Back to Basics at CCI

admin

Holger Mohr, longtime star of Custom Chrome's European operation, made a host of changes after he took over as president of CCI's U.S. business about two years ago. He was instrumental in consolidating customer services at the company's Morgan Hill, Calif., headquarters, and he guided the restructuring of CCI's sales function.

But two of Mohr's important projects — improving the company's fill rate on dealer orders and developing a line of proprietary products — haven't fared so well. So the company's approach in these areas is being changed.

Mohr resigned Sept. 17 to return to his previous position as managing director of Custom Chrome-Europe. He'll continue to be involved in CCI's U.S. operations, he says, and may also work on developing proprietary products in Europe.

"I would have started working on proprietary products a few months ago," he says, "but maybe the company needs to fix the fill rate issues before we go into new ventures."

Frank Esposito, Mohr's replacement, says fixing fill rates and getting primary products to dealers is his No. 1 goal — not creating new products.

"Dealers need those things [primary products] tomorrow — repair and maintenance items. If I'm a dealer and I have a bike on a lift, I need parts right now. I can't wait four or five days while they get shipped across the country," he says.

Proprietary products are part of CCI's heritage and strategy moving forward, but right now they're not as important as consistently getting basic products to dealers in a timely fashion, says Esposito. "A new bagger product isn't as important for a dealer as keeping motorcycles rolling down the highway," he notes.

Focus on Fills

If you, as a dealer, need 20 items, you would like to order them from your primary distributor and receive all of them quickly, preferably the next day. If you get 18 of those items, that's a 90 percent fill rate.

But if you order only 10 of those products from Distributor A and the other 10 from Distributor B because you know the first distributor won't have them anyway, what kind of fill rate is that for Distributor A? Even if you get all 10 items, it's really only a fill rate of 50 percent because you could get only half the items that you needed from that distributor — and he lost the business on those second 10 items.

One reason dealers don't order from CCI is because they know many items are on back order or aren't being stocked. Another reason is that it takes too long to get the products shipped to the dealership. Esposito says he's targeting both problems.

In the Distributor Report Card (starting on page 48), the most frequent dealer complaint about CCI was its lack of product; CCI averaged only 5.1 out of a possible 10 points in the Product Availability category.

This focus on getting primary products to dealers quickly is a new initiative, launched in September, Esposito says. It has two thrusts: Buying the right products and balancing primary inventory among CCI's three regional warehouses.

"There's a new focus on critical timing," says Esposito. "If a dealer needs a product right away, it has to be in his local warehouse."

Buying properly is important, of course, and that means being able to get needed products from suppliers on acceptable terms. That hasn't always been the case, as a number of suppliers put CCI on a short credit leash in recent years.

Today, says Esposito, vendors are granting CCI "generally accepted commercial terms." In other words, CCI is getting credit from at least some of its suppliers, and it doesn't have to pay cash to buy product.

As we near the second anniversary of CCI's ownership under Cerberus Capital Management, the company seems to be making some progress. It'll be interesting to see how much additional progress will be made next year.

E-mail contributing editor Joe Delmont at joe@powersportsupdate.com.