NAPA Integrated Business Solutions Jett Kuntz National Director NAPA Integrated Business Solutions (IBS)

Innovative Parts Solutions

Innovative Parts Solutions How did NAPA/Genuine Parts Company get started with IBS concept over 19 years ago? Our customers came to us and asked what we could do to help them to… Manage their inventory Reduce overall transaction costs/budget Improve productivity 4

Innovative Parts Solutions NAPA IBS On-Site Inventory Management Program Customized to Fit Your Needs One location/multiple locations… On-site parts/supplies store… Inventory responsibility moves to us.. You are our only customer… One parts bill end of each month… 5

Innovative Parts Solutions 6

Innovative Parts Solutions Typical Fleet/Shop Inventory 30% Stockroom Inventory with Demand 60% Surplus and Duplicated Obsolete 10% 7

Innovative Parts Solutions OUR RESPONSIBILITIES NAPA IBS Supplies All Parts/Supplies Both NAPA and OE Also supply other needed items Tires, bulk fluids, services, safety office supplies, etc… Dedicated Parts Professionals The hours/days you need us Sourcing of Non-Stocked Products National Inventory Database Pickup, Delivery, Freight Coordinate All Paperwork/Input 8

Innovative Parts Solutions IBS - CUSTOMER BENEFITS Inventory Relief Transaction Cost Reduction Productivity Improvement Hundreds of Vendors - One Bill 9

Innovative Parts Solutions Other NAPA IBS System Benefits 240+ VMI sites available for visits/reference TAMS – Parts/Inventory Management Dedicated product representation Training – On-Site and On-Line Dozens of sample RFPs Software/Data Integration Available 10

Innovative Parts Solutions FLEET SOFTWARE INTEGRATION Fleet Management Systems Supported AssetWorks – FA/ Maximus M/M5 CCG/Faster Dossier RTA 11

Innovative Parts Solutions Jett Kuntz National Director - NAPA IBS Email: Jett_Kuntz@genpt.com Phone: 770-612-2065 Cell: 770-855-2221 12

David Head Rick Call Sonoma County, CA Santa Rosa NAPA Auto Parts Owner/Partner Fleet Director Sonoma County, CA Santa Rosa NAPA Auto Parts 13

Parts Challenges Declining Fleet Size – Reduced Parts Sales Volume Newer vehicles require higher technical skills Older heavy equipment require broader knowledge Salaries and Benefits Cost Parts mark-up no longer competitive Dead stock – Too much inventory Mandatory budget cuts

COMPETITIVE ANALYSIS Evaluate competitiveness of Parts Operations Request for Proposal (RFP) Cost Ability to Perform Inventory removal and restocking plan Expertise – References Acceptance of Contract Terms Other Factors 30 RFPs sent out 3 responses

KEY EVALUATION POINTS Competitive Pricing Assume and Manage Inventory Delivery to primary maintenance facilities Delivery to Field Service Technicians OEM Parts

EXPECTATIONS Parts would cost 3.3% more than current price Staffing and Support reduction of $220,000 Vendor Overhead $126,000 for the first year, $114,000 in subsequent years Estimated First Year Savings $100,000

Actual Savings Parts Cost average is 6.7% less than pre-contract Pricing 10% less than bid prices Filters – cost reduced by 32.4% Brake Parts - cost reduced by 23.9% Oils and Lubricants – cost reduced by 11.1% Cost of parts reduced by $64,000 Staffing and Support Reduction Staffing cost reduced by $220,000 Parts Markup Reduced From 31.2% to 11.6% Total Projected Savings - $240,000

Daily Benefits to the County Better pricing than reflected in the RFP Business partnership between County and SRAP No bidding for special parts Immediate processing of parts Parts on demand, delivered as needed Reduced employee supervision Reduced administrative and clerical time Reduced Parts Markup (31.2% to 11.6%) One Invoice per month

Higher Level Benefits Better inventory control – no dead inventory SRAP is managing Inventory and parts ordering Immediate adds and deletes from inventory Inventory obsolescence is eliminated Availability to $2M in parts within 30 minutes Overnight availability to $15M in parts from Sacramento Distribution Center Vendor can negotiate prices from OEMs and other suppliers.

Higher Level Benefits More resources for tracking and ordering parts Several key people assigned to support the account Auto Parts/Truck Parts/Equipment Parts, Aftermarket and OEM Better follow-up on parts orders Parts delivery to shop or job site TAMS Computer system in both shops County staff can check inventory at all vendor stores Invoicing at point of sale to the County No core charges

Advantages to the Supplier Stable customer with regular annual parts volume Opened up new product lines Law enforcement vehicle up-fitting parts Oil and lubricants Tires Opened up possible new markets Other cities or agencies

Lessons Learned Start-up Time is critical, Leave yourself plenty Close the parts rooms during transition period Test Bar-coding before you start Once you start, all your procedures will need to be re-evaluated Keep your Technicians involved in the planning and processes Communicate, Communicate, Communicate

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