Download - Automotive Logistics Europe 2014 Aamer Rehman - Aftersales & Service Parts: Serving the customer and the supply chain”

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Aftersales & Service Parts Serving the customer and the supply chain

Aamer Rehman – Vice President, Industry Strategy & Solutions

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Prelude - Aspirations of Supply Chain Practitioners

Ensure a response service parts supply chain to provide the

highest level of customer service with minimal inventory

investment through proactive insight to market demand,

inventory rightsizing, intelligent replenishment, and bi-

directional collaboration with partners

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Service Parts Supply Chains are Gaining Importance *

Spare Parts’ Contribution to Revenue and Profit

Service Is More Profitable than Core Business

* Source: Cognizant 20-20 Insights – July 2012

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CUSTOMERS

Customer

Facing DC

Customer

Facing DC

Regional

DC

Global Suppliers

OEMs

Engine / Transmission

Supply

No of Sites per Region 10 No of Unique Parts 100K

% of Global Parts 80%

% of Domestic Suppliers 20%

Service Parts Supply Chains - Complex & Distributed

Domestic Suppliers

Global Logistics Centers

Dealers

National

Retailers

Local

Retailers

Fast Movers

Medium Movers

All Parts

Slow Movers

Fast Medium Movers

Premium Freight, Expedites / Transfers & Misaligned Inventory

Organized as Hierarchical or Non-Hierarchical Network

Differentiated Needs

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CUSTOMERS

Customer

Facing DC

Customer

Facing DC

Regional

DC

Global Suppliers

OEMs

Engine / Transmission

Supply

Domestic Suppliers

Global Logistics Centers

Dealers

National

Retailers

Local

Retailers

Fast Movers

Medium Movers

All Parts

Slow Movers

Fast Medium Movers

Organized as Hierarchical or Non-Hierarchical Network

Service Parts Supply Chains Lack End to End Alignment

Legacy Supply Chain Approach is Inadequate

Incomplete understanding of Supply Chain Interdependencies

Large amount of data spread across functional silos / applications

Slow response to changes due to long and disjointed planning cycles

“One Size Fits All” Supply Chain Orientation

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… Managed with Site Specific Execution Focused KPIs

Order fill rate: customer demands that are met from stock Stock out rate: customer demands not met due to stock outs Backorder Level: number of orders in queue waiting to be filled On time delivery: number of order fulfilled with agreed upon due date

“How do we get to processes capable of sustainable return on investment and Positive EVA in all business conditions?”

Focus

×𝑺𝑺𝑺𝑺𝑺

𝑪𝑺𝑪𝑪𝑪𝑺𝑺 𝑬𝑬𝑪𝑺𝑬𝑬𝑺𝑬 𝑷𝑷𝑬𝑷𝑪𝑪𝑺𝑺𝑺𝑺𝑺 𝑹𝑹𝑹 =

𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄 𝐕𝐕𝐕𝐕𝐕 𝐀𝐀𝐀𝐕𝐀 𝐄𝐕𝐀 = 𝐏𝐏𝐄𝐏𝐄𝐏 𝐀𝐏𝐏𝐕𝐏 𝐓𝐕𝐓𝐕𝐓 − 𝐂𝐄𝐓𝐏 𝐄𝐏 𝐂𝐕𝐂𝐄𝐏𝐕𝐕 𝐄𝐄𝐂𝐕𝐄𝐄𝐕𝐀

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Trailing behind Core Business in Supply Chain Excellence

ROI

Margin

Sales Revenue

Cost

Capital Employed

Cash

AP/AR

Inventory

Fixed Asset

Collaborative SIOP Segmentation

Segmentation Demand-Supply Balancing

Cost to Serve and Segmentation

Cash-to-Cash Cycle Reduction

End to End Visibility Segmentation Collaborative SIOP

Replenishment Modes 3P, WH Leasing

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• Segmentation of channels / customer and parts for improved cost to serve

• Inventory & replenishment policies to sync up with cost to serve

Differentiated Service Management

• Assess supply delivery risk and its impact on fulfillment capability at the customer orders level and collaborate with supplying partners

Supply Risk Evaluation & Collaboration

• Orchestration and continuous synchronization of demand, supply, financials and NPI at the regional and global levels

• Enable business / operational insights with trading partners

Sales, Inventory & Operations Planning

• Visibility to Inventory imbalances, transfers and orders • Single view of demand, supply, inventory and financials across the

service parts supply chain Visibility & Monitoring

• Replenishment plans based on projected inventory levels, consumptions and constraints

• Allocation of constrained supply based on business rules / demand priority

Intelligent Replenishment

Required Supply Chain Competencies for Service Parts

• Optimal positioning and stocking across the multi-echelon network • Segmentation along part, usage, margin and lead-time dimensions

Inventory & Supply Management

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Concurrent Planning Across Functions Consequence Evaluation & Alerting

Plan + Monitor + Respond x x Responsibility-Based Collaboration Business Trade-Off Analysis / What-If

Why Kinaxis is Relevant for Service Parts Supply Chains?


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