% had 1-5% of
sales as warranty and 15% had greater than 5%
47%
38%
15%
2013 AASA Pulse: Supplier KPI Benchmarks 13
Warranty Returns (2/2)While warranty returns averaged 2.6% of sales, the range of responses was very large
Based on this feedback, the
aftermarket has roughly $3.5
billion dollars of parts warranty returns a year.
Note: at retail sales level
Source: AASA/AAIA Joint Channel Forecast Model
2013 AASA Pulse: Supplier KPI Benchmarks 14
Warranty Returns and Quality Issues85% of respondents indicate that 2.5% or less of returns are related to actual quality
issues
If the industry could reduce warranty returns by half, the
industry could save ~$1.8 billion which would go straight to the bottom line of suppliers and
channel partners. If the industry could reduce returns just to
quality issues the industry would have $3.4 billion in addition profit.
Source: AASA/AAIA Joint Channel Forecast Model
2013 AASA Pulse: Supplier KPI Benchmarks 15
Stock and Obsolescence Returns (1/2)Stock and obsolescence returns clustered around 2-3%, with a wide range of results
2013 AASA Pulse: Supplier KPI Benchmarks 16
Stock and Obsolescence Returns (2/2)Stock adjustment rose in 2012, raising concern about this practice across the industry
In an era of “big data”, advanced analytics and supply chain
integration, should the industry be
experiencing this level of annual stock and
obsolescence returns?
Note: ~1 out of 10 respondents had >5% returns in this category
2013 AASA Pulse: Supplier KPI Benchmarks 17
Discrepancy ReturnsAverage discrepancy return continues to decrease, with 56% experiencing 0.05% or less
discrepancy returns
YearAverage
Discrepancy Return
2009 0.53%
2010 0.31%
2011 0.29%
2012 0.24%
2013 AASA Pulse: Supplier KPI Benchmarks 18
Fill Rates
2013 AASA Pulse: Supplier KPI Benchmarks 19
Fill Rates by Unit Volume (1/2)Differentiation through high fill rates is becoming more difficult as 74% of respondents
had 94% or better fill rate by unit volume
2013 AASA Pulse: Supplier KPI Benchmarks 20
Fill Rates by Unit Volume (2/2)Fill rate by unit volume continues to increase with both the mean and median of
respondents falling above the desired target of 95%
2013 AASA Pulse: Supplier KPI Benchmarks 21
Fill Rate by Dollar Value (1/2)Fill rate by dollar value averaged 95.4% for respondents with 25% falling between 96.1%
- 98%
Mean = 95.4%
2013 AASA Pulse: Supplier KPI Benchmarks 22
Fill Rate by Dollar Value (2/2)Average fill rate by dollar value continue to increase from the low seen in 2010; the 95%
fill rate goal in the industry is increasingly becoming standard
2013 AASA Pulse: Supplier KPI Benchmarks 23
Fill Rate by Line Item (1/2)Fill rate by line item averaged 94.9%, slightly below the typical 95% goal in the
automotive aftermarket
Mean = 94.9%
2013 AASA Pulse: Supplier KPI Benchmarks 24
Fill Rate by Line Item (2/2)Fill rate by line item also increased in 2012 capping a three year upward trend
2013 AASA Pulse: Supplier KPI Benchmarks 25
Order TurnaroundAverage order turnaround for respondents averaged slightly above 3 days, though 75%
had order turnaround of three days or less
Year
Average Order
Turnaround (in days)
2009 5.7
2010 2.0
2011 2.8
2012 3.2
75%
2013 AASA Pulse: Supplier KPI Benchmarks 26
Vendor Direct (1/2)Business models diverge: while 26% sell more than 10% through vendor direct, 39%
report business through vendor direct programs is less than 1%
26%
39%
2013 AASA Pulse: Supplier KPI Benchmarks 27
Vendor Direct (2/2)Although on average only a small amount of business is done through vendor direct
programs, this involvement has been increasing steadily for the past 3 years
2013 AASA Pulse: Supplier KPI Benchmarks 28
Overnight Shipping (1/2)The majority of respondents (59%) indicate that less than 1% of their business was done
with overnight shipping, though the range of responses is wide
2013 AASA Pulse: Supplier KPI Benchmarks 29
Overnight Shipping (2/2)Surprisingly, median use of direct shipping has been declining though the average remains
fairly high (2.5% of business) due to outliers who utilize a lot of overnight shipping
2013 AASA Pulse: Supplier KPI Benchmarks 30
e-Tailing Through Direct SaleMajority of respondents (76%) sell virtually nothing directly in the e-tailing channel, but
that means 26% are selling direct online 1% or more of sales
10% sell 3% or more through direct e-tailing, indicating that the direct e-
commerce sales model is being explored by some suppliers
2013 AASA Pulse: Supplier KPI Benchmarks 31
e-Tailing by Channel PartnersRespondents estimate that on average 3.4% of their sales ultimately are sold through
e-tailing
Mean = 3.4%
2013 AASA Pulse: Supplier KPI Benchmarks 32
Drop Shipments and Cross Docking (1/2)Business requiring drop shipments/cross docking averaged 8.5% for 2012
Mean = 8.5%
2013 AASA Pulse: Supplier KPI Benchmarks 33
Drop Shipments and Cross Docking (2/2)In contrast to the previous three year decline, there was a significant spike in business
done by drop shipments or cross docking in 2012
While median remains lower than 2009-2010, average
has increased as drop ship/cross
docking increased significantly among
a subset of suppliers
2013 AASA Pulse: Supplier KPI Benchmarks 34
Financial
2013 AASA Pulse: Supplier KPI Benchmarks 35
PriceAftermarket price changes declined in 2012 versus 2011, averaging +1.8%; 56% of
respondents increased prices while 18% saw declines
YearAverage
Aftermarket Price Change
2011 +2.4%
2012 +1.8%
56%
18%
2013 AASA Pulse: Supplier KPI Benchmarks 36
Terms with RetailersPayment terms with retailers averaged 177 days for respondents in 2012; 24% had
average terms of 291 – 360 days
Mean = 177
2013 AASA Pulse: Supplier KPI Benchmarks 37
Terms with WDs/DistributorsPayment terms with WDs/Distributors were much less than retailers, averaging 86 days
with 2/3 of respondents reporting terms between 46 to 90 days
Mean = 86
2013 AASA Pulse: Supplier KPI Benchmarks 38
SG&A expenses in 2012General selling and sales administration (SG&A) expenses as a percent of aftermarket
sales averaged 12% across respondents
Mean = 12.0%
2013 AASA Pulse: Supplier KPI Benchmarks 39
SG&A expenses over timeAverage SG&A has crept up over the last 3 years, though the approximate quartile range
of 6% to 15% has remained steady
2013 AASA Pulse: Supplier KPI Benchmarks 40
Gross Margin in 2012Weighted average gross margin across all respondents was 32.6%; the range was large
with 26% at 25% or lower GM and 29% above 40% GM
Mean = 32.6%
29%
26%
2013 AASA Pulse: Supplier KPI Benchmarks 41
Gross Margin over timeWeighted gross margin quartile range expanded and increased in 2012; mean increased
slightly (31.7% to 32.6%) although the median remained on par with 2011
2013 AASA Pulse: Supplier KPI Benchmarks 42
Aftermarket Research and Development Spending in 2012Respondent’s companies’ estimated average spend on R&D was 3% for 2012, although
over a fifth spend less than 1%
Mean = 3%
2013 AASA Pulse: Supplier KPI Benchmarks 43
Aftermarket Research and Development Spending over TimeR&D spend continues to increase for aftermarket suppliers
2013 AASA Pulse: Supplier KPI Benchmarks 44
Operations
2013 AASA Pulse: Supplier KPI Benchmarks 45
In-House ManufacturingThe percent of sales manufactured in-house increased to an average of 63.6% in 2012;
nearly half of respondents manufacture more than 80% of their goods in-house
YearAverage
Percent of In-House Sales
2011 55.1%
2012 63.6%
2013 AASA Pulse: Supplier KPI Benchmarks 46
Manufacturing in the U.S.On average, respondents reported that 47% of aftermarket sales were manufactured in
the US, about the same level as the previous year
Year
Average Percent of Sales
Manufactured in US
2011 48%
2012 47%
Will the reshoring US “manufacturing renaissance” be seen in the future in the aftermarket?
2013 AASA Pulse: Supplier KPI Benchmarks 47
Manufacturing in Low Cost CountriesManufacturing in low cost countries averaged 36% for 2012, up 10 percentage
points from 2011
Year
Average Percent of Sales
Manufactured in Low Cost Countries
2011 26%
2012 36%
2013 AASA Pulse: Supplier KPI Benchmarks 48
Inventory Days on HandAverage days on hand of inventory reported by respondents was 63 days, with nearly a
third reporting “Greater than 90 days”
Mean = 63 days
2013 AASA Pulse: Supplier KPI Benchmarks 49
Outbound Freight Costs3.1 – 5% was the most common range for freight costs as a percent of SG&A
2013 AASA Pulse: Supplier KPI Benchmarks 50
Inventory CostInventory costs averaged 19% of cost of goods sold; inventory was 20% or more of
COGS for 35% of respondents
Mean = 19%
35%
2013 AASA Pulse: Supplier KPI Benchmarks 51
Marketing and Forecasting
2013 AASA Pulse: Supplier KPI Benchmarks 52
Marketing SpendOverall marketing spend as a percent of revenue averaged 3% for 2012, though 62%
spent 3% or less
Mean = 3%
62%
2013 AASA Pulse: Supplier KPI Benchmarks 53
Marketing Spend – Customer SpecificCustomer specific marketing spend on average was the highest area of marketing
spend, with nearly 30% of the overall marketing budget
Mean = 30%
2013 AASA Pulse: Supplier KPI Benchmarks 54
Marketing Spend – AdvertisingOver half of respondents reported marketing spend for advertising comprised less than
20% of their overall marketing budget; mean ad spending was 21%
Mean = 21%
57%
2013 AASA Pulse: Supplier KPI Benchmarks 55
Marketing Spend – Trade FairsMarketing spend for trade fairs averaged 21% of the overall budget for respondents
Mean = 21%
2013 AASA Pulse: Supplier KPI Benchmarks 56
Marketing Spend – OtherWhile the previous three categories comprise most marketing spend, 32% of
respondents spend 20% or greater of their marketing budget on other promotional tools
Mean = 19%
Note: Means of the four categories do not add up to 100 percent as not all respondents added up to 100 percent.
32%
2013 AASA Pulse: Supplier KPI Benchmarks 57
POS and Forecasting Data90% of respondents reported access to POS and forecasting data from channel
partners; however only 34% use it “Always” or “Frequently”
Are suppliers fully leveraging the
data available to them?
2013 AASA Pulse: Supplier KPI Benchmarks 58
Value of POS data (1/3)Nearly two thirds of respondents report that the POS data is “Useful” or “Very useful” in
improving their inventory levels and line fill
2013 AASA Pulse: Supplier KPI Benchmarks 59
Use of POS data (2/3)For most respondents, POS data is very useful; data is used as a benchmark for
performance and forecasts guide suppliers in projecting growth
“Guiding light in terms of true product performance in store… We leverage this in combination of our outbound shipments to truly
understand demand so we can be responsive to customer needs as well as proactive if we see issues with our key accounts
who provide this.”
“Helps determine potential demand activity for upcoming periods. Provides a picture of the "health" of the market when
consolidated with other customers' performance. Allows collaboration with customers on determining market strategies
in given markets.”“To understand trends and to understand forecasting. To help
plan for advertising budget.”
Throughout your organization, how are you using POS/forecasting data provided by customers?
For full results, see Appendix
“Inventory modeling - we just started it, but it is very valuable.”
2013 AASA Pulse: Supplier KPI Benchmarks 60
Use of POS data (3/3)However, a subset of respondents finds limited value in POS data
“Do not use.”
“Limited use”
“Rarely used”
Throughout your organization, how are you using POS/forecasting data provided by customers?
For full results, see Appendix
“The forecast error is approximately 50% and this applies to our customers as well. (Therefore ½ of what was made does not sell through
for that period, simultaneously ½ of the actual demand is made in an expedite mode or via the good fortune of having raw based on the
“minimum buy quantities” required by the supply-chain.”
“Unfortunately, we do not have a lot of additional information provided to us at this time.”
“We cannot as it is terribly inaccurate.”
2013 AASA Pulse: Supplier KPI Benchmarks 61
Results Segmented by Company Size
2013 AASA Pulse: Supplier KPI Benchmarks 62
Methodology and How to Use
Methodology
• To obtain further insight into the data, we segmented results for select questions by the aftermarket revenue size of the respondent.
• We grouped respondents into three size segments:
• Note: Respondents who did not answer this question were not included in the company size segmentation
Annual US Aftermarket Revenue
Number of Respondents
<=$150 million 25
$151-$500 million 20
>$500 million 11
How to Use
1. This analysis can provide insight on advantages/disadvantages of size for different metrics.
– In other words, are smaller or larger companies more efficient or effective on a given metric?
2. This analysis can also be used to benchmark your company against your closer peers in terms of relative size.
– The issues and performance of smaller and larger companies can vary considerably; this analysis helps you understand better how your performance benchmarks against enterprises that are similar to you in scale.
2013 AASA Pulse: Supplier KPI Benchmarks 63
Returns by Company SizeRespondent Revenue Size
Metric <=$150 M $151-500M >$500M
Warranty Returns
Lower Quartile 0% 0.5% 0.5%
Median 0.5% 1.8% 1.1%
Upper Quartile 3.5% 4.5% 3.1%
Mean (Avg.) 1.9% 3.4% 2.5%
Quality Issues as a percent of Warranty Returns
Lower Quartile 1.3% 1.3% 1.3%
Median 1.3% 1.3% 1.3%
Upper Quartile 1.3% 1.3% 1.3%
Mean (Avg.) 2.6% 3.1% 1.3%
Stock Adjustment and Obsolescence Returns
Lower Quartile 0.4% 1.5% 1.5%
Median 1.5% 2.5% 1.5%
Upper Quartile 4.5% 3.5% 2.5%
Mean (Avg.) 2.4% 2.5% 2.4%
Mid-size firms had the largest
warranty returns
Majority of respondents,
despite the size of the company,
indicated a small amount of actual
quality issues contributing to
warranty returns
Stock adjustments were relatively the
same across company size
2013 AASA Pulse: Supplier KPI Benchmarks 64
Fill Rates by Company SizeRespondent Revenue Size
Metric <=$150 M $151-500M >$500M
Fill rate as a % of unit volume
Lower Quartile 95% 95% 95%
Median 95% 95% 95%
Upper Quartile 97% 97% 97%
Mean (Avg.) 95.4% 95.4% 95.3%
Fill rate as a % of dollar value
Lower Quartile 95% 93% 91%
Median 97% 96% 95%
Upper Quartile 98.5% 97% 98.5%
Mean (Avg.) 96% 95.4% 94.7%
Fill rate as a % of line items filled
Lower Quartile 94% 93% 93%
Median 95% 95% 93%
Upper Quartile 98.5% 97.4% 95%
Mean (Avg.) 95.6% 94.6% 93.8%
Fill rate as a % of unit volume was
consistent across firm size
Fill rate as a % of dollar value was
highest for smaller firms
Fill rate as a % of line items filled was lowest with
larger firms
2013 AASA Pulse: Supplier KPI Benchmarks 65
Shipping Metrics by Company SizeRespondent Revenue Size
Metric <=$150 M $151-500M >$500M
Order turnaround (days)
Lower Quartile 1.8 1.8 2
Median 2 2 2
Upper Quartile 4 4 3
Mean (Avg.) 2.7 2.7 2.5
Vendor direct (% of business)
Lower Quartile 0.1% 1.5% 0.1%
Median 1.5% 4% 8.8%
Upper Quartile 3% 11.3% 13.8%
Mean (Avg.) 8.1% 8.2% 10.3%
Overnight shipping (% of business)
Lower Quartile 0.2% 0.2% 0.7%
Median 0.2% 1% 1%
Upper Quartile 1.7% 1.8% 1.3%
Mean (Avg.) 2.1% 3.6% 1%
Order turnaround for larger firms is
slightly lower
For larger firms there is a more
significant portion of their business done
via vendor direct
Medium sized firms have the most overnight shipping as a
percent of their business
2013 AASA Pulse: Supplier KPI Benchmarks 66
e-Tailing by Company SizeRespondent Revenue Size
Metric <=$150 M $151-500M >$500M
e-Tailing through Direct Sales
Lower Quartile 0.2% 0.2% 0.2%
Median 0.2% 0.2% 0.5%
Upper Quartile 0.2% 0.2% 0.8%
Mean (Avg.) 2.8% 0.2% 0.7%
e-Tailing through Channel Partners
Lower Quartile 1.2% 1.1% 1.6%
Median 1.2% 2.2% 2.2%
Upper Quartile 5.3% 4% 3.5%
Mean (Avg.) 3.5% 3.8% 2.6%
Smaller sized firms have sold
the most directly in the e-tailing
space
2013 AASA Pulse: Supplier KPI Benchmarks 67
Financial Metrics by Company Size (1/2)Respondent Revenue Size
Metric <=$150 M $151-500M >$500M
Gross Margin (Weight Average, Aftermarket)
Lower Quartile 31.5% 24% 24.3%
Median 34% 33% 27.5%
Upper Quartile 32.5% 37.5% 37.4%
Mean (Avg.) 34.4% 32.2% 29.8%
Price Change Year-over-Year
Lower Quartile No change -0.4% +0.5%
Median +0.5% +0.5% +1.5%
Upper Quartile +2.3% +1.9% +1.5%
Mean (Avg.) +0.9% +0.4% +1.1%
R&D (Aftermarket, % Sales)
Lower Quartile 1.8% 0.1% 1.3%
Median 2.5% 2.3% 1.8%
Upper Quartile 4.5% 2.8% 2.3%
Mean (Avg.) 4% 2.3% 1.7%
Smaller firms had the highest gross
margins
Larger firms experienced the greatest price increase from
2011
Smaller firms spend the most on R&D as percent of
sales
2013 AASA Pulse: Supplier KPI Benchmarks 68
Financial Metrics by Company Size (2/2)Respondent Revenue Size
Metric <=$150 M $151-500M >$500M
SG&A (percent of aftermarket sales)
Lower Quartile 4.5% 7% 8%
Median 5.5% 11% 10%
Upper Quartile 11.5% 15% 18%
Mean (Avg.) 9.8% 12.1% 12.7%
Payment Terms to Retailers (in days)
Lower Quartile 68 158 68
Median 113 258 258
Upper Quartile 158 326 258
Mean (Avg.) 133.7 231.3 183.6
Inventory Turns
Lower Quartile 3.5 3.7 3.5
Median 9.5 5.5 4
Upper Quartile 11 11 5.5
Mean (Avg.) 7.7 6.9 5.5
Smaller firms had the lowest SG&A
Smaller firms had the smallest
payment terms to retailers with large and medium firms having a median response of 258
days
Smaller firms had the largest amount of inventory turns
2013 AASA Pulse: Supplier KPI Benchmarks 69
Manufacturing Strategies by Company SizeRespondent Revenue Size
Metric <=$150 M $151-500M >$500M
% of Sales Manufactured In-House
Lower Quartile 22.5% 55% 55%
Median 65% 75% 85%
Upper Quartile 95% 90% 85%
Mean (Avg.) 57.6% 68.6% 66.7%
% of Sales Manufactured in US
Lower Quartile 13.1% 15% 35%
Median 40% 45% 55%
Upper Quartile 95% 65% 85%
Mean (Avg.) 47.4% 43.2% 57.5%
% of Sales Manufactured in Low Cost Countries
Lower Quartile 2.5% 11.3% 15%
Median 25% 35% 25%
Upper Quartile 55% 55% 55%
Mean (Avg.) 34.6% 35% 34.4%
Larger and medium sized
firms manufacture nearly 2/3 of sales
in-house on average
Larger firms manufacture in the
US more than small and medium
firms
Medium firms manufacture in
low cost countries slightly more than
others
2013 AASA Pulse: Supplier KPI Benchmarks 70
Marketing Spend by Company SizeRespondent Revenue Size
Metric <=$150 M $151-500M >$500M
Marketing Spend – Advertising (% of overall marketing spend)
Lower Quartile 5% 15% 5%
Median 15% 25% 25%
Upper Quartile 30% 35% 25%
Mean (Avg.) 18.5% 26.9% 21.7%
Marketing Spend – Trade Fairs (% of overall marketing spend)
Lower Quartile 12.5% 5% 5%
Median 20% 15% 5%
Upper Quartile 27.5% 30% 25%
Mean (Avg.) 24.2% 19% 18.3%
Marketing Spend – Customer Specific (% of overall marketing spend)
Lower Quartile 10% 20% 15%
Median 25% 25% 25%
Upper Quartile 45% 35% 40%
Mean (Avg.) 28.5% 30.3% 28.8%
Medium firms spend the most on
advertising as a marketing tool
Smaller firms tend to spend the most of their marketing budget on trade
fairs
Customer specific spending is the
same regardless of firm size
2013 AASA Pulse: Supplier KPI Benchmarks 71
Results Segmented by Product Category
2013 AASA Pulse: Supplier KPI Benchmarks 72
Methodology
• To obtain further insight into the data, we segmented results for select questions by company product category.
• Respondents provided the key product categories they were active in:
• Respondents were able to choose multiple product categories. Their responses were included in each applicable category. Therefore the number of responses in the sum of the categories noted above will exceed the total number of survey responses.
Methodology and How to Use
Annual US Aftermarket Revenue
Number of Respondents
Engine 29
Under Car 21
General Maintenance Parts 20
Chemicals / Paint / Lubricant 8
How to Use
1. This analysis can provide insight on strength / weakness of different product categories.
– In other words, are different product segments more efficient or effective on a given metric?
2. This analysis can also be used to benchmark your company against your closer peers in terms of product segment.
– The issues and performance of companies in different product segments can vary considerably; this analysis helps you understand better how your performance benchmarks against enterprises that are roughly similar to you in product category.
2013 AASA Pulse: Supplier KPI Benchmarks 73
Returns by Product SegmentRespondent by Product Segment
Metric Engine Under Car General Maintenance Parts
Chemicals / Paint / Lubricant
Warranty Returns
Lower Quartile 0.5% 0.5% 0.5% -
Median 2.5% 1.8% 1.8% 0%
Upper Quartile 3.5% 3.8% 2.5% -
Mean (Avg.) 2.7% 2.6% 2.9% 1%
Quality Issues as Percent of Warranty Returns
Lower Quartile 1.3% 1.3% 1.3% -
Median 1.3% 1.3% 1.3% 1.3%
Upper Quartile 1.3% 3.8% 1.3% -
Mean (Avg.) 2.2% 4% 3.5% 1.8%
Stock Adjustment and Obsolescence Returns
Lower Quartile 1.8% 1.5% 1.5% -
Median 2.5% 2.5% 2.5% 0.1%
Upper Quartile 4.5% 3.5% 4% -
Mean (Avg.) 3.1% 2.7% 3% 1%
Chemicals had the lowest median of warranty returns;
engine the highest
Amount of quality issues was the
same regardless of product segment
Chemicals had the lowest amount of stock adjustments for 2012; returns were similar for other categories
Note: Chemicals product category does not include the lower or upper quartile to ensure confidentiality of those respondents.
2013 AASA Pulse: Supplier KPI Benchmarks 74
Fill Rates by Product Segment
Chemicals had the highest fill rate for unit volume, dollar
and line items filled. The other
product segments were slightly
below Chemicals, but still all roughly
achieved the target 95% fill
rate.
Respondent by Product Segment
Metric Engine Under Car General Maintenance Parts
Chemicals / Paint / Lubricant
Fill rate as a % of unit volume
Lower Quartile 93.5% 92.5% 93% -
Median 95% 95% 95% 97%
Upper Quartile 97% 97.3% 97% -
Mean (Avg.) 94.6% 94.7% 94.8% 96.5%
Fill rate as a % of dollar value
Lower Quartile 93% 91% 93% -
Median 95% 95% 95% 98.2%
Upper Quartile 97% 97.3% 97% -
Mean (Avg.) 94.7% 94.2% 94.4% 97.7%
Fill rate as a % of line items filled
Lower Quartile 93% 92.5% 93% -
Median 95% 94% 95% 98.3%
Upper Quartile 97% 95.5% 97.9% -
Mean (Avg.) 94.3% 93.8% 94.6% 95.9%
Note: Chemicals product category does not include the lower or upper quartile to ensure confidentiality of those respondents.
2013 AASA Pulse: Supplier KPI Benchmarks 75
Shipping Metrics by Product Segment
Order turnaround is lowest for engine and
general maintenance
parts; highest for Chemicals
Under car participates the most in vendor direct programs
All product segments have
very little business done via overnight
shipping
Respondent by Product Segment
Metric Engine Under Car General Maintenance Parts
Chemicals / Paint / Lubricant
Order turnaround (days)
Lower Quartile 2 1.8 2 -
Median 2 2.5 2 3
Upper Quartile 3 3.3 3 -
Mean (Avg.) 2.6 3 2.4 3.1
Vendor direct (% of business)
Lower Quartile 0.5% 1.5% 0.5% -
Median 2.5% 5% 1% 3%
Upper Quartile 12.5% 12.5% 11.4% -
Mean (Avg.) 8% 9.2% 6.3% 26.9%
Overnight shipping (% of business)
Lower Quartile 0.7% 0.2% 0.3% -
Median 1.2% 0.7% 1% 0.2%
Upper Quartile 2.8% 1.9% 2.5% -
Mean (Avg.) 4.5% 2.3% 5% 0.3%
Note: Chemicals product category does not include the lower or upper quartile to ensure confidentiality of those respondents.
2013 AASA Pulse: Supplier KPI Benchmarks 76
e-Tailing by Product Segment
Chemicals sell the most direct
through e-tailing
The under car product segment
estimates e-tailing has the highest
share of segment sales.
Respondent by Product Segment
Metric Engine Under Car General Maintenance Parts
Chemicals / Paint / Lubricant
e-Tailing through Direct Sales
Lower Quartile 0.2% 0.2% 0.2% -
Median 0.2% 0.2% 0.2% 1.2%
Upper Quartile 0.7% 1.7% 1.2% -
Mean (Avg.) 1.6% 1.8% 2.2% 1.2%
e-Tailing through Channel Partners
Lower Quartile 1.2% 2.2% 1.2% -
Median 2.2% 3.5% 2.5% 1.2%
Upper Quartile 3.5% 6% 4.3% -
Mean (Avg.) 4% 4.6% 4.2% 2.1%
Note: Chemicals product category does not include the lower or upper quartile to ensure confidentiality of those respondents.
2013 AASA Pulse: Supplier KPI Benchmarks 77
Financial Metrics by Product Segment
General Maintenance
spends the most on aftermarket
R&D as a percent of sales
Under Car has a slightly higher median SG&A
compared to other segments
Respondent by Product Segment
Metric Engine Under Car General Maintenance Parts
Chemicals / Paint / Lubricant
R&D (Aftermarket, % Sales)
Lower Quartile 0.7% 1.3% 1.3% -
Median 2% 1.8% 2.3% 1.8%
Upper Quartile 3.1% 2.8% 3.1% -
Mean (Avg.) 3.2% 2.4% 3% 2.6%
SG&A (percent of aftermarket sales)
Lower Quartile 5.5% 7% 5.5% -
Median 9.5% 10.8% 9.5% 9.5%
Upper Quartile 15% 23% 17.3% -
Mean (Avg.) 11.8% 14% 12.9% 15.9%
Note: Chemicals product category does not include the lower or upper quartile to ensure confidentiality of those respondents.
2013 AASA Pulse: Supplier KPI Benchmarks 78
Payment Terms by Product Segment
Engine and General Service have the longest payment terms of
the product segments to
retailers
Payment terms to WDs/Distributors
has the same median across
segments, though engine has some
outliers
Respondent by Product Segment
Metric Engine Under Car General Maintenance Parts
Chemicals / Paint / Lubricant
Payment Terms to Retailers (in days)
Lower Quartile 158 68 113 -
Median 258 158 258 113
Upper Quartile 326 258 326 -
Mean (Avg.) 221.7 161.7 201.8 149.9
Payment Terms to WDs/Distributors (in days)
Lower Quartile 68 68 68 -
Median 68 68 68 68
Upper Quartile 113 68 68 -
Mean (Avg.) 95.3 81.5 78.5 75.5
Note: Chemicals product category does not include the lower or upper quartile to ensure confidentiality of those respondents.
2013 AASA Pulse: Supplier KPI Benchmarks 79
Manufacturing Strategies by Product Segment
General Maintenance and
Chemicals manufacture the most in-house at median, though the story is the opposite at the mean; some
players in these segments have high levels of outsourcing
Chemicals manufacture
significantly more in the US than other segments
More than a third of parts (non-Chemicals)
manufacturing is in low cost countries
Respondent by Product Segment
Metric Engine Under Car General Maintenance Parts
Chemicals / Paint / Lubricant
% of Sales Manufactured In-House
Lower Quartile 45% 22.5% 15% -
Median 65% 65% 75% 75%
Upper Quartile 85% 85% 85% -
Mean (Avg.) 62.3% 56.8% 52.6% 49.6%
% of Sales Manufactured in US
Lower Quartile 25% 20% 25% -
Median 35% 25% 45% 95%
Upper Quartile 65% 60% 55% -
Mean (Avg.) 44.2% 41.1% 43.4% 83.6%
% of Sales Manufactured in Low Cost Countries
Lower Quartile 15% 7.5% 15% -
Median 35% 35% 35% 0.3%
Upper Quartile 55% 50% 55% -
Mean (Avg.) 37.6% 33% 35% 11.9%
Note: Chemicals product category does not include the lower or upper quartile to ensure confidentiality of those respondents.
2013 AASA Pulse: Supplier KPI Benchmarks 80
Marketing Spend by Product Segment
Chemicals spend the most of their
advertising budget on advertising
(many players in this segment have branded products)
Spend on trade fairs is roughly the
same across product segments
Chemicals and maintenance parts
spend more of their marketing
spend on customer specific
initiatives
Respondent by Product Segment
Metric Engine Under Car General Maintenance Parts
Chemicals / Paint / Lubricant
Marketing Spend – Advertising (% of overall marketing spend)
Lower Quartile 5% 5% 5% -
Median 15% 15% 10% 45%
Upper Quartile 25% 35% 25% -
Mean (Avg.) 20.2% 20.6% 15% 28.6%
Marketing Spend – Trade Fairs (% of overall marketing spend)
Lower Quartile 5% 5% 5% -
Median 15% 15% 15% 15%
Upper Quartile 25% 25% 25% -
Mean (Avg.) 21.8% 17.9% 15.6% 16.4%
Marketing Spend – Customer Specific (% of overall marketing spend)
Lower Quartile 15% 15% 25% -
Median 25% 25% 35% 45%
Upper Quartile 35% 45% 55% -
Mean (Avg.) 26.4% 32.1% 37.5% 42.1%
Note: Chemicals product category does not include the lower or upper quartile to ensure confidentiality of those respondents.
2013 AASA Pulse: Supplier KPI Benchmarks 81
Appendix A
Profile of Respondents
Full Responses to Selected Question
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Size of Respondents
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Number of Employees of Respondents
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Product Segments of Respondents
Note: Total does not add up to 100% due to respondents ability to select multiple categories
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Throughout your organization, how are you using POS/forecasting data provided by customers? (1/2)
“Compare POS data to trends”“Comparing customer generated forecasts to our own internal forecasts”“Component orders”“Demand planning, assortment recommendations, SKU sales and return trends”“Do not use.”“Forecasting. Inventory levels.”“Guiding light in terms of true product performance in store… We leverage this in combination of our outbound shipments to truly understand demand so we can be responsive to customer needs as well as proactive if we see issues with our key accounts who provide this.”“Helps determine potential demand activity for upcoming periods. Provides a picture of the "health" of the market when consolidated with other customers' performance. Allows collaboration with customers on determining market strategies in given markets.”“Identify specific regional / customer trends for new numbers.”“In our sales and operational planning process.”“Input into internal forecast systems”“Inventory modeling - we just started it, but it is very valuable.”
“Limited to sales forecast. Not used consistently for supply chain activities.”“Limited use”“Logistics team is using POS data for one major customer to track new part sales at store level to adjust SKU level forecast and planning to improve fill rates an reduce inventory.”“Mainly used for SKUs on the front end of the sales trend to monitor the ramp up in sales, as well as large changes in trend with mature or declining SKUs.”“Our customers forecasts are vital to our production scheduling and inventory planning to insure high order fill and control inventory costs.”“POS data very useful. Customer forecasts not very accurate, used on exception basis. We review forecasts with the customer when there are large discrepancies to our internal forecast.”“Purchasing / Forecasting; Product Management; Customer Category Management”“Rarely used”“Sales & Operations budgets, PC&L, Supply chain”“Sales forecasting”
2013 AASA Pulse: Supplier KPI Benchmarks 86
Throughout your organization, how are you using POS/forecasting data provided by customers? (2/2)
“The forecast error is approximately 50% and this applies to our customers as well. (Therefore ½ of what was made does not sell through for that period, simultaneously ½ of the actual demand is made in an expedite mode or via the good fortune of having raw based on the “minimum buy quantities” required by the supply-chain.”“To confirm internal information”“To determine inventory levels”“To improve our fill-rate”“To optimize inventory and order fill”“To order long lead time items and establish inventory levels”“To understand trends and to understand forecasting. To help plan for advertising budget.”“Unfortunately, we do not have a lot of additional information provided to us at this time.”“Use the data to bounce up against current forecast by customer to look for flyers/numbers that are trending significantly upward or downward.”“Used in product rationalization and forecasting”“Used in SIOP process.”
“Using both historical POS with running POS provides much more accurate forecasting capabilities. Comparing both also helps to identify growing and declining trends of specific parts or categories.”“Using it to predict future sales trends; assessing individual customers' share gains/losses.”“We cannot as it is terribly inaccurate.”“We have a dedicated analyst that uses the information to coordinate inventory plans.”“We try to understand customer forecast values and compare to our historic and forecast data to optimize materials management”
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Appendix B
Methodology
2013 AASA Pulse: Supplier KPI Benchmarks 88
AASA Pulse methodology notes
• The AASA Supplier Pulse report is an annual benchmarking survey covering key automotive aftermarket supplier performance indicators (KPIs).
• The purpose of the Pulse is to provide members with general information on high-level benchmarking of sector performance. The information and opinions contained in this report are for general information purposes only.
• Participation is only available to AASA supplier members. Full reports are provided only to survey participants and AASA Board members.
• Surveys are sent to senior executives and member representatives at all AASA members. There were 60 responses to this year’s survey.
• The survey covers 2012 data (calendar or fiscal year, depending on respondent). Answers were provided by respondents based on actual data if available or best estimates. Most questions were multiple choice, so numbers used in the report represent the midpoint of a selected multiple choice answer.
• The survey is anonymous and answers are kept strictly confidential. Therefore, only aggregated results will be reported and individual responses will not be released and will be destroyed after results are compiled.
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Contact Information
AASA | Automotive Aftermarket Suppliers Association
10 Laboratory Drive | Research Triangle Park | NC | 27709 | USA
www.aftermarketsuppliers.org
Paul McCarthyVice President
Industry Analysis, Planning and Member ServicesOffice: +1 919.406.8812 | Mobile: +1 248.914.2567
Email: [email protected]
Bailey L. W. OvermanAnalyst/Coordinator
Industry Analysis and Member ServicesOffice: +1 919.406.8823
Email: [email protected]