BROADCASTS.com

Last winter, when China ordered tens of millions of people back into a pandemic lockdown, executives inside the $170 billion automotive aftermarket parts industry took a deep breath.

Jeff Shepherd, CFO of aftermarket giant Advance Auto Parts, says that the possibility of another China shutdown had just not been part of Advance\u2019s procurement calculus. Still, parts \u201cin stock\u201d at Advance stores during 2022 have dropped only a few percentage points from their usual inventory level in the \u201cmid-90th\u201d percentile, according to Shepherd, who credits the anticipation of yet another China-related event as further evidence of Advance\u2019s astute procurement practices. \xa0

\u201cThe last time China hosted the Olympics, they shut the power down and they shut the factories down. So, during the Games, you can\u2019t get product out and it\u2019s not being manufactured,\u201d explains Shepherd, who notes that Advance\u2019s procurement team anticipated a China shutdown in February due to the Beijing Olympic Games.

\xa0\u201cWe started doing a lot of buying late last year and very early this year,\u201d comments Shepherd, who reports that not unlike those of its competitors, Advance\u2019s 2021 supply chain troubleshooting efforts were related mostly to bottlenecks at U.S. ports and a confounding shortage of truck drivers. \xa0

\u201cWe\u2019re not out of the woods now\u2014I will tell you that it\u2019s not perfect,\u201d remarks Shepherd, regarding the existing supply chain challenges inside the U.S. However, if Advance\u2019s \u201cin stock\u201d levels stay in line, the company may have a read on future developments in China.

Says Shepherd: \u201cI can\u2019t take credit for knowing those things, but we were indeed able to get out in front of the China shutdown, and our \u2018in stock\u2019 percentages are now nearly back to their pre-pandemic levels.\u201d\xa0\u2013Jack Sweeney