A Supplier Driven eCat Model

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• A Supplier Driven eCat Model

Bob Moore General Manager - Free-Cat
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Whya Supplier Driven eCat Model?

• More than 90 of aftermarket parts sales are
  facilitated by EPCs
• The typical time between a new parts
  availability and its appearance in 3rd party EPCs
  is 60 to 150 days
• This costs aftermarket millions each year and
  drives business to OESDs

These problems have festered for years and
someone needs to do something!
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The Solution

• NA manufacturers need to take charge of their
  destinies by forming a broad coalition to produce
  and distribute their own leading edge,
  Web-based EPC that can be updated on a daily
  basis if need be
• Those same manufacturers need to take much
  greater responsibility for the accuracy of their
  data

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The Premise

• Everyone benefits if data is available faster
• Faster new number availability will shift
  purchase from OESD to aftermarket suppliers
• Correcting data errors faster will reduce returns
  eliminate stranded part numbers
• Quicker data flow would increase revenue, reduce
  costs, keep installers aftermarket loyal
  improve the quality of customer services across
  the channel

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Enter Free-Cat

• A Supplier Driven eCat Model

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Free-Cat is Not Exactly a Revolutionary Concept

• In fact, it is nearly identical to the
  aftermarkets traditional distribution model for
  paper catalogs

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In The Traditional Model

• Manufacturers assumed complete responsibility for
  their paper catalogs
• Researched OEM applications
• Engineered products
• Assigned part numbers
• Validated data accuracy (form, fit function)
• Aggregated the data and published it
• Distributed catalogs (through channel partners)
  to jobbers and installers

The goal is to replicate that model -
Electronically
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Three Simple Objectives

• Address the needs of our common customer, the
  installer, ahead of everything else
• Get additional and more accurate data to the
  market in hours or days, not weeks or months
• Treat data and other intellectual property
  securely and fairly on behalf of its owner

Regrettably Not Being Done Today!
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Intellectual Property

• Treated securely and fairly on behalf of its
  owner is what Free-Cat is all about

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Free-Cat Membership Criteria
From the Free-Cat By-Laws

• Membership in Free-Cat is available to all bona
  fide suppliers of authentic motor vehicle parts
  and accessories with unique identifying numbers
  and/or letters that are neither copied nor
  derived from similar parts produced by others
  without the other firms express consent and
  authorization.

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Free-Cat Membership Criteria
From the Free-Cat By-Laws

• Bona fide suppliers will generally
• Utilize a unique part numbering system UPC
  codes issued by GS1
• Have one (or more) formal written agreements to
  obtain original equipment data from an OEM
  licensed data supplier
• Design develop original products and
  corresponding product application data

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Free-Cat Membership Criteria
From the Free-Cat By-Laws

• Bona fide suppliers will generally
• Develop mass produce printed catalogs either
  using a dedicated full time catalog staff or a
  Free-Cat signatory data provider
• Create distribute original product images of
  parts accessories that are supplied by the firm

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Treat intellectual property fairly

• Data owner retains all ownership rights
• Data in Free-Cat will only be shared with parties
  authorized by the data owner
• Data in Free-Cat will never be sold to anyone
• Only data that is the property of the data owner
  is allowed in Free-Cat

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What Free-Cat is

• A standards-based look-up utility
• matches a year, make model with a part
• Database of member companies application data
• A website with up-to-the-minute data for
  distributors, countermen installers
• A governance body that
• Screens members for ethical data practices
• Authorizes developers to use Free-Cat

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What Free-Cat is Not

• A commercial eCat
• An industry data warehouse
• An exchange or hub for purchase transactions
  between trading partners
• An unrestricted web site that makes theft easier
  for data pirates

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How is Free-Cat Different?
For Developers

• Today - must license an existing eCat, typically
  requiring an upfront fee and/or per transaction
  fees
• That adds cost to eCommerce
• There has been no alternative look up utility
  with a well populated database until now

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How is Free-Cat Different?
For Practitioners

• When data is missing or ambiguous, multiple
  visits to supplier websites are required to
  capture required data
• That adds delays and costs to repairs
• There is no single go-to source with the most
  current product and application data until now

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Free-Cat is

• An independent not-for-profit corporation
• Manufacturer led (data owner led)
• Without employees (volunteers contract
  providers)
• Standards-based
• Free to resellers and service dealers
• Cost-effective for manufacturers and developers

Free-Cat exists solely as a service to improve
the availability accuracy of data, especially
at the shop level
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Who Started Free-Cat

• Leading suppliers got the ball rolling

• Affinia
• Cardone
• Federal Mogul
• Standard Motor

• Bosch
• Dayco
• Gates
• Tenneco

Free-Cat Membership Is Open To All Aftermarket
Suppliers Who Qualify
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Why Not Thru an Association?

• Competing interests of membership
• Technology providers
• Manufacturers with no data capability
• Need for timely action
• Smaller groups can move faster
• Control could eventually be turned over once the
  path is set

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How Will It Work?

• Data owners submit data to Free-Cat
• Free-Cat publishes electronically
• Manufacturer approves and the Free-Cat database
  is updated
• User feedback is formalized and shared with data
  owners
• Corrections updates made and approved by data
  owner are immediately distributed

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How is Data Submitted?

• Data can be submitted in any format
• (ACES is preferred, but also Legacy, XML, Excel,
  flat files)
• Other-motive is accommodated
• Manufacturers can submit data directly or use a
  data service provider who is a Free-Cat signatory
  

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What is a Signatory Data Service?

• One that signs an agreement obligating it to
• Honor the data practices of Free-Cat
• Never use pirated data
• Protect the intellectual property of other
  companies
• Existing aftermarket providers will be recruited
  to participate

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Is there actually a Free-Cat?

• No - Not in the sense of a branded service
• More like Intel Inside or Saber
• The look-up engine inside commercial aftermarket
  applications
• Yes - in that there is a website with
  up-to-the-minute data for installers parts
  sellers

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How is Data Distributed?

• Two ways
• Free-Cat.com
• Signatory developers applications

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Free-Cat.com

• Site free to any aftermarket practitioner
• Registration/validation required
• Ability to access the database and look up
  applications for all member brands
• No pricing, stock checking or ordering
• An on-line resource to find and research
  application and product data, with a SINGLE
  NAVIGATION STYLE

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Free-Cat is Othermotive Ready
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Signatory Developers

• Any software developer that wishes to utilize the
  Free-Cat catalog may do so by signing a
  developer's agreement and paying an annual fee

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Signatory Developers

• Agree to
• Use only data provided by Free-Cat
• Never charge transaction fees to users
• Make all brands in Free-Cat visible to techs
• Share enhancements made to the look-up utility
  with other developers and users

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What Does It Cost?

• Free-Cat manufacturer annual dues
• 7500 but adjustments may be made based on number
  of lines/brands, SKUs, annual sales and
  condition of data
• Developers
• 7500 annually for unlimited use
• Channel Partners Installers
• Free unless they are acting as a developer

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Anticipated Benefits

• New numbers to the market faster will reduce the
  exclusive time period that OESDs enjoy
• Faster correction of errors which will reduce
  returns
• Reduce the number of export file formats
• Provide better protection of intellectual
  property
• Establish a means for distribution of product and
  technical information directly to installers
• Reduce costs for everyone in the supply chain
• A one-stop resource for the most up-to-date
  product and application data for countermen and
  installers

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Some Final Thoughts

• ...on the state of data technology in the
  aftermarket

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Market Influence 1970s
High
Moderate
Low
Reseller
Installer
Manufacturer
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Market Influence 2000s
High
Moderate
Resellers assert their control on the buying
relationship with installers and dictate what
brands are offered
Low
Installer
Reseller
Manufacturer
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Market Influence Goal
A level playing field with the technician enabled
to make brand and product decisions for himself
High
Moderate
Low
Installer
Reseller
Manufacturer
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Some Issues On the Radar

• IT executives role in affecting management
  thinking
• Tactics to defend your IP
• A looming data threat
• Some risks associated carry-forwards
• How Free-Cat represents a template to address
  other manufacturer threats

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Impacting Managements Thinking

• What role IT executives need to play
• Warn them about the bats

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Should I warn him about the bats?
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Whats the point, the poor bastard will see them
soon enough.
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Role IT executives need to play

• Warn them about the bats
• Tell them what they have invested
• How quality data differentiates a company from
  domestic LCC competitors
• Better data and systems sell more products
• Data is an asset worthy of defending
• Data is a leverage point to improve channel
  partner relations

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Tactics to Defend IP

• Free-Cat can help not THE answer
• Greater vigilance
• Instill trap lines (set up data thieves)
• Monitor and verbalize (be a squeaky wheel)
• Protect your ownership rights (legal data
  agreement)
• Take violators to task (Tenneco, Dayco AASA)

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A Looming Data Threat

• OEMs are tightening the screws
• ProQuest
• GM
• Honda
• Ford
• Act collectively to assure access to data
• Problem is on AASAs radar

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The Risk of Carry-forwards

• Increasing numbers of data providers, channel
  partners and suppliers are relying on
  carry-forwards as a means of expediting new
  model coverage
• Carry-forwards without appropriate application
  engineering is a risky practice
• But why?

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The Risk of Carry-forwards
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The Risk of Carry-forwards

• The mere matching of OE part number does not
  necessarily mean that the aftermarket part
  carries forward
• 75 to 95 range
• Raise serious issues of who is liable in cases of
  warranty claims
• Some manufacturers are considering statement of
  legal limitations of liability as pertains to
  carry-forwards

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What Does Free-Cat Represent?

• When viewed as a template for manufacturer
  collaboration, then why not
• Negotiate access OE data
• Facilitating new data related initiatives
• VIN look-up
• VMI/CPFR
• Addressing warranties
• Managing returns

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One Final Recommendation
Warn your bosses about the bats!
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Questions?

• Lets Talk About It

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Arent you overstating the OESD threat

• We all know they are never going to get serious
  about the parts business.

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Critical Market Impediments

• Data delivery and error corrections are too slow
  in reaching the marketplace
• Not enough data is getting to market, and not
  enough of what is makes it to the service bay