September/October 2012
Pull-A-Part has brought a new level of sophistication and service to the do-it-yourself used auto parts store, and it’s poised to expand this innovative business model around the country.
By Kent Kiser
The road to Pull-A-Part’s self-service used auto parts yard in the Atlanta suburb of Lithonia, Ga., winds through a wooded industrial park and ends at the facility’s clean, spacious parking lot. A landscaped, 8-foot-tall steel fence surrounds the yard, completely shielding its interior from view. The Pull-A-Part logo on the concrete-block and red-aluminum building is the only clue to the nature of the business. Even after you enter the building, tour the immaculate yard, and follow a car’s journey through Pull-A-Part’s process, it’s clear: This company is far removed from the junkyards of yore. Pull-A-Part’s principals see a bright future for this re-engineered model of the old used car parts business, and they’re ready to make it happen. Since its founding in 1997, the company has expanded from a single facility in Georgia to 23 operations in 10 states, and its aggressive growth plans are likely to increase that number significantly.
Shifting From Manufacturing to Sales
Pull-A-Part began with the acquisition of Allen City Auto Parts, which scrap industry veterans Marty Kogon, Alan Cohen, and Mark Cohen of Central Metals (Atlanta) bought in 1997 as a feeder yard for their company’s shredder. After clearing and remediating the Allen City site, Central Metals reopened it as a self-service used car parts operation under the Pull-A-Part name. The principals believed there would be “a symbiotic relationship between the parts and scrap yards,” Mark says. “That wasn’t the case because the yard didn’t generate nearly enough scrap to feed the shredder.”
Soon after Pull-A-Part launched, Recycling Industries, a publicly traded scrap industry consolidator, offered to purchase Central Metals’ scrapyard. Kogon and the Cohens decided to sell, though they continued as executives under the new owner. They retained ownership of the Pull-A-Part yard, however, and they opened a second parts yard in the Atlanta area in 1998. In early 1999, Recycling Industries declared bankruptcy, shuttering the former Central Metals scrap operations. After decades in scrap processing, Kogon and the Cohens had to shift their thinking from manufacturing scrap to selling car parts—the company’s primary mission. “The car parts business is not the scrap business,” Alan emphasizes. “It’s not an adjunct to the scrap business; it’s a business in its own right. It’s a retail business, and you need to treat it as a retail business.” As Mark puts it, “It’s not something you do with your left hand while you’re doing something else with your right. We looked around the country and thought we could do many aspects [of it] in a better way.”
The principals dedicated themselves to redefining the self-service car parts business and growing the company. In its first five years, Pull-A-Part expanded to five locations. In the subsequent five years, it added 18 operations, for a total of 23 stores, establishing it as the third-largest player in the DIY auto parts business in North America, says Steve Levetan, senior vice president.
Success With Four S’s
Pull-A-Part has succeeded thanks to its systems, service, selection, and savings, says Ross Kogon, Marty Kogon’s son and Pull-A-Part’s president, who has a background in strategy and systems planning and diagnosis. By systems, he means everything from the consistent look and layout of the company’s stores to its employee training to, especially, its information technology. “We believe in leveraging systems to their max,” he says. “That allows us to be scalable, plan for growth, handle changes, and have everything exactly the way we want it.” Pull-A-Part’s systems are an outgrowth of work the principals did at Central Metals, when they created their own scale software and other operating systems, thanks largely to Marty Kogon’s and Alan Cohen’s stints as IBM systems engineers and Mark Cohen’s expertise in operations.
Information technology is the linchpin of Pull-A-Part’s operations and its primary advantage over its competitors, the executive team says. The firm has spent millions, Alan says, developing proprietary IT systems that help it monitor the performance of its stores and offer customers a searchable database of its car inventory they can access through touch-screen computers at each location or the company website. “We’ve set the bar and the standard on the use of IT within the industry,” Mark says, and the company continues to reinvest in and refine its systems.
The best way to understand the other three S’s—service, selection, and savings—is to visit one of Pull-A-Part’s stores. The company’s idea of customer service begins with providing a clean, organized, and aesthetically pleasing operation. “We’re not a junkyard,” says Richard Holloman, operations director. “We always like to say you’ll get the ‘wow’ factor.” Mark agrees, adding, “Our facilities are clean, organized, and well-stocked. The customers aren’t out in the yard fighting snakes and mosquitoes and weeds. We pride ourselves on being a comfortable place to shop.”
Inside the Pull-A-Part building, signs hanging from the ceiling outline the company’s three-step process: Step 1—Find a Car; Step 2—Pay and Enter Yard; Step 3—Buy the Part. “Everything is designed for simplicity and ease of use,” Levetan says. To find a car, customers stop at the customer service desk, where they can use touch-screen computers to search the site’s inventory or ask a Pull-A-Part employee for assistance. Notably, the computer can check inventory across all Pull-A-Part yards and can provide interchange information, identifying other cars that contain the same part as the customer’s original model. Customers can print out their search results, which note the make, model, year, and row number of the desired car or cars as well as when each was placed on the lot. “Our goal is to create the ultimate experience for the customer,” Ross says. “Our system allows customers to get exactly what they want, when they need it, at a price they like.”
At Step 2 in the Pull-A-Part process, customers use another computer to electronically sign an injury waiver, and they must submit their tools to a search and allow the company to mark any parts they are bringing with them to prevent confusion at checkout. Though customers aren’t allowed to use torches, jacks, or power tools on site, Pull-A-Part provides basic equipment such as hoists and engine pullers to help them.
When customers are ready to enter the Pull-A-Part yard, the third S—selection—becomes evident. At the Lithonia facility, Ross steps onto the clean gravel and gestures at the 20-acre yard. “This is my retail showroom,” he says. Straight, tidy rows of cars—roughly 2,000 of them—extend as far as the eye can see. A map orients customers to the yard layout, which is divided into four sections: Dodge/Chrysler, Ford, GM, and imports. Many customers make use of the company’s free wheelbarrows—“shopping carts,” as Steve calls them—to transport the parts they pick.
After spending time in the yard searching for or removing parts, customers can clean up at a wash basin near the exit before checking out. This is where they encounter the fourth S—savings. Pull-A-Part prides itself on helping customers save money, offering what it calls a unique flat-price system in which it charges one price for a part, regardless of the vehicle’s make, model, or year. That means an alternator for a Jaguar costs the same as one for a Kia.
KISS—Keeping It Simple and Sustainable
Beyond the four S’s above, Pull-A-Part has built its business on three additional S’s: simplicity, staff, and sustainability. “It’s easy to make businesses complicated,” Ross says. “We’re big proponents of the KISS principle. [Keep It Simple, Stupid.] Our test for everything boils down to, is it simple? Is it straightforward? Does it work?” The company’s push for simplicity is evident in everything from the three-step process at its stores to its plant layouts to its flat-price system.
Regarding staff, Pull-A-Part’s executive team can’t say enough about the importance of their companywide team. “What lets me sleep at night is knowing we have competent people watching the shop,” Mark says. The key, Alan notes, is hiring good people and treating them right by providing the necessary training, giving them responsibility, and rewarding them properly.
The company requires prospective store managers to undergo six to eight weeks of training—which includes learning every job in the facility—before they can manage a yard. “We spend a lot of time and effort training new managers as well as developing existing managers,” Richard Holloman says. Pull-A-Part also gives a copy of The One Minute Manager to every management trainee because, Ross says, “it’s the best book on management to give to somebody to make sure they’ve got the basic building blocks.”
Pull-A-Part offers “competitive” pay and benefits, including the potential for employees to earn bonuses based on the performance of their respective stores. “Everybody has the potential to earn bonus money—everybody,” says Joe Bistes, vice president of business development. Employees also have advancement opportunities thanks to the company’s philosophy of promoting from within. “We’ve had cashiers who have become assistant managers and assistant managers who have moved up to the store manager’s role,” Richard says, adding that “all of our regional managers were store managers.”
Pull-A-Part strives to create an environment that allows its employees to succeed, its executive team says. Frequent communication and face-to-face meetings at company headquarters are part of that equation, with regional managers meeting monthly, store and regional managers meeting quarterly, and assistant managers meeting annually. “We bring people in to meet often because it builds a good culture,” Ross says. The company also encourages its employees to interact with each other to share ideas and solve common problems. “Everybody’s helping each other out, pulling together,” Joe says. “There’s a commonality of goal and vision.” That communication philosophy also is evident in the open-door policy at Pull-A-Part’s corporate office. “Anyone can talk to anyone in this company at any time,” Richard says. “The cashier in the Cleveland store could call me today and talk with me—and that goes from the owners on down.”
Perhaps most important, Pull-A-Part gives its staff members the freedom to do their jobs. “My grandfather used to say, ‘Your job as the boss is to kick the rocks out of the way of your employees’ feet,’” Ross says. “To me, that means you give them the right training, the right tools, the right support, and the right authority. You treat people fairly, and you build a culture that creates loyalty and good communication.” That freedom comes with potential consequences, of course. Pull-A-Part’s owners “want performance, they challenge you, and they don’t want excuses,” Joe says, “but it’s like a family. The owners really make you want to perform, and you don’t want to let them down.”
The final S—sustainability—is evident in the extensive environmental control measures at every Pull-A-Part yard. From each car that enters the facility, workers remove fluids, mercury switches, lead-acid batteries, lead wheel weights, and air-conditioning gases. The fluid-storage tanks are under cover and surrounded by concrete containment walls. Every yard has a stormwater management system that collects rainwater and holds it in a retention pond. The company responsibly disposes of any soiled gravel in the yard, replacing it with clean gravel. When a car is finally scrapped, the company loads the scrap material into roll-off containers, which it covers with rolling metal covers to prevent stormwater exposure. “We’re stewards of the environment,” Mark says. “I challenge you to visit any of our yards and find anything that’s not above the standard.”
The company goes to such efforts due, in part, to its commitment to environmental protection, but also in part to its desire to be a good corporate citizen in the communities in which it operates. “From the start of our scrap company in 1912, we’ve believed in community responsibility,” Alan says. In addition to supporting local sports teams and providing cars to fire departments for emergency-rescue training, the company sponsors local events such as this year’s “A Day in the Community” celebration in Augusta, Ga., and participates in the “Blessings in a Backpack” program in Louisville, Ky., which provides food-filled backpacks each weekend to elementary school students on the federal free and reduced-price meal program. It even helped sponsor a poetry slam for students in Birmingham, Ala., Steve says.
For these and other efforts, Pull-A-Part has received numerous local, state, and national awards. In the environmental arena, the company earned the Recycling Award from Conserve Georgia and the Sustainability Award from the Partnership for a Sustainable Georgia in 2009, five Environmental Awards in 2007 from the Tennessee Chamber of Commerce, first-place recognition in the waste reduction category of the Keep Georgia Beautiful Awards, an Award of Excellence from Keep Tennessee Beautiful in 2006, and the 2004 Environmental Award from the Georgia chapter of the Air & Waste Management Association. Pull-A-Part’s environmental bona fides also include participating in the federal government’s National Partnership for Environmental Priorities program, in which it received an Achievement Award in 2008 for recycling mercury switches. In addition, the company is the only gold-level recycling company in the Georgia Sustainability Program, Steve says, and it was the only recycling company to participate in the U.S. Environmental Protection Agency’s performance-track program (since discontinued).
What do those recognitions mean to Pull-A-Part’s leaders? “They signify to us and to our people that we walk our walk and talk our talk,” Ross says. “They confirm that our company really does live its values.” As Steve adds, the awards “affirm the culture we’ve established in this company, from the top down. Yes, we’re a for-profit business, but we do that by doing good things. It’s not just about the bottom line.”
Thinking Generationally
Though Pull-A-Part’s leaders are proud of their business model, they view it as a work in progress. “We’re pretty darn good right now, but we constantly go through self-evaluation to be even better,” Joe says. “There are infinite ways we think we can grow and improve this business, and that’s the path we’re on.” One way the company improves is by soliciting suggestions from its employees. “We really listen to our people,” Richard says. “We’ll test any good idea to see how it works. If it works, we’ll test it at another yard. If it works there, we’ll roll it out companywide. We’re always open to what we can do better, and we look for changes that will make us unique in the industry.”
Part of Pull-A-Part’s improvement goal is finding ways to reuse or recycle more of each car. “It’s a continual process of looking at the highest and best use for all the component parts of every car,” Ross says. The company already is doing better than average, Steve says: A study by one of its shredding customers found that its cars generate 11 percent less fluff per car than vehicles from other car dismantlers. The company isn’t content to stop there, however. “Everything is on the table,” Steve says. “We’re going to be at the forefront of anything smart that happens in this industry.”
Pull-A-Part is ready to resume its aggressive growth, which it halted following the 2008 economic downturn. The company recently purchased a building next to its headquarters as a new home for its growing operations and expansion efforts. Pull-A-Part’s senior management team designed the company’s model and systems to be “infinitely scalable”—to expand with minimal challenges and growth pains. “We have a formula that gives us all the pieces we can roll out anywhere,” Ross explains. In addition to considering more store locations in the 10 states where it currently operates, the company plans to broaden its footprint through greenfield development, brownfield renovations, acquisitions, and partnerships. “We’re open to anything that makes sense,” Ross says.
Just how large does Pull-A-Part intend to grow? Without providing specifics, Alan says, “We know where we want to be in five years, and that’s significantly better and larger than where we are now.” Pull-A-Part’s philosophy is to “always have a management strategy that projects growth for twice your current size.” That philosophy is just one reflection of the long-term view Pull-A-Part’s principals take regarding the company’s future. “We think generationally,” Ross says. “We’re in this for the long haul. We’re building this company for my grandchildren.” That perspective gives the company the right focus, he says, and it allows it to “make the right type of long-term investments in our people, the right type of thinking about our operations, and the right kind of investments in our systems—and we continually see that approach paying off.”
Kent Kiser is publisher of Scrap.
Pull-A-Part has brought a new level of sophistication and service to the do-it-yourself used auto parts store, and it’s poised to expand this innovative business model around the country.