Doing the Right Thing - a PQIA News Article
Doing the Right Thing - a PQIA News Article
Over the years, the Petroleum Quality Institute of America (PQIA) has issued Advisories and Consumer Alerts on dozens of motor oils that failed specifications, made unsupported claims, or threatened to damage engines. The companies that produce and market these oils often react differently. Some deny anything is wrong, while others attack the test results, PQIA's interpretation, or our chain of custody. Others still just sit tight and hope their silence makes it all go away. A few, however, take a more positive approach. RelaDyne is one of those companies.
Last March, PQIA issued a Consumer Alert on one of RelaDyne's brands, Bullet 5W-30 motor oil. This product was found to have serious deficiencies that were potentially damaging to virtually any car currently on the road. Rather than arguing, threatening, or denying, RelaDyne took the high road.
Within hours of the announced Consumer Alert on Bullet, Tony Garera, Director of Supply Chain for RelaDyne's Cincinnati branch, contacted PQIA to assure us he was looking into the matter and would take appropriate action. The following day, Garera contacted PQIA again to advise that they identified the products affected and were issuing a product recall. To help assure an effective recall, RelaDyne contacted its customers and sent a driver to each location to pick up the product. Further, RelaDyne offered a refund on the recalled products. Within 30 days RelaDyne proclaimed "all recalled product was out of the market." In addition, the recalled product was tested by a third party laboratory and a processer to assure proper disposal.
In an effort to understand how this situation occurred and to assure it doesn't happen again, RelaDyne dug deeper into the history of the Bullet brand. Its review found that the brand was a niche product brought into the RelaDyne fold with one of its acquisitions. It was positioned to compete against the API SA motor oils prevalent in the C-Store market, and due to its low volume sales, it flew under the radar of the top brass at RelaDyne. When senior management did become aware of it they questioned why one of its branches would continue to sell obsolete motor oil.
Rather than continuing to sell obsolete motor oil, on August 12, 2013, Larry Stoddard, RelaDyne's CEO and Dan Oehler, RelaDyne's VP of Sales and Marketing made the decision to terminate the "Bullet" brand. The company then replaced Bullet with DuraMAX API SN, ILSAC GF-5, motor oil manufactured by TruSouth. According to Dan Oehler, "This was a business and integrity decision driven by RelaDyne's position in the market as an industry leader."
The next step RelaDyne took was to proactively convert all of its customers from the old and obsolete Bullet brand to the new and current specification DuraMAX. And that conversion process worked. In part, RelaDyne says, it was successful because at the end of the day, the wants and needs of RelaDyne and its customers must be aligned. Both want and need reliable lubricants formulated to meet the needs of most cars on the road, and offering a product formulated to compete with obsolete specifications does not serve those needs.
The significance of this point was underscored by Jason Flynn, Category Manager with United Dairy Farmers. United Dairy Farmers (UDF) operates a large chain of convenience stores and gas stations throughout the Greater Cincinnati area, as well as Dayton, and Columbus Ohio. Whereas UDF had carried the Bullet brand, Flynn says "Our decision to switch from Bullet to DuraMAX began with our customer's best interest first. We wanted a high quality product to meet our customer expectations for product performance. We are also pleased that both revenue and gross profit in this category increased from this transition."
Larry Stoddard makes no bones about it; the learning process with the Bullet brand came at a cost to RelaDyne. "These include costs tied to switching suppliers, recalling product, offering product refunds, testing, disposal, and others." But at the end of the day, Stoddard says, "It was an expensive, yet instructive experience and we are pleased with the outcome. This experience resulted in changes in behavior that have made us a stronger and an even more reliable company to do business with." To that end, Stoddard added, "We have implemented a number of changes to help enhance and assure the quality of lubricants we market and hope our experience can be instructive to others."
According to Stoddard, key to that experience is the more robust vetting process RelaDyne now has in place to evaluate suppliers it does business with. In many respects, Stoddard says, "This process is a similar model used by major oil companies to assure the quality of the products its marketers sell." As the majors vet their channel partners, RelaDyne now more rigorously examines the suppliers it does business with. With regards to private label blenders, Stoddard says "Important metrics it looks at include the blender's market value, history, reputation, fill rates, filling accuracy, lead times, QC procedures, level of insurance, financial position, and others." Further Stoddard adds, "The vetting and supplier approval process is conducted at the corporate level."
With that, PQIA tips its hat to RelaDyne. Whereas some companies might have taken a negative or defensive position when PQIA issued an Advisory on the Bullet brand, RelaDyne stepped up to the plate, acknowledged the issue, corrected it, learned from the experience, and implemented changes to further assure the quality and integrity of the products it sells. Further, RelaDyne offered up actions others might consider to avoid going through the same. This is the way a quality company should react when presented with a serious quality challenge.
Hopefully there is something to be learned from this, because as Benjamin Franklin once said, "A small leak will sink a great ship."