Service Parts and Accessories Operations 101
Starting Point -- Toyota's North American Parts Center California (above), along with the North American Parts Center Kentucky, are the first tier in the organization's vast service parts and accessories network that helps keep Toyota and Lexus customers moving forward.
It employs nearly 2,000 team members. It generates more than $5 billion in revenue annually. Yet, if it’s doing its job professionally and efficiently you hardly know it’s there.
What is this mysterious “it?”
TMNA’s Service Parts and Accessories Operations (SPAO).
Everyone knows manufacturing and selling vehicles is TMNA’s bread and butter. But you might not be aware that it also develops, procures and sells parts — some 400,000 different parts at any one time. SPAO uses these parts to fulfill more than 125,000 parts orders every day.
“The way I describe our business to people is that we sell cars two ways: in whole and in pieces,” says Neil Swartz, SPAO vice president. “Our mission is to make sure all of the pieces are always in the right place at the right time. We serve the people who serve our customers.”
Who are SPAO's customers? First and foremost, the 1,500-plus U.S. Toyota and Lexus dealers who interact directly with vehicle owners. Also on that list are four North American distributors — Southeast Toyota, Gulf States Toyota, Toyota Canada and Toyota Mexico — and 13 vehicle distribution centers. And this organization supports the parts needs of distributors in 34 countries where Toyota exports its North American-built vehicles.
Bottom line: Wherever TMNA sells its vehicles, SPAO is there, most often working behind the scenes to keep everything and everyone moving forward.
Parts Picking -- Warehouseperson Juan Llamas retrieves the specific part needed from among the thousands stocked at NAPCC.
Time is of the Essence
As such, the core competency of this far-reaching organization — comprised of about 430 professional and administrative personnel and approximately 1,500 production warehouse team members — is logistics. The journey starts with over 600 suppliers across North America as well as those in Japan, Europe and Asia that source the needed parts. They, in turn, are collected at two major parts centers, in California and Kentucky. From there, the parts are funneled through to TMNA’s 14 parts distribution centers (PDCs), and distributors and then on to all Toyota and Lexus dealers with the help of 54 transport partners across sea, air, road and rail.
At every step along the way, time is of the essence. When a Customer brings a Toyota or Lexus vehicle in for service, that dealer needs the right parts — as soon as possible — to meet that customer’s needs and keep them loyal to the brand.
In recent years, SPAO has come up with innovative ways to make it happen. So, for most
dealers, parts ordered the evening before, arrive during the middle of that same night when the dealership is closed. But for dealers based in 36 metropolitan markets, same-day delivery is now the norm.
“If a dealer places a Same Day Service order by 10-11 a.m., we can usually get it to them that afternoon. That way they can tell the customer they’ll have their car back the same day,” says Swartz. “Most dealers, on average, only stock about 3,500 part numbers. We manage 400,000 systemwide. So, dealers depend on us, much in the same way you depend on water flowing when you turn on the faucet or electricity when you flip a switch. When it comes to parts, our dealers should never have to wonder whether they can meet, if not exceed, their customers’ expectations.”
On the Move -- Warehouseperson Cindy Shackelford moves parts to the right place at the right time.
A Great Place to Learn and Grow
Delivering on that promise requires a multifaceted approach. For example, SPAO manages its own Parts Technical Support Group, a call center that fields some 700 contacts per day from dealers and distributors. It has a Warehouse Industrial Design group that applies Toyota Production System principles from the design of individual parts bins to the overall product flow of parts distribution centers. It has a Brand Protection Group that spots counterfeit parts and works with law enforcement to crack down on the sellers. And it’s even partnering with marketing on eCommerce on how SPAO can further expedite this intensively complicated business.
Oh, and there’s more. Much more.
Wearable Technology -- Warehouseperson Ruben Vasquez uses a bar code reader that helps make parts picking faster and more efficient.
Given SPAO’s breadth and depth, many team members find it a great place to begin, if not establish, their Toyota careers.
“One of the things I’m most proud of are how many people have worked here and now contribute in other key positions throughout the company,” says Swartz. “This is a great place to learn and grow. The skills and critical thinking we develop can be applied to virtually anywhere else in the Toyota organization.”
“And we also have many team members who’ve spent their entire career with us,” adds Swartz. “SPAO is so vast it’s kind of like a business within the business. You can rotate through many different positions and continue to be challenged.”
By Dan Miller