The 1990s was an era that changed the auto recycling industry forever. Over the course of that decade, the industry transformed from an amalgamation of primarily small, independent businesses to a more formal, corporate model. Large, publicly-held corporations were buying whatever family-owned yards were willing to sell, and many of the remaining independent yards came together for the first time to form buying partnerships. At the same time, the industry experienced an explosion of technology, and computerization became essential for yards to be competitive.
Auto recyclers who wanted to stay in the industry realized that to survive and thrive would require some significant changes in their business model. Brian Perlenfein, Vice President of B&R Auto Wrecking, an ARA Gold Seal recycler in Corvallis, OR, remembers the ‘90s vividly. He had joined his family’s business in 1995 and graduated from college in 1999. Brian, co-owner of the business with his parents Rick and Konnie, says the family saw the changes in the industry as an opportunity.
“At the time, we knew we had to get bigger, expand the number of employees so we could organize with district managers, buy more inventory and sell more parts,” he says. “Our goal was to keep the good people we had in our organization and grow into better markets.”
History of Planned Growth
Rick and Konnie Perlenfein had purchased the Corvallis yard in 1980, a medium-sized yard that had been in operation since 1960. Corvallis is situated in mid-west Oregon, with easy access to I-5, a main north-south route. With Rick’s background in the collision and body shop industry, he brought a wealth of knowledge to the business, and ideas for growing it.
The original yard was on 10 acres, mainly a full-service operation with a small self-serve component and two delivery trucks. As the husband-wife duo expanded the delivery routes, they saw the opportunity for expansion and purchased yards in Albany, Eugene and Springfield (a Eugene suburb) during the 1990s.
That expansion coincided with Brian’s entry into the family business and signaled the start of a strategic growth plan that has continued for 20 years. The B&R network extends across western and central Oregon, into western Washington, into Nevada where B&R owns three yards, and now into northern California where B&R acquired yard number 16 in June 2017. Yards range from a few acres to 50 at the Eugene operation.
Across all 16 locations, B&R employs nearly 400 people and stocks an incredible 2 million parts. Collectively, the 16 locations dismantle more than 20,000 vehicles a year and create 2,000 invoices a day – more than half a million invoices a year. In addition to the recycling side of the business, B&R has towing contracts with the state of Oregon, as well as a few cities and counties near the Corvallis, Eugene and Springfield locations.
Applying Best Practices
Although owning an automotive recycling operation of this size and scale isn’t every ARA member’s business plan, the best practices B&R has adopted along its 20-year journey are applicable to recycling operations of virtually any size, Perlenfein believes. “Not every yard we bought has been successful right away,” he stresses, “but over time, they all have become profitable.”
The process begins with company leadership scrutinizing five major strategic areas with all new acquisitions: inventory system, delivery system, personnel, management training and existing company policies. To manage this, the Perlenfeins, Vice-President of North American Operations Jeff Helget, and the appropriate district manager along with managers from each area of operations are involved in the evaluation of procedures and policies. Early in the company’s growth, the Perlenfeins began developing and documenting standards, which are implemented at all new acquisitions, bringing consistency that is critical to success and ensures quality across the company.
These standards are written documentation to ensure that all locations are on the same page. For instance, all engines are compression-tested in the same manner, all locations take the same set of pictures for each acquisition, ship parts in standard-sized and -shaped boxes and generate invoices the same way, and human resources policies are totally documented.
Oregon is widely known as a state with a strong environmental commitment. B&R has taken this seriously for decades. “We’ve been environmental-conscious forever,” Perlenfein says. “My dad and I watch [environmental policies] closely because we believe it’s easier to stay up on it than to remediate it.” The credit for the company’s excellent environmental record – never a violation, he says, goes to the employees. “They know what we need to do and keep us in good standing.”
All B&R polices and procedures are updated and expanded as needed. Over the years, the family has found that standardization breeds efficiency, and efficiency breeds profitability.
Efficiency = Profits
Standardization has led to the development of inventory and logistics systems to maximize efficiency in those critical areas. “We have a 70 percent in-stock ratio, and we can get any part to a customer within 48 hours,” Perlenfein says.
To maintain that level of customer service, B&R has a team of experienced acquisition specialists under direction of Josh Vincent, Acquisitions Manager. The team buys retail and at auctions based on internal inventory and sales data. B&R also maintains an inbound call center to handle vehicle buys from private citizens.
The call center also handles parts sales, with smaller B&R locations routing calls to larger locations as needed, to ensure the best-qualified salesperson speaks with each customer. “That system means the customer gets the best available agent at the time, regardless of where the part is located,” Perlenfein explains. “The part could be from any of our 16 locations.” Interestingly, the team includes salespeople who work from their homes, an arrangement the company is willing to accommodate because of the level of industry knowledge these home-based individuals possess.
With Brian joining the company in the midst of the technology explosion in the industry, it’s not surprising that technology has been a major driver in the company’s success. To his credit, Rick embraced the technology revolution and saw its potential early on.
B&R was one of the first recyclers to create a website (www.autowrecking.com) and was an early adopter of posting parts pictures online. “Pictures allow us to tell our customers on the phone to go to our website and type in a stock number to see pictures,” Perlenfein explains. “As soon as we started doing that, the customer gained confidence in us; it helped reduce returns and pictures allowed the customer to help explain exactly what they were looking for.”
In 2010, B&R served as the pilot yard to test the Hollander e-Link Internet Motors listing tool, which the yard continues to use today. B&R started by listing 200,000 parts and quickly found themselves the number one seller on the Internet marketplace. Selling hundreds of parts a month directly to consumer, strictly through e-commerce was a different type of sale than anything B&R had experienced in its 30-year history. The company adapted rapidly, dedicating sales reps to e-commerce and developing order processing, invoicing and shipping processes specific to their now-worldwide market.
Through whatever channel a part eventually sells, B&R electronically tracks it from the vehicle’s arrival and dismantling at a B&R location to its arrival in the customer’s hands. Specific processes ensure that parts are correctly photographed, inventoried, cleaned, inspected and shipped according to procedure.
Perlenfein’s early experience working in every area of the business made an indelible impression on him about the value of B&R’s employees and their daily contributions to the company’s success. “We believe in hiring the best and in hiring for the long term,” he notes. The company offers ongoing training, competitive pay and a solid benefits package that includes profit-sharing and health care. B&R has a detailed organizational structure to manage its large workforce and workflow efficiently. The management team, dispersed across three states, stays connected through technology and cell phones.
“We have a good management team,” Perlenfein adds. “A big part of their job is to keep employees engaged and involved. Employees are usually the ones with the good ideas when it comes to improving processes or adopting new tools.”
B&R celebrates the role of its employees in the company’s success with an annual awards banquet. A company-wide employee survey determines which employees receive performance-related awards that are presented. In 2017, B&R recognized 41 employees with awards such as Manager of the Year, Salesperson of the Year and Up & Comer of the Year.
Perlenfein believes that strategic growth, policies and procedures and technology are all essentials to success in automotive recycling today. But there is no doubt in his mind that it is the employees that keep B&R at the top of the heap. “Our secret to success?” he says. “It’s our people.” n
Lynn Novelli is a freelance writer based in Ohio and a longtime contributor.