Triskaidekaphobia Cars and Information Economics

So, the Irish Government has decided – based it would seem solely on the analysis and advice of the Society for the Irish Motor Industry- to introduce a revised licence plate system for Irish cars starting from January of next year.

The reasoning put forward is that fear of the number 13 will hamper car sales (superstition) and people don’t like the current system because they don’t know for certain when a car was manufactured (snobbery).

Snobbery

To address the snobbery element first, according to comments from SIMI quoted in the Irish Independent:

Even though 70pc of new cars are bought during the first four months of the year, some consumers believe that it doesn’t accurately reflect the real age of a new car since cars bought in January are obviously manufactured the previous year while those bought later in the year are actually made in the same year

So. 70% of all new cars are purchased in the first four months of the year. That’s a good statistic. It means that, on average, 3.75% of all new cars are sold in each of the remaining 8 months of the year. From that a reasonable guesstimate of the value at risk in each month can be worked out.

What is not a good statistic is “some consumers”. Is that one consumer, one consumer and their friend from the gym, 1000 consumers, or every consumer who buys a car in the first 4 months of the year? If is the latter it obviously doesn’t bother them that much or they wouldn’t buy until later in the year.

Surely a better and more cost effective approach would be for the SIMI to educate purchasers about the manufacture and supply chain processes that apply to vehicles. Bluntly – car manufacturers don’t build cars in the hope they will sell them. That’s too expensive. They apply logistics principles to build enough to just about meet forecast demand. And no more. So a car purchased in January will not have been sitting in a storage facility for a dozen months. It will be relatively recent.

And does the fact that it was manufactured in the previous calendar year actually matter if features, specifications, and price are the same in December 2012 versus January 2013. I know from experience that the announcement of a new model of a car affects book value, but, excluding the change of model for a moment, logistics need to be considered when we think about the idea of the year of manufacture being a real decision point for people. After all, a car manufactured in January 2013 will be using parts that were on-hand at end December 2012, that were probably ordered at the start of December 2012, and were probably being manufactured by the downstream supplier from October 2012 in anticipation of a glut of orders from car manufacturers in December/January 2012.

The new iPhone isn’t due out for a while yet, but already there are rumours of supply chains having been ramping up for months… that’s how logistics works.

And as the supply chain for vehicles is largely a pull supply chain (building to respond to demand), the easiest way to avoid having a car that was assembled in 2012 delivered to you as a new car in 2013 is to order it in Month 2 or 3 of 2013.

But even then it doesn’t matter as the actual age of components going into the car will depend on the vagaries of supply chain management down the line from the dealership to the nice man in Schenzen whose company makes the screws that hold your sun visor in place.

I can remember a few years ago looking to buy a particular model of car. The dealership didn’t have any in stock and when they (and this is the CSI moment) looked at the logistics system from the manufacturer they were able to tell me when the next one of the model I wanted would be manufactured. There was no great holding pen of stocks waiting for me to turn up and buy.

So… I would really like to see some objective evidence that people actually give a rats ass about when their car is assembled, given that the majority of new cars are purchased in a time period when it would be logical that the supply chain inputs to the delivery of that car would have taken place in the previous year. The data does not correlate.

Superstition

It’s a number. Currently there are vehicles on the roads in Ireland with the number 13 in their license plate. Not in the year, but in the other element of the license plate.

Surely insurance companies can provide data on the number of claims involving vehicles registered within the past 10 years with the number 13 in their license plate against which we can determine if superstition is borne out by evidence. If it is… brilliant, we can establish an economic value case for changing an otherwise logical and straight forward system.

The National Vehicle database (where registration numbers come from) would likewise have data on how many cars currently have a 13 in their license plate. If people are already avoiding it then the data will be there… lots of 12s, lots of 14s, no 13s.

If not. Then there’s no actual reason to change other than a vague (and quantified) assertion that people won’t buy new cars because they have a 13 in the license plate.

Reality

This sounds like a simple change. But it isn’t. Many of the systems that your licence plate goes into are old and could require systems changes to accommodate the new format. Many of these are government departments. For example:

• National Vehicle Driver File (Dept of Transport)-  reg number and registered owner
• VRT tax systems (Revenue Commissioners)
• Gardaí (PULSE system, asset registers for garda vehicles)
• Insurers
• Car park ticketing systems such as the Pay-by-SMS service in Dublin (Local Authorities)
• Car clamping operator systems
• CIE (they need to log busses)
• Car Rental operators

It would be interesting to know if the Government commissioned any form of economic impact assessment to off-set the cost of catering to one industry lobby group for a problem that would exist in one year against the costs to the State and other private sector organisations of making systems changes to support the new format.

Particularly given that the changes would need to be implemented before mid December to allow for them to be in place for cars being registered in January.

The reality is that life is not like Star Trek and data is not well managed. I would doubt if there is the required metadata available to do a quick Impact Assessment on the change. At a minimum you would need to know the maximum field lengths for reg numbers in key systems. Other data required would be information on data transfers, batch processing functionality, or edit checking that might be applied to make sure that the full extent of the changes is understood and addressed to avoid any systems or process failures.

I was involved in a lot of that kind of activity in Call Centre systems for Y2K in a former life. It is not easy if things aren’t documented. And they are never documented.

My prediction: It this suggestion goes ahead without any rigorous impact assessment here will be at least one major process failure in January/February 2013 arising from this. It is an idea that, while it may have merits, risks being rushed in without proper impact assessment being performed or any examination of the costs of implementation across the public sector or other private sector users of this information.

In reality there has been a tentative Value case put forward with no corresponding assessment of the costs associated with delivering that value. And a horrendously ambitious time scale to make what is actually a deceptively complicated change.