New Procedures Focus on Safety, Ingenuity to Continue Delivering for Customers

As businesses nationwide begin to eye ways they can start ushering customers back into their doors, numerous questions still exist about how long social distancing guidelines will govern how companies conduct day-to-day operations.

Until those questions are answered, SCL has modified several of its services so that businesses from automotive to industrial manufacturing can still get the critical expertise they need without sacrificing a high level of safety.

“Our goal is always to put our customers first, to provide the products, services and the expertise they need to get and stay on track with their operations,” said SCL VP of Customer Solutions Dan Dziwanowski. “Right now, some of our customers have their doors closed, others have ramped up their production in new ways. We want to make sure that however their business has been affected by the coronavirus pandemic, we offer some tangible, safe ways to get them either back on track or moving forward strategically.”

In an effort to stay compliant with social distancing guidelines, SCL is now offering the following services to new and existing customers:

Contactless Oil Analysis

Oil analysis has long been a tool that SCL customers can utilize as part of a preventative maintenance program. Pulling samples from fleets or facilities can provide detailed insight into the performance of machines and whether they are working efficiently and effectively.

In SCL’s Interaction-Free Oil Analysis program, customers receive “Certified Clean” 4-ounce sample bottles and USPS First Class Prepaid Envelopes in the mail. They pull samples themselves, with guidance from an SCL expert if needed, and then send those samples off. Results, which include OMA1 certified diagnostics and expert analysis on all reports, are delivered via secure Web portal. SCL experts then meet with customers virtually to discuss the results and options they have moving forward.

“For many businesses, this may be a good time to do some housekeeping, which includes oil analysis,” Dziwanowski said. “Checking factors like your oil viscosity and your particulates can give you some insight into whether you can maybe alter the products you use or if you can go longer between service intervals. Those are cost-saving opportunities, which can help in slower times like these.”

Virtual Facility Surveys 

To comply with California’s continuing stay-at-home guidelines, SCL experts are also offering virtual plant and equipment surveys to replace in-person consultations. Using Facetime and Zoom, customers will “walk” through their facility with an SCL expert, just as they would in person.

“We don’t want to lose contact just because times are tough,” Dziwanowski said. “It’s fairly easy for us to continue helping our customers in this way, virtually going through their shops so we can see how they’re storing their inventory, maybe what inventory they have and some ways they can get it out the door, any issues involving safety and compliance, product offerings and any other concerns they may have.”

Virtual facility surveys incorporate assessments of:

• Product selection

•  Product integrity

•  Optimized lubrication intervals

•  Lubrication program management

•  Inventory management

Inventory Analysis via Video

Specific to inventory, SCL experts also offering remote inventory analysis to help businesses review the products they keep in stock, how those products are being sold and applied, and whether their program can save costs by making adjustments.

“We can also help people source additional products they may need specific to the time we’re in, including hand sanitizer, desk sanitizer, shop gloves, steering wheel covers, anything they may need to maintain the safety of their employees and their customers,” Dziwanowski said.

Source of Industry Insight

In addition to modifying services for customers, SCL experts continue to provide insight into industry happenings, keeping businesses in touch with how people in their space are responding.

“Right now, it’s all about helping our customers either get or stay moving, even if it’s just preparing for their doors to open for business again,” Dziwanowski said. “We want to make sure their machines are taken care of, their inventory is concise, their menu offerings are clearly visible for customers when they walk in the door. Those are all things our experts can help with, even if it’s in a new way for the time being.”

 

Contact an SCL Consultant today 

In a wide range of automotive, industrial and commercial sectors, SCL remains steadfast on its commitment to product and industry knowledge, performance satisfaction and superior logistics. We protect and optimize the machines that keep our country moving. For more information on how we help can help with services including bulk purchasing or managing inventory, contact an SCL expert today.

 

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Enhancing Communications, Connecting with Routine Services Will Be Key

While uncertainty lingers about when and how restrictions surrounding the coronavirus (COVID-19) pandemic will begin to ease, car dealerships and automotive shops should already be brainstorming ways to bring in customers.

In California, as Gov. Gavin Newsom and local governments begin to map out how an eventual reopen will look, discussions are centering on opening retail as soon as May and other businesses in June and into the fall, according to the Los Angeles Times.

For the automotive industry, one of the hardest hit industries nationwide, that timeline means work should begin now contacting customers, setting up appointments, and brainstorming ways to attempt recovering from a dismal first quarter.

Here are four areas that dealerships and automotive shops should be focusing on in the weeks leading up to a re-open and moving forward afterward:

1. Utilize Business Development Departments

SCL Customer Solutions Specialist Don Parker, who has spent the past 40 years in various roles in the automotive industry, believes any traction dealerships and shops experience will demand communicating to current and prospective customers what they need.

“You have to find ways to get people in the door,” Parker said. “That doesn’t have to mean services that break the bank. We’re talking timely and relevant services that you can do to help customers whose cars have been sitting for the past two months or more.”

That could mean a complimentary tire pressure and battery check, and then scheduling future service appointments once customers are at the shop, he said.

“Right now, you need to work on putting your customers at ease, showing them you have a service they need,” Parker said. “All these vehicles that have been sitting, they’ve been losing tire pressure and battery voltage. You can offer a service now to check those things, and when we’re on the other side of it those customers will know you helped them avoid a dead battery or another headache at a time when they’re trying to get back to normal.”

Filling service lanes will also, hopefully, create additional opportunities to tactfully and responsibly plant seeds on upgrading vehicles for the same payment or lower.

“Sales may not look the same for awhile,” Parker said. “These dealerships that sell 30-100 cars per month in the service drive, that could be something to focus on.”

 

3. Keep Sales Expectations Realistic, Focus on Service

When sales departments do come back, it’s essential that dealerships don’t expect too much, too fast.

According to Forbes, although a January forecast for new car sales from Edmunds.com predicted this year would match the record 17.1 million new vehicles sold in the United States in 2019, that is no longer the case. Experts now predict a prolonged slow down through the end of the year resulting in an estimated 15% year-over-year sales decline in 2020. According to an April 2020 survey by Automotive News, about two-thirds of auto dealers estimate that number to be 20%.

Despite a potential frenzy to make up first-quarter profits, Parker said, dealerships should move slowly and think out of the box, possibly by starting contactless pick-ups, appointment-only contact with sales representatives, and so on.

“Once they decide ‘OK, we’re going to start opening the economy and car dealerships are going to be allowed to do business again,’ I think it’s important that car dealerships recognize the environment they are in,” Parker said. “That could mean wearing masks, maintaining social distancing, allowing customers to drive cars without someone with them, maybe even take the cars home and bring them back. The businesses who think outside the box are the ones who are going to be most successful. This is not going to be a race.”

The Automobile News survey also showed that dealership owners now believe only about 21% of profitable growth will come from new and used vehicle sales following the coronavirus.

 

3. Enhance Online Shopping Experiences

In the second week of April, for the first time since the coronavirus hit the United States, the number of visitors to Cars.com increased by over 10% and leads to national dealerships have grown 15%.

That not only means consumers are begin to move toward car buying behavior again; it also means they are turning to the Internet prior to visiting a dealership, which Parker says is nothing new.

“People already do their shopping online, that won’t change,” Parker said. “What may need to change is the attention that dealerships put on that mode of shopping. If people can find what they need and get approved for an interest rate beforehand, reducing the time they spend at a dealership, that could make a direct impact to sales as we begin to ease back into our normal.”

Especially with uncertainty surrounding when businesses will reopen or when consumers will begin buying cars again, providing the option to shop from home is critical.

 

4. Protect Employees and Customers First

The most paramount consideration once sales departments re-open and service lanes begin to pick up should be the safety of employees and customers.

“You have to be able to put your customers at ease, and that means instituting ways to protect your people and protect them,” Parker said. “Social distancing procedures, wiping off cars after passenger drop offs and then again prior to pickups, seeing customers by appointment when it comes to car sales, all of that will need to be figured in.”

 

Regardless of what approaches or new strategies dealerships and shops take as restrictions lift, Parker said, one thing is for sure: “you’re going to see a lot of cars out there that need to be sold. We’re hearing offers like 0% interest for 84 months, three months with no payment. The dealerships that accept this environment is not going to just go away, the ones who take measures to adapt, those are the ones who will come out of this successful.”

Being creative, he said, is also vital. Considering measures like priority hours or promotions for first responders and healthcare workers could go a long way in not only instilling confidence but also connecting with the community.

 

Contact an SCL Consultant today 

In a wide range of automotive, industrial and commercial sectors, SCL remains steadfast on its commitment to product and industry knowledge, performance satisfaction and superior logistics. We protect and optimize the machines that keep our country moving. For more information on how we help can help with services including bulk purchasing or managing inventory, contact an SCL expert today.

 

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With Sales Down, Dealerships and Shops Reduce Staff, Expenses to Remain Open

Although some SCL partners reported a spike in new car sales immediately following a move by the Federal Reserve slashing interest rates to nearly 0%, most in the industry are relying heavily on their service departments to carry them through the coronavirus (COVID-19) epidemic.

On top of economic uncertainty, efforts to social distance – and stay home altogether – have  all but forced many dealerships to lay off sales staff and cut positions in other departments beginning in mid-March.

WHAT’S GOOD IN AUTOMOTIVE

Although the news is mostly disparaging – from disruptions in supply chains to a dramatic fall in sales – service facilities are still operating. For now, according to SCL Customer Solutions Specialist Don Parker, that’s a win.

To keep from closing their doors altogether, dealerships and independent shops have laid off staff, reduced hours, and in some cases decreased the number of technicians in their service departments. Those measures, although unfavorable, have allowed doors to remain open and work to continue.

“People are still bringing their cars in for service, whether that be for repairs or maintenance,” Parker said. “And these guys will continue working as long as they can and as hard as they can. That’s the way of the automotive industry – you’ve got family run shops that have been in business for 30-40 years, and they’re going to continue to do whatever they can to keep business as normal as possible.”

WHAT’S CONCERNING IN AUTOMOTIVE

When customers are not coming on the lot, sales are not taking place. And when cars are not being used, service lanes aren’t as full.

Those two issues alone present the greatest challenges to the automotive industry, which relies heavily on service and parts departments for income. Even if near 0% interest rates were to bring customers in, dealerships don’t have as much opportunity to earn from financing and other hard adds like they normally would.

“Right now, you have layoffs happening, especially in sales departments. You have lower profits and you have the same expenses — including rent, which is pretty high at a lot of these dealerships because they typically have large pieces of property,” Parker said. “If this goes on too long, everyone is going to have a hard time surviving. If this were to go on for 90 days there are a lot of dealers that it would really bury without some support.”

OPPORTUNITIES IN AUTOMOTIVE

Right now, opportunities in automotive are limited, but if you have cash, there is always potential.

“Unfortunately, by the time this is all over with, people are going to be selling businesses for pennies on the dollar,” Parker said. “There’s opportunity for acquisition, but honestly I think most people are just looking for ways to minimize the impact. This will be a burden on everyone in automotive in some way, but there are opportunities to help minimize the effect of this over time.”

For many, that means reducing staff and hours, taking precautions for staff members who continue to work, possibly taking advantage of small business loans, reducing expenses and biding time.

 

Contact an SCL Consultant today 

In a wide range of automotive, industrial and commercial sectors, SCL remains steadfast on its commitment to product and industry knowledge, performance satisfaction and superior logistics. We protect and optimize the machines that keep our country moving. For more information on how we help can help with services including bulk purchasing or managing inventory, contact an SCL expert today.

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Productive Responses You Can Take in a Volatile Economy

SCL Offers Perspective as Coronavirus Continues to Disrupt Business Operations

The federal government has lowered interest rates, national sport leagues have suspended games, travel from Europe to the United States has halted, and businesses nationwide are trying to calm customers as fears surrounding the global spread of coronavirus (covid-19) build.

In the past several weeks, since the virus that originated in Wuhan, China has spread globally and infected thousands, the stock market has gyrated. In perhaps the most significant move by the federal government to encourage investors, the Federal Open Market Committee recently slashed rates to the lowest they have been since 2008. With the deceleration of a National Emergency, funds become available to state and local governments.

In addition to cushioning the blow for businesses, many of whom are dealing with decreased customer turnout, lower interest rates could pose some opportunity in our industry.

“This may be an uncertain time, but it’s also the best time to assess and take some measures that could positively impact your long-term growth,” said SCL General Manager Travis Becktel. “Taking advantage of lower rates now can create success later on. We want all of our customers to recognize this as an opportunity to grow while still acknowledging that it is a significant obstacle.”

As ITR Economics puts it, “it is more important than ever to base decisions on empirical data rather than emotional response.”

 

Refinance Your Loans and Seek Lines of Credit

With rates the lowest they’ve been in over a decade (1% to 1.25%), it may be an opportune time to refinance business loans. This could mean lower monthly payments in the short term, which can free up additional working capital in your budget.

According to U.S. News & World Report, refinancing business loans can be a bit more restrictive than refinancing mortgage loans but is typically available for:

• Term loans

• Working capital loans

• Equipment loans

• Commercial real estate loans

• Microloans

• Business lines of credit

 

Increase Your Marketing Efforts

For many of our partners, lower interest rates are also a benefit that should be communicated to customers. This means boosting marketing efforts directly through channels like email and direct mail or indirectly through social media public relations efforts.

For our automotive partners, this is especially imperative considering the negative impact coronavirus has already had on parts inventory and buyers on the lot. Stacey Miller, senior director of communications for the Auto Care Association, a trade group representing 150,000 auto aftermarket and service businesses, told NBC News “by mid-March, the shortage of supplies will be felt and members are projecting they’ll experience disruption through May or June” even if operations in China soon get back to normal.

While decreases in revenue from parts departments and body shops should be expected, one strategy could be to focus efforts on front-of-lot sales through increased marketing.

 

Consider Capital Improvements

Although there is some uncertainty with regard to first quarter (and possibly second quarter) profits, if you have had capital improvements on the docket, this may be an ideal time to start implementing those plans.

Lower interest rates on loans and lines of credit could mean getting new equipment or expanding your business for a lower overall cost than you initially projected.

“While things seem uncertain right now, historically, markets tend to recover in the long term,” Becktel said. “If you take advantage of lower rates now, your business could be in a better position when that recovery occurs.”

If there is a recession or damage to the overall economy, some companies may need to sell assets to stay afloat and others may be forced to close their doors. Keeping cash on hand or having the ability to access capital through business loans will help you react to opportunities to obtain machinery at discounted rates. If your competitors need to size down their fleet, acquisitions could become part of your strategy.

 

Assess Your Inventory

When it comes to inventory, it’s probably wise to assume the products you’ve had access to on a regular basis may not be available in the coming months for a variety of supply chain related reasons. Do not assume anything. Instead, SCL recommends keeping your fuel tanks full and to begin taking inventory of what products you have on hand that could be affected.

This could mean replacing products currently on your shelves with others that don’t come from China, or investing in products with multiple applications, reducing the need for so many product types.

The goal, as always, is to have what you (and your customers) need in stock, which may merit introducing new products.

 

Monitor Government Action

It’s always a good idea to keep tabs on any reactions from the federal government, especially in a volatile economic environment. Most recently, President Trump announced on Friday, March 13 he has instructed the Small Business Association to provide low-interest loans to small business affected by the coronavirus outbreak.

The loans, which are only available for small businesses that can’t secure loans elsewhere, are designed to help “meet payroll; stay liquid during drops in customer demand or delayed payments; and look for alternatives or manage supply chain issues,” according to Workest.

The SBA’s established Economic Injury Disaster Loan (EIDL) program will provide working capital loans up to $2 million for economic support and help overcome temporary revenue loss during the outbreak.

For more about qualifications and if you apply, contact the SBA.

“The bottom line is that although we encourage our partners to take the necessary precautions to face this crisis, it’s still possible to keep their businesses moving forward,” Becktel said. “Our experts can help partners in any industry sector make decisions and employ strategies that keep growth on the front burner.”

 

Contact an SCL Consultant today 

In a wide range of automotive, industrial and commercial sectors, SCL remains steadfast on its commitment to product and industry knowledge, performance satisfaction and superior logistics. We protect and optimize the machines that keep our country moving. For more information on how we help can help with services including bulk purchasing or managing inventory, contact an SCL expert today.

 

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The Coronavirus and Its Impact on Industry

Shipping Delays, Disruptions in Manufacturing and Logistics Already Being Felt

As China and now several other countries continue to experience devastating health effects of the coronavirus, impact is also being felt among American businesses, including automotive, manufacturing and oil.

As industries across the board experience shipment delays and disruptions in supply chains, businesses are being forced to make due with current inventory, solicit new sources for products, or even consider different options that don’t include parts or material from China.

According to The Washington Post, the coronavirus has “brought China’s powerful manufacturing industry to a standstill as travel restrictions freeze the country’s workforce and major companies such as Boeing, Apple and Nike have been forced to close factories.”

Although many were expected to reopen on Feb. 17, factories will be playing catch-up for awhile.

Disrupting Supply Chains for DEF, New Equipment

Specific to our industry, delays in shipping and the mangling of supply chains has meant a stall in the delivery of DEF to our partners as well as new equipment made or partially made in China, including construction vehicles.

According to The Washington Post, “Some of the United States’ best-known manufacturers such as General Electric, Caterpillar and the Big Three automakers, along with many smaller American businesses, depend on what is made in Chinese factories.”

The availability and price of DEF could also be affected, most notably on the West Coast. Because much of the West Coast urea is manufactured in and shipped from China, the ripple effect is felt more here than on the East Coast of the United States.

Gridlocking the Automotive Industry

According to CNN, global carmakers who have invested heavily in China like General Motors, Toyota and Volkswagen are also feeling the heat. The outbreak has kept potential buyers at home and it has gridlocked the production and shipment of parts critical to moving U.S. assembly lines.

“One car part can stall the production of a vehicle. In this case not only are supply chains for our automotive customers greatly disrupted, but our marine and trucking customers are also taking a hit because they would typically be responsible for handling shipments that arrive at our ports,” said SCL General Manager Travis Becktel. “This isn’t the type of situation that just affects one industry. Our goal is to help our customers understand that if they haven’t already, they need to explore strategies and procedures that will help carry them through until factories reopen and shipments resume.”

Traditionally, businesses plan on operations in China to halt from mid-January to mid-February due to observance of the Lunar New Year. For nearly a month each year, factories close and workers travel to rural areas to be with their families. To account for the gap, U.S. businesses typically stock up on products and materials, but the coronavirus has extended that break even further.

Affect on Already Dropping Oil Prices

As far as the oil industry goes, the outbreak is just another hit manufacturers have been forced to absorb as best they can in the past year.

Already low commodity prices have left U.S. oil producers with lower profits – which has in turn led to a drop in exploration and production. Economists predict the coronavirus will lead to another sharp downturn, which could mean lower prices for drivers but also less profit for American companies.

China only buys about 200,000 barrels a day of oil and refined transportation fuels from the United States out of 8.5 million barrels of total daily American exports. But oil is a global commodity – not a domestic one. Small shifts in the market, regardless of where they occur, can and do lead to worldwide impact.

According to The New York Times, “Just a few weeks after the outbreak of the virus, daily Chinese oil demand is already down 20 percent because of dwindling air travel, road transportation and manufacturing. Since China consumes 13 of every 100 barrels of oil the world produces, every oil company is being hit to some extent.”

The Bottom Line

There are many areas of our industry that are already feeling a negative impact from the coronavirus, but long-term effects are largely unknown.

Although Chinese markets and the U.S. economy rebounded fairly quickly after the severe acute respiratory syndrome (SARS) outbreak of 2003, “there is no guarantee the coronavirus will take a similar path,” according to The Washington Post.

“Above all else, we want our customers to be prepared this may cause a long-term impact to their businesses,” Becktel said. “If that is the case, we can help them find solutions in terms of product sourcing and finding new ways to meet their profit goals.”

Contact an SCL Consultant today 

In a wide range of automotive, industrial and commercial sectors, SCL remains steadfast on its commitment to product and industry knowledge, performance satisfaction and superior logistics. We protect and optimize the machines that keep our country moving. For more information on how we help can help with services including bulk purchasing or managing inventory, contact an SCL expert today.

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