Innovative Concepts in Inventory Management - Jeff Hansen, Major Accounts Director, Uni-Select, Ray...

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From the New York Public Transit Industry 2010 Fall Conference & Trade Show.

Transcript of Innovative Concepts in Inventory Management - Jeff Hansen, Major Accounts Director, Uni-Select, Ray...

  • 1. November 17, 2010

2. Session AgendaIntroductions Is the OEM really the OEM?Jeff Hansen Sourcing OptionsJeff Hansen What has gone wrong?Jeff Hansen Making inventory work for you.Jeff Hansen Partnering SolutionsJeff Hansen Industry Challenges Ray Melleady VMI as a Solution Ray Melleady Supply Chain SilosRay Melleady The Real Cost of InventoryRay Melleady Open Forum Questions & Discussion All 3. Uni-Select By the NumbersAn Industry Leader40+ Years of Continuous Growth 2009 Sales $1,410M 40 Distribution Centers 250 Company Stores 3,500 Customer Locations $400M Available Inventory 350,000 products 4,800 Employees 4. Is The OEM truly the OEMParts Strategy: OEM and AftermarketSame or Different? Auto, Truck & Bus Manufacturers Core Competence Who are the Manufacturers If this is True. What Drives customers back to OEM? Selecting the proper Products & Distribution Opportunity for Savings 5. Sourcing...You Have OptionsSourcing Parts: You Have Options What are your Objectives & Expectations Advantages & Disadvantages of: Single Source Supplier Multitude of Suppliers Buying on Price Buying on Delivery Whats the Best Choice? 6. Inventory Management What Goes Wrong & Why Application Platforms Inventory Obscurity Inventory Obsolescence Part Proliferation Complex Cataloging Supplier Overload Systems Integration 7. Inventory Management Vehicle Tailored Parts Management Vendor Provided Inventory Parts Operation Outsourcing Controlled Operating Expenses Eliminate Inventory Burden & Responsibility Reduced Admin. & Transaction Expenses Controlled Personnel Costs Accountability & Efficiency Improved Facility & Tech. Productivity Systems Integration 8. Industry Challenges MoreLeadSymptom or Cause?InventoryTimes Delivery lead times Inventory levels Value SKUs WarehouseMorePartsObsolete SpaceSpaceAvailability EconomicMore RiskParts Obsolescence Spare ratios Availability Bus down Non productivetech timeMore Buses Spares Down 9. Inventory Optimization Holding + ordering costs = total cost curve. Find Qeoq inventory order point to minimize total costs.Total CostCostHoldingCostsOrdering Costs QeoqOrder Quantity (Q) 10. Supply Chain Silos Transit StockroomDEMAND INFORMATION DIRECT SUPPLY FROM SOURCESuppliersSub- Assembly Warehouse Assembly Logistics 11. Why Vendor ManagedInventory? Risk Inventory AvailabilitySavingsManagementReductionMaximizeAvailability Just inTime or Just in CaseMinimizeInventoryA well structured VMI Program can mitigate Conflicting Objectives 12. Supply Chain EvolutionSupplier/ Bus Just in Case Supply OEM-DependentChain EraEra EraTransit relied on To improve availability Neopart technology and suppliers who transits purchased deepsourcing expertiseincreasingly failed toinventories just inenables efficient accesskeep sufficient stockcase to the best suppliers Need Generated Large inventory Costs Production Long Lead Times High Obsolescence CostsResult Less InventoryMany Buses Down WFPStill large number ofBetter Bus Availability Large amounts of Idlebuses down WFP Reduced Overall CostsCapital 13. Measuring Cost & SavingsEstimated $of SavingsTotal million inventorySource Savings with 5 Inventory Cost as a % of for VMI Programs For every dollar of material weWarehouse Expense$50,0001-3% 1%consume, our Physical Handling $50,0001-3% 1%internal handlingcosts amount toAdministration$150,0003-6% 3% an additional 18cents. Cost of Money $250,0004-6% 5%NYMTA Jan.2010Obsolescence$300,000 6-12% 6%Cost of Parts $300,0006-8% 6%Capital Utilization Rate $50,0001-3% 1% Savings Potential Total Cost 41% $1,150,0002223% 14. Organizational Overview NEOPART is a long established partsprovider to the transit industry Management team with more than 100years of experience Providing parts to more than 90% of UStransit systems Superior knowledge of bus parts supplychain Global Sourcing on axle parts, discbrakes, slack adjusters 15. November 17, 2010