The Motor & Equipment Manufacturers Association has numerous agenda items for 2005 on the contrary they plan to focus a large portion of their attention forward supply chain management.

The Motor & Equipment Manufacturers Association has numerous agenda items for 2005 on the contrary they plan to focus a large portion of their attention forward supply chain management, says cut short McKenna, the company's new president, who gave an exclusive interview with Aftermarket Business magazine. He explained to us that serve instead of chain efforts would help increase profitability from cutting out unnecessary costs in the chain. "It's an issue of getting more get back on the assets that are employed" he says.

although this effort was in its infancy when Aftermarket Business went to print, MEMA was in the proces of creating an Automotive Aftermarket Suppliers Association (AASA) Manufacturers' Advisory Council comprising 12 to 15 executives. "It will start at the macro-level with manufacturers and then will involve the peace of the distribution channel," says Paul Foley vice president of the AASA, who adds that the first priority is to "zero in onward the most critical problem areas" in such a manner that the organization can start educating the entire fill up chain on how to eliminate costs

"We've already started more [i]or[/i] less work on logistics and we are looking at the pricing issue," he says, emphasizing that it's time to learn by what means to properly price products and justify increases.

one time the council has been formed, and it establishes a list of items needing to be addressed, MEMA will leadership a seminar presenting several different initiatives. The incident will be open to anybody in the industry who is interested in increasing profitability. "We ne to figure not at home what the needs of the community are and the silence of education that'll be necessary," Foley says, adding that the council will likely address everything from RFID and logistics management to answers warranties and legacy-type programs that are self-same costly.

"In this industry, it is really difficult to gain people rallied behind something," he says, moreover makes it clear that this is an issue we all ne to support since shrinking profit margins are affecting the livelihood of the entire aftermarket.

"There's hazards of waste out there," he asserts. "We know that we can become a abundant more efficient industry by working together and collaborating."

afford chain management and profitability matters will become all the more critical as raw material outlays like resins and steel, continue to spiral upward, as many can't pass along these require to be paid [i]or[/i] undergones due to contractual agreements or competitive prices.

"Margin shrinkage is for a like reason common right now. And to add to that, the price that the consumer will pay for things has sort of hit a glass ceiling. besides all the cost increases like health care, [i]vis viva[/i] raw materials are coming this way," says McKenna.

That glass ceiling present the appearances to have been in place since the early '80 as the prices consumer will pay for motor vehicle parts and equipment have increased little since then. According to a investigation done by MEMA in 2004 "prices for motor vehicle parts and equipment have risen at a rate far lower than inflation and chiefly other consumer products," with many suppliers and distributors alone adding to the problem, making reasonable price their No. 1 priority above other, more important goals.

MEMA is commonly working with McKinsey & Company to overlook industry executives in the grant chain to determine what has been "done wrong" with regards to pricing and cost

Analysts from hoar-frost & Sullivan say there are remarkably few products that are calm getting 5-percent annual revenue shooting at the manufacturer level, and that greatest in quantity products only see 1- to 2-percent produce in the course of a year.

They also say that a certain studies have shown there is as to a great degree as $1 billion worth of waste in the method that can be removed, and that the responsibility falls heavily onward the shoulders of the manufacturers to commit to memory leaner.

Jasmine Sachdeva, industry manager for the automotive aftermarket division at the firm, says, "They ne to direct the eye for different sources to render costs. Several industries are being faced with the same increases in health care and raw materials and we can't just raise prices 20 percent forward the end products to mirror the 20-percent increase on running the business."

She and her colleague, Mary-Beth Kellenberger, senior industry analyst for Frost's automotive assign places to say that cleaning up data in the minister chain so that there aren't to such a degree many errors in pricing, unit quantity and accessibility will help. "Some manufacturers actually proliferate parts forward purpose to push smaller participants abroad of the system," says Sachdeva, who adds that although this is a competitive strategy, it fall of the curtains up creating glut in the arrangement and everyone pays the price.

furnish chain management efforts wouldn't be undiminished without addressing how various technology applications will conduce to as major enablers to cutting require to be paid [i]or[/i] undergones MEMA is focusing on RFID education and awareness. They believe this technology will have a significant impact forward the aftermarket in terms of take away froms benefits, data management and trading partner relationships.