Automotive News Canada - December 2019 - F21

FIXED OPS JOURNAL

VINTAGE

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"Even if someone is driving a 1995 Cavalier, sooner or later, they're going to buy something newer," Friedel says. "And hopefully, they'll buy a
car from us because we helped them out before."

Farm roots
Vintage Parts, owned by private equity company GenNx360, started in
1970 as a small network of John Deere farm implement dealers who
were interested in shedding old parts inventory. The company says it
earns annual sales revenue in the "mid-tens of millions of dollars" but
would not be more specific. It declined to discuss the markup it charges
on the parts it sells to dealerships.
Vintage Parts' business model is built on a simple premise: Automakers and dealerships need to keep older parts circulating to maintain
product support and keep loyal customers happy. But they don't want
to be saddled with the costs of carrying that slow-moving inventory on
their books for years. Keeping such inventory in stock also consumes
valuable storage space that could be devoted to more profitable, faster-moving parts.
That's where Vintage Parts steps in. The company buys slow-moving
parts from automakers at a discounted price compared with the inventory
value, then stores them on towering racks of shelving, CEO Hiltunen says.
"We're a data company as well as a parts company," Hiltunen says.
"We've developed our own very sophisticated data management system to manage our inventory. We have a barcode-scanning system that
uses the OEM part numbers as reference points" for tracking and picking parts.
Only dealerships authorized by automakers can buy parts from Vintage; there are no direct retail sales. The company stocks parts for eight
years - a timetable that resets every time a part is purchased. After that,
parts that don't sell well get scrapped, Hiltunen says.
Asked about competitors, Hiltunen says other companies do some
things similar to what Vintage does, but not in the same way. "We're a
very unique business," he says.

house number, aisle number, section number, shelf
number and skid spot number, plus a box number,
Locy explains.
The company's 10 part pickers each select an average of 24 parts per hour - with 99 percent accuracy
- while they also help with shipping and receiving.
Vintage Parts fulfills 800 to 1,100 orders daily, and 95
percent of them go out the same day, as long as the
order comes in before 4 p.m., Locy says.

Room to grow

Friedel: Getting
needed parts

Hiltunen says he wants Vintage Parts to establish partnerships with
more automakers and expand its international business.
The company opened a 500,000-square-foot warehouse in Germany
in 2018 and has secured a European partnership with Mercedes-Benz,
he adds.
"We want to create more of a storefront experience on the website,
with photos of the parts," Hiltunen says. "We also want to provide fitment data for the parts - create a more Amazon-like shopping experience, if you will."
Currently, dealership customers can find parts only by searching for
an automaker part number. Hiltunen envisions one day giving customers the ability to order parts by providing the year, make and model of a
vehicle.
"We have to move forward with technology," he says. "That's exactly
where we're headed next." 

Efficiency experts
Touring Vintage Parts warehouses 21 and 22, which stand across from
the company's headquarters building, is like visiting the immense attic
of a large manufacturer - albeit a high-tech, well-organized, climate-controlled attic.
Separated by an area for shipping and receiving, the two warehouses
feature a total of 175,000 square feet of space. Wire-guided forklifts - no
manual driving required - as well as small motorized carts called stock
chasers purr, whir and beep down 30 aisles, each one roughly 300 feet
long and bounded on each side by 40-foot-tall shelving racks. These
racks hold 66,000 "skid spots" - niches that hold pallets brimming with
thousands of parts.
The array of parts is overwhelming. Larger items include semitractor
cabs and a cab-and-bed assembly for a Ford F-150 pickup. Other parts
range from engines, transmissions, steering wheels and hoods, to mufflers, dashboards, door panels and fenders, to speedometers, visors,
floor mats, specialized hardware and cupholders.
"It amazes me what we ship out of here every day," says Dawn Locy,
Vintage Parts' operations manager and a 40-year employee.
The parts aren't organized by manufacturer or type; it would be almost impossible to do that logistically, Locy says. Instead, the company
relies on its customized part-picking software. When an order is submitted, the system generates a pick ticket that includes the part's ware-

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