eAfterMarket



MechanicNet: "Telematics Can Reduce Inventory Levels"



Telematics (location-based communications)will have a profound impact on what, when
and where vehicle service is performed in the coming years.



With nearly 20 million telematically equipped vehicles on U.S. roads by 2005 (Lang
Marketing estimate), L-commerce (location-based commerce) covers an enormous range
of services and benefits from navigation assistance and entertainment features to
on-board monitoring of vehicle systems and even remote diagnosis of vehicle
performance.



eA has pointed out in numerous articles the aftermarket impact of Telematics and
how it will revolutionize the vehicle service industry. In a comprehensive White
Paper, MechanicNet sets forth the opportunities Telematics offers the aftermarket
and how market participants should recognize telematics as a means of bringing much
needed efficiencies to the aftermarket supply chain.



As the white paper points out, "the slow adoption and severe fragmentation of
information technology in the automotive aftermarket stand as the biggest barriers
to Telematics efficiencies." To correct this situation, MechanicNet (and its
alliance partners) has been a leader in deploying Internet technologies to service
market installers.



Through remote vehicle diagnosis and the ability to make appointments for service
with vehicle operators while thay are on the road, Telematics will make it possible
to preposition parts necessary for specific repairs at the place where those
repairs will be performed, prior to the arrival of the vehicle (see the April 15th
issue of eAftermarket)



By reducing uncertainty (where and what service wil be performed) and urgency
(rushing parts to the repair location after the vehicle has arrived), Telematics
provides the potential for "proactive management rather than reactive repair."



All of this can lead, as MechanicNet states in its White Paper, to a significant
reduction in supply chain inventory levels. Steven Liao, MechanicNet's President,
estimates, "$20 billion in trapped aftermarket inventory can be freed-up through
the application of telematics as a trigger for a synchronized supply chain."



"Telematics should be deployed as a break-through industry solution to massive
supply chain inefficiencies," the White Paper states. "The most economically
compelling use of Telematics technologies, therefore, is not by sending 
information into but out from the car. Telematics has the potential to completely
change the economics of the automotive aftermarket by increasing operational
efficiencies."



The White Paper continues by stating "the search by wireless and Telematics
companies for sustainable profits must not be lost in the 'Killer App' paradigms
that drove personal computer development. to overcome the barriers that have
stalled wireless application adoption inthe U.S., Telematics technology must be
deployed with an aim toward substantially impacting an inventory supply chain ripe
for innovation."



"Through supply chain savings and value creation power of liberated capital,
automotive industry stakeholders have the incentive to subsidize adoption of
Telematics," MechanicNet's White Paper
concludes.