how to improve uptime with parts inventory management
DESCRIPTION
Daimler Trucks North America and Syncron teamed up to host a webinar on Retail Inventory Management. DTNA selected Syncron's RIM Solution to ensure dealers always have the right parts available, keep customers' trucks on the road, and achieve repeat business. This 45 minute webinar will focus on: • Automatically balancing part availability and stock size • Utilizing national demand at a local dealer • Incorporate mission critical parts • Replenishment automation • How to solve the data integration challengeTRANSCRIPT
How to improve customer uptime with Parts Retail Inventory Management
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Syncron is the global leader in aftermarket service optimization
• Dealer Management and
Aftermarket Specialist
– Inventory management
– Price Management
– Analytics
• Customers are multinational
companies
– Active users in more than 100
countries
– R&D intensive, investing >20% of
revenue
Meet the Presenter:
• MD Syncron Inc.
• Dealer Inventory
Management Specialist
• 15 years experience of
driving global supply
chain transformation
initiatives
Tomas Wennerstein Managing Director, North America
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Table of contents
• Parts Retail Inventory Management, what is it?
• Why there is often a high ROI potential
• Daimler Trucks Case Study
• Some practical examples of RIM planning
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The availability challenge
Central Warehouse250,000 part numbers
98% Availability
Regional Warehouse30,000 to 100,000
part numbers95% Availability
Local Service Location3,000 to 5,000 part
numbers55% Availability
60%+ Rush orders
“customers are up to 50% less likely to consider the manufacturer in a future purchase if they have a poor repair
experience”
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Drivers for Retail Inventory Management programs
Retail Inventory Management aim is to:
• Increased availability and especially for Critical items
• Increase part sales
• Ensure dealer loyalty
• Financially stable dealers
• Reduce stock obsolescence in the network
• Reduce warehousing costs at central depots
• Reduce distribution costs by reducing air freight costs
• Have clear management information across the network
• Reduce manual effort by dealers for managing inventories
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RIM the solution
DC Level
Suppliers
Regional Level
Branded Distributors/Dealers
Multi Brand Dealers
Sales Companies/Consignment (Service vans)
Region A Region B Region C Region D
End Customer
Scope
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RIM the solution
OEM
Dealer DMS
RIMSolution
Order Confirmation
Confirmed sales order - OEM
Confirmed purchase order - DMS
Parts masterdata
Part /stock infoSales info
Access via browser
Access via browser
• Dealers and OEM send necessary information to the solution an agreed interval
• Via web browser, the Dealers and the OEM access the functionality and the data that that involves their respective relevant Use Cases
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Table of contents
• Parts Retail Inventory Management, what is it?
• Why there is often a high ROI potential
• Daimler Trucks Case Study
• Some practical examples of RIM planning
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Key Reasons for high ROI
Inventory Management skills are negatively correlated with distance from OEM/DC and the number of tiers away in the Supply Chain
System support is often lacking at the dealer/subsidiary level
1. OEM has a lot of vital information directly relevant to Inventory Management close to the Customer
2. Dealer/Distributor has a lot of vital information directly relevant to Inventory Management at DC/RDC level
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Key Reasons for high ROI
OEM has a lot of vital information directly relevant to Inventory Management close to the Customer:
• Recommended stock lists
• Critical stock lists
• Supersession information
• Experience from other markets (If existing)
• Stock and excess stock Visibility Etc..
There is often no or a fragmented approaches to ensuring that these dimensions are considered in the inventory management closest to the customer
OEMDealer
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Key Reasons for high ROI
OEMSubsidiary
Dealer
Dealer/Distributor has a lot of vital information directly relevant to Inventory Management at DC/RDC level
• For certain product groups and slow moving items, the aggregated dealer forecast differs on average more than a factor 2 in a given month.
– Not picking up sales on new items
– Not understanding in time what items that are not being consumed and will be returned
• Above is no news. Despite that, most OEM are managing their DC/RDC forecasts based on purely Demand from Dealer/Distributor to DC.
Even with the most simplistic methods, large savings can be harvested by incorporating this information
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Table of contents
• Parts Retail Inventory Management, what is it?
• Why there is often a high ROI potential
• Daimler Trucks Case Study
• Some practical examples of RIM planning
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DTNA RIM project - Scope
• 2013 – Large Pilot with selected dealers
• 2014/2015 – Roll out Syncron RIM to all 600 dealers in USA and Canada
• Ongoing – Syncron delivering analyst services to support the dealer community in achieving the DTNA objectives
Phase 2013 2014 2015
Pilot
All 600 dealers
Analyst services
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DTNA RIM project – Effects from pilot project
• In general very positive reaction from pilot dealers
• Very good acceptance of forecast and replenishment orders from dealers
• Fill rate increased up to 30%
• Inventory reduction up to 15% - after 3 month’s use of the system
• Significantly reduced time to review the daily orders
• Redistribution very appreciated
• Many dealers have decided to let Syncron plan also non-DTNA parts
• Dealers are queuing up to join the program
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Table of contents
• Parts Retail Inventory Management, what is it?
• Why there is often a high ROI potential
• Case study
• Some practical examples of RIM planning
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The obvious improvments
• Better and dynamic forecasting
• Better Inventory Management including
– Support a segmented IM strategy
– Better and dynamic Inventory Parameter calculations
– Mange the local Demand and non-demand driven challenge
• Reduced administration related to Inventory Management
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DTNA RIM project – Key functionalities
• Replenishment policy approval
– Review changes to parts instead of orders
• National demand affecting local stocking policy
– High national demand parts stocked sooner at dealers
• Mission critical parts
– Mission critical parts inventory management incorporated in program
• Redistribution
– Automatic redistribution of excess stock within a dealer family
• Non OEM parts
– Support for managing non DTNA parts at the convenience of the dealers
• Automatic returns of excess and obsolete stock
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Key work streams in a RIM initiative
• Anchoring of concept on high Management level and in the different Regions will be success factor for global coverage
• Understand what business requirements that are vital for your business and what can be achieved by a RIM initiative
• Establish Terms and Conditions. Make sure to remove operational responsibility from the dealers/subsidaries
• Pilot
• Establish templates before starting the rollouts
• Group rollouts based on Regions and DMS/ERP systems
• Interfaces to ERP/DMS should preferably be established prior to the start
• Ensure that Rollout projects can be run in parallel.
• Selecting the right software (RIM is different)
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Q & A
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• Stocking policy for a default spare part
• Stocking policy for a “National demand” Spare part
Above is an example of a possible segmentation of Dealer Inventory Management strategy
National demand affecting local stocking policy
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Multi Site Dealers - Redistribution/Balancing
• One redistribution order of 5 will be created, supplied from the Prio 1 warehouse.
• One redistribution order of 2 will be created, supplied from the Prio 2 warehouse.
• The pending order of 8 will remain but the OQ will be set to 0.
• Redistribution/ Inventory Balancing functionality can be run as mandatory or as recommendations. The later has been necessary for certain dealers in RIM projects from a Change Management perspective.
Redistribution region
OEM
Excess = 4
OQ = 8UOQ = 7
Excess = 5 Excess = 6
Prio 1
Prio 3
Prio 25 2
Example:
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Replenishment policy approval – New module
Approve changes to the policy – Let the system order automatically