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By Dorman Products
Before selling a vehicle, make sure to remove personal data from the infotainment system
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By Counterman
As an industry, the aftermarket is unique and fortunate to have a robust, well-documented set of industry-specific data standards. If you’ve been in the automotive aftermarket since breakfast, you know there are data requirements about the products you sell and the vehicles they fit that are different from anything you’ve seen in any other hard goods industry. Year, Make, Model, Aspiration of the Engine or the Bed Length of your pick-up truck are all critical data to selecting the correct automotive replacement part of one type or another.
You can imagine that without standardized reference data and widely agreed-upon data formats, there would be chaos, and little use of digital automation to exchange updates in catalog fitment files. Yet, that was the case in the aftermarket until late in the 20th Century. ACES© (the Aftermarket Catalog Exchange Standard) is over 25 years old and continues to evolve and expand in response to the growing industry requirements.
ACES© is completely unique in the world of technical standards. It is not derived or maintained by any private commercial entity such as Red Hat or Microsoft. And it is not governed by a pseudo-government body such as the International Standards Organization (ISO) or the United Nations. The technical design, the supporting reference data, the administration, governance, and worldwide marketing of ACES© is all conducted under the watchful eye of the Auto Care Association and the Technology Standards Committee.
Over the years, hundreds of volunteers have served on the committee and contributed their expertise to what is ACES© today. Nothing about developing a standard was easy. Each company represented around the table would like for the final solution to reflect their business choices and minimize the disruption to their legacy technology. Like any industry standard, ACES© is “the best bad idea” that all the participants could swallow at the time. If the solution is slightly disagreeable to everyone, it’s probably the right thing to do.
In recent years, the Auto Care Association has invested tremendous resources in taking ACES© beyond its original scope and function. Because trading partner relationships are international, ACES© added vehicle reference data for Canada, Mexico, Brazil, and many other countries in Latin America. Because component manufacturers don’t limit their product assortments to light-duty vehicles only, medium- and heavy-duty vehicles, off-road, farm and agriculture, lawn and garden and many types of powersports vehicle were added. The charge was, “if a spark plug or diesel fuel injector fit it … there need to be ACES© vehicle codes to describe the application.” Recognizing that the needs of HD trucks are unique and important to the fleets and businesses that operate them, a major effort was undertaken to incorporate the needs of the Heavy-Duty segment of the aftermarket in the standards.
However, there are challenges and issues with the current industry data standards that the Tech Standards Committee is actively addressing under the volunteer leadership of Marc Pappas, CIO of Federated Auto Parts, and Luke Smith, IT Director at AutoPartSource. Briefly, these top-three challenges are data quality and accuracy, data latency or timeliness, and adoption (always more).
Accuracy and consistency in catalog data files are essential to providing a good customer experience and maximizing sales. Many brands regard their content as a competitive advantage and an opportunity to differentiate their products. But Eric Lough, VP of Customer Connectivity at All Star Auto Parts, says, “Accurate ACES© files are table stakes and the minimum requirement for a brand. There are plenty of opportunities to express your unique value proposition in product-specific attributes and description fields.”
Auto Care has recently added a Catalog Data Assessment tool to the VIP portal. This offers any registered user a way to validate the format of their ACES© data files and ensure there are no illogical records that overlap or duplicate another. With the help of the Auto Care Catalog Assessment tool, it is simple to send your trading partners the best representation of your brand the first time. All the ACES© rules and Best Practices are available online. It is an open-book exam that every user should “Ace” (see what I did there). ACES© training documentation is available at academy.autocare.org and in-person classes are offered through the
link hidden, please login to view. Latency of catalog data refers to the time (and lost sales) between when a new product is engineered, manufactured, and first added to a catalog application file, and when resellers, websites and electronic catalog providers are able to process sales for the part. It is common for the delay between a new vehicle addition to the standard and when it can be sold to be 3-4 months or more.
The current method of updating the vehicle reference tables is by way of a complete refresh where 98% of the records are unchanged from the previous version. A similar practice is followed when the complete catalog file is distributed by brands to trading partners. Exchanging “Net Change” files did not catch on previously because the technology to accurately manage changes was not widespread. But, the Sandpiper project, announced last year, holds the promise of making new data available through a web service in near real-time. If Auto Care makes new vehicle data available to users through an online service, catalog updates can be managed in much smaller parcels and distributed through the chain faster. The potential to make additional sales and reduce unproductive inventory is measured in the billions of dollars industrywide.
The third major challenge is as old as the standards. Adoption of a new method to share data requires the confidence and vision to recognize the benefits and manage the challenges. A major program group told me that their rubber products supplier had yet to send any belt or hose applications for any non-automotive vehicles or equipment – even though the vehicles have been in the ACES© tables for two years. For years, major retailers and eCat providers said, we’ll never get rid of paper catalogs and fitment guides until ALL the applications are in the ACES© tables. With contributions by Power Systems Research, Experian and others, the Off Highway and Equipment tables are largely complete. The common reason given for why a vendor doesn’t send the catalog data now is that legacy data needs to be converted and resources need to be diverted from other projects.
It occurs to me that the first brand to make Off Highway and Equipment an ACES© priority will own the market segment. Retailers and other customers want to use their integrated electronic catalog for all the parts available from their suppliers – not just light-duty cars and trucks. Waiting “for the standards to be finished” is not a strategy for success. Competitors looking for an opportunity to grab marketshare would be wise to look at all the products in their Distribution Center and ask, “what more could we sell if these were included in our ACES© files”?
To remain relevant and valuable, the industry standards will continue to evolve and grow. They will never be finished. Since adoption is a multi-year proposition, time is of the essence and further delay is costly.
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By Counterman
This article, contributed by Tom Cook, is courtesy of link hidden, please login to view
All companies engaged in the global supply chain seek to lower the “landed costs” on their goods in imports and exports sales, purchasing and operations.
While there are numerous components that make up “landed costs,” duties, taxes and tariffs are a huge factor and can often be a detriment to global trade.
Duties, taxes and tariffs are costs borne by the importer as the goods enter a country. These fees are assessed by the country’s local customs authority. In the USA, this is the U.S. Bureau of Customs Border and Protection (CBP).
These fees are determined by what the product is and where it is from. The “what” is known as the HTS (Harmonized Tariff Schedule) and the “where” is the actual origin country of the product.
While some of the guidelines are standardized from one country to another, we must understand that the customs rules and their interoperation often vary differently from one country to another. Sometimes the differences are slight and in other countries the differences are huge.
The importer of record (IOR) has the primary responsibility to determine the correct HTS and origin upon entry of the goods for customs clearance in the country of import.
Most importers utilize the services of freight forwarders, customhouse brokers and/or 3PL’s to provide these clearance services, as well as rely on their expertise to accomplish the clearance process in a successful and compliant manner.
Importers may also obtain the assistance of these service providers in determining the correct HTS classification and
the origin.
Importers are legally responsible to exercise:
• Due Diligence
• Reasonable Care
• Supervision & Control
These standards are the responsibility of the importer of record (IOR). If the IOR outsources the responsibility to a customs broker, under the “supervision & control” standard, the IOR is still responsible for supervising and controlling for the statements and information provided by this third-party on their behalf.
This standard requires the importer to have a working knowledge of the import regulations and be able to properly supervise their outsourced provider.
Customs recognizes that an importer may need guidance in the clearance process. This may be received from CBP, a qualified consultant, a customs attorney or a practitioner that has expertise in customs regulations.
It is critical to understand the steps in managing duties, taxes and tariffs. The first is to understand how the import regulations apply, followed by learning what measures can be taken to mitigate the risk and cost associated with duties, taxes and tariffs. If the origin and the classification are the controlling factors, it is important to understand that this is where the answers lie to mitigation.
For example, Section 301 tariffs on certain goods exported from China into the U.S. may add as much as a 25% surcharge to the import landed cost. This resulted in many companies seeking out alternative sourcing options to avoid this surcharge.
In addressing alternative sourcing options, nearshoring, reshoring and friend shoring – countries such as but not limited to Vietnam, S. Korea, Taiwan, Malaysia – all presented viable options.
In some situations, the acquisition cost may have been higher, but when calculating the landed cost, with the 25% duty eliminated, the comparison demonstrated a viable alternative to the importer.
Companies involved in aftermarket sales, where margins are tight, can benefit from this type of analysis and mitigation strategy.
Another strategy involves the Harmonized Tariff Schedule, or what the product is, from CBP’s perspective.
First, we want to make sure we are utilizing the proper HTS number. It can be possible that the correct HTS number, when changed, will offer a lower duty rate.
Secondly, what we refer to as “Tariff Engineering” is a legitimate manipulation of a product’s design or materials that impacts its classification and potentially lowers the duty rate.
The choice of materials, the functionality of the product, product specifications or qualities all impact how a product is classified.
For example, changing the make-up of the materials utilized in fabrics, such as the mix of cotton, rayon, nylon, etc. will change the classification of a product. Features such as changing the product to be waterproof and adding other qualities may also change the tariff classification and impact the duty rate.
Another example may be how the product is designed; for example, for personal utilization or for commercial application, may have an impact.
How parts and equipment are assembled and utilized can also have an impact on the classification as well as the origin.
The amount of “value-add” in the manufacturing or assembly process can also impact how CBP will view the origin and/or the HTS, therefore directly impacting the duty rates.
Tariff Engineering requires R&D, engineering, and technical support, as well as guidance from trade professionals that can assist in interpreting the import regulations and research prior CBP rulings.
CBP has a great resource called CROSS which is a searchable database of CBP rulings that can be retrieved based on simple or complex search characteristics using keywords and Boolean operators. CROSS has the added functionality of cross-referencing rulings from the initial search result set with their modified, revoked or referenced counterparts.
Rulings collections are separated into Headquarters and New York and span the years 1989 to present. Collections can be searched individually or collectively.
CROSS can be an excellent resource in managing the impact of duties and tariffs on
landed costs.
Duties, taxes and tariffs often emanate from political and economic positions from government offices and agencies. We witnessed this when President Trump put forward the 232 and 301 Tariffs in his first year in office.
China then secured retaliatory duties. We have seen these similar actions in the EU, Australia, Mexico and Canada.
Personnel in the aftermarket engaged in global supply chain purchasing, sales and operations need to pay attention to the political and economic situations in the countries they do business in, as regulations impacting duties and tariffs change frequently with both positive and negative consequences.
Additionally, trade organizations’ lobbying efforts should be followed with the Executive Branch and Congress. These efforts seek to keep open free trade concepts and minimize the utilization of duties and tariffs as political and economic weapons in global affairs.
Studies have been accomplished that clearly demonstrate the negative impact of tariffs on manufacturing, distribution, and trade costs in the global supply chain.
While many tariffs are designed to protect industries or certain markets, they generally wreak havoc in global trade and have negative impacts.
The automobile industry, its suppliers and ancillary industries such as the aftermarket are significantly impacted by duties, taxes and tariffs.
In controlling “landed costs,” duty and tariff mitigation as outlined above are all good strategies, but there are other options that also should be considered:
• Utilization of Foreign Trade Zones
• Consolidating Transportation Providers and Carriers
• Running annual Freight RFP’s
• Choice of INCO Terms
• Alternative Sourcing
• Free Trade Agreements
• Location and methodology in warehousing, fulfillment, and distribution
• Utilization of Technology
• Demand Planning Systems
In summary, developing strategies in tariff mitigation is a viable solution to duty and tariff management and ultimately lowering landed costs and enhancing your company’s competitiveness in both import and export purchasing
and sales.
Thomas Cook is Managing Director of Blue Tiger International, a global consultancy advising on supply chain management, trade compliance, purchasing, trade and disruption management, global business and logistics. For more information, go to www.bluetigerintl.com. Tom can be reached directly at [email protected].
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