General Description
A distribution company in the automotive industry has a product catalogue of over ninety thousand products for 18 car brands and all types over the last 30 years or so. They limit them selves to what they call GPS (Glass, Plastics and Steel), body parts. All items have a specific code widely used in the automotive industry. The code has intrinsic coding like car-type, front – rear, left – right, etc.
In the automotive industry the shop floor is dominated by craftsmanship and automotive technology. Once a damaged car is entered an assessment of the damage is made and after the required insurance inspection all necessary parts are ordered based on a paper catalogue every supplier distributes. Shop floors have a variety of these catalogues. The items are entered on a paper form and than faxed. The GPS Company receives the fax, retypes all listed numbers in their ERP-system and orders are picked and distributed. The communication around incoming faxes is very labour intensive and new management planned to improve their ordering process.
The inbound sales force made to many mistakes re processing the incoming faxes and the competition worked in the same fashion.
The catalogue had a newly born digital sister, a CD-ROM. They were produced on a quarterly basis to maintain information. During the process analysis we did we found out that there were two point of improvement that would generate profit.
1. Stop faxing
2. Reduce delivery failures
A light unit requires clamps and screws to be installed. These items are not included in the product package. With the introduction of father-son-grandson relationships between items flawless delivery could be created
Facts and figures
Fast Moving consumer Goods will spend 9,8% on online advertising in 2008.
Traffic is becoming increasingly safe. As a result the spare parts market has seen a decline in turnover of 15% annually over the last 6 years. A fundamental shake-out is taking place and now only 50% of the original players remain.
Strategic challenges
1. Be the number one order portal
2. Link items together
3. Facilitate shop floor with adequate information to be able to calculate up front
4. Get your legacy systems out of the line of fire
Probable solutions
1. Create a relational order portal - circumventing the legacy systems - where shop floor personnel can order by clicking on constructions drawings. Relations between items can be made by GPS staff.
2. Allow shop floor staff to track their order digitally
Implementation
We implemented a single page web site on top of the car industries standard parts database, enriched with relational information. Synchronisation with lagacy systems was done overnight .
This lead to spectacular results
1. Implementation was cheaper than CD-ROM and catalogue production costs for one year.
2. Internal sales force was reduced by 80%
3. Delivery failures were reduced from 8% to 0,5%
4. Paper catalogues and CR ROMs were no longer produced
5. Competition was forced to follow or join the initiative
6. Processor load on legacy computers fell from a dangerous 70% to 20%. No terminal sessions were open.
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