CSF explains why it keeps stock in-house

In part two of PMF’s interview with Sanjiv Shah of Car Spares Factors, the co-owner reveals why stock is controlled in-house.

As I mentioned in part one, I was paying a visit to CSF’s headquarters in Southgate. Here, it has a 12,000sqft warehouse, which Sanj is looking to add a mezzanine too, by the way, as the motor factor looks to eke out every last inch of space available!

Products are then transported to their respective destination – either direct via warehouse or another CSF branch – with the aim of delivering the order to its final destination within the hour if direct or, at the latest, same-day if diverted from the warehouse to branch.

The warehouse facility has allowed CSF to keep all of its stock in-house, rather than relying on a third-party, which one could argue is tying up its cash in stock. Sanj, however, believes in-house stock is a worthwhile investment, increases margin and enables the factor to have greater control over its outgoings.

The biggest benefit of this in-house stock strategy, though, Sanj claimed, is that garage customers are not having to wait for a prolonged period of time for a delivery: “When a customer rings for a heat resistor on a Nissan, we’ve got it on a shelf; if they require an air con condenser on a Hyundai, we’ve got it on the shelf. These can be packaged up and delivered within the hour – that’s one of our key service deliverables.

“If we can get a part delivered within the hour, generally, the customer doesn’t mind paying that little bit extra for the convenience.”

This change in strategy also meant an alteration in terms of how CSF route its deliveries; while CSF can service orders with fewer drivers than it has on its books, Sanj reported that the customer service would drop as a result.

He explained: “At every depot, we have one or two extra drivers. One or two drivers are always kept local, so garages within a mile or two-radius of each depot are receiving their orders within 10-15 minutes, while the rest are tasked with deliveries further out. The advantage of that is our local customers have become very loyal – they know what they’re getting and when they’re going to receive it.

“It also quickens our deliveries further away because our drivers finish their local deliveries, then tag the others at the end. The drivers are in-and-out of the warehouse quickly. Start times are staggered too, so there is a constant stream of drivers entering and exiting a depot every 15-20 minutes.”

Fully-immersed – but structural change enables rest!

With every conversation I have with Sanj – whether it be at CSF HQ, a branch or even Automechanika Birmingham – his drive and determination to see the business succeed is abundantly clear. I’m confident that desire, as well as the responsibility he and his business partner, Avnish, have could be overwhelming – and indeed that has been the case, as Sanj revealed – but the pair are now in a position where they can “switch off on a Sunday” before the cycle starts again on Monday morning:

“Even I’m able to switch off!”, he said with a chuckle. “I’m able to switch off a lot easier than I used to, let’s put it like that. There were times I would be in the office at 6am and not get home until 8pm, but that was in the earlier days when we were trying to get to grips with systems, processes and products.

“As the years have progressed, though, we’ve gained experience and employed the right people to help shoulder some of that responsibility. In recent years, especially, we’ve gone a step further by employing a management team and defining departments, such as operations, dispatch, deliveries, sales, procurement, accounts, admin and marketing.

“This has allowed us to step away from the ‘nitty-gritty’ and fully focus on what our jobs should entail: oversee and evaluate the business, identify new opportunities and carry out plans for the future to ensure we all enjoy long-term success.”

Impact of COVID-19 still being felt

It may or may not feel like a distant memory, but the impact of COVID-19 is still being felt for some businesses. At CSF, while there were some historic reminders, such as hand sanitiser and the occasional ‘social distancing’ sign, dotted around the warehouse, it was ‘business as usual’.

Whether to shut or stay open, particularly during the opening phase of the pandemic, was a dilemma, but Sanj claimed it was an easy call:

“OK, we shut for 10 days, but we then reopened with 25% of staff. Within a week of that, we were up to 50%, and within a month, we had our entire team return to work. We put the protocols in place – did what we needed to do – and believe it or not, we were busier than ever!

“Some of our competitors shut down while we were open, so a lot of customers that weren’t using us quickly did, and a lot of those have been retained. Because of that, the business has carried on growing, to the point where July 2023 was our best-ever turnover month in the history of our business.”

One garage, for example, was spending an average of £400-a-month but is now spending £12,000-a-month! Sanj added: “We’ve got another dozen garages that have followed in the same vein: we weren’t their go-to but now we’re their main supplier.”

Another branch to open?

CSF’s figures are only going in one direction at present, to the point where 2023 is projected to show a 15% increase on 2022’s turnover. Sanj paid tribute to the staff for their “monumental” efforts in helping CSF grow exponentially: “Without them, none of this would be possible! I hope we return the compliment.”

With the figures and Waltham Abbey branch, the baby of the bunch, already the third highest in terms of sales rankings and enjoying a “phenomenal time”, it must be time to dust down the map and search for the next site as Sanj and Avnish grow the CSF empire?

With a wry grin, he simply responded: “We’ll see.”