In the past, trying to decide what part numbers will create the best inventory to offer your customers was not only tedious and slow, but something akin to peering through a broken crystal ball. It can be tough to predict what part numbers will be needed most when the customers call. That murky, mysterious process is now a thing of the past for customers and members of the Uni-Select USA distribution group thanks to its eModeling system, first developed in 2006.
Jeff Brekke and Dave Miller from Gates Corp. accept their Polk Inventory Efficiency Award from Stephen Polk and Mark Seng of R.L. Polk & Co.
Uni-Select USA was recognized for its eModeling solution as one of two winners of the Fifth Annual Polk Inventory Efficiency Awards, presented at the 2009 Global Symposium last month in Chicago. The award was designed to recognize and reward outstanding automotive aftermarket companies for process improvements relative to inventory efficiency.
Uni-Select was the winner in the Retail/Distribution category. Gates Corp. was selected as the winner in the Manufacturing category.
According to Rick Williams, director of Store Inventory Modeling for Uni-Select USA and lead manager on the eModeling project, the system was originally built for Uni-Select USA’s independent jobber customers. However, the program has been so successful it’s now used internally as well.
“First and foremost, we allowed the customer to pick where they want their demand from,” said Williams. “They can pick from multiple warehouses or the entire company; there’s a lot of flexibility there. The next thing we did in addition to that pick, is to offer part numbers based on vehicle registrations in that market numbers not already included that they might want to consider.”
Uni-Select’s Richard Roy and Brent Windom accepted their Polk Inventory Efficiency Award at this year’s Global Automotive Aftermarket Symposium in Chicago.
Building upon that basic wish-list of information, Uni-Select added on other key features, such as store quantity and stock levels, warehouse and store demand and the ability to upload information up and down the system without any keypunching. And, the entire system resides on the Internet. All of the information is available in real-time and there’s no software to install and update.
“All this stuff is meaningful because now the user is looking at his own inventory and it gives him all the information needed to make a good, intelligent decision,” said Williams.
While the system was primarily based on customer feedback, Williams said he used his own experience spending a quarter of a century behind the counter to help shape the functionality and ease of the program.
“I spent 25 years as a store/district manager prior to my current position and struggled with these same issues,” said Williams. “It’s exactly what I’d want if I was in their shoes. We solicited feedback from customers. It was all built from their perspective.”
When asked how quickly Uni-Select started to see results from the program, Williams said the positive feedback was immediate. However, within nine months of building the system and using it corporate-wide, Uni-Select had identified $12 million in returns.
“That’s a pretty big statement,” Williams remarked.
As for Gates Corp., the other winner of this year’s Polk Inventory Efficiency Awards, the beauty of its inventory management solution comes from its simplicity. Gates’ winning solution an electronic “kanban” system was based on the highly successful kanban system at Toyota, where Tim Conrad, Gates’ director of global supply chain integration, worked for many years before joining Gates. Kanban is a just-in-time inventory control method that keeps inventories low by scheduling needed goods and equipment to arrive a short time before a production run begins.
For Gates, Conrad said the key to creating an effective system was eliminating the unnecessary complexity found in other solutions like Oracle.
“What we wanted to do is move away from trying to manage inventory with a forecasting system and get into a replenishment-type system where we could set target inventory levels based on the supply chain cycle and send demand signals back to the manufacturing plant at a logical intervals, a logical interval being a lot size for example,” said Conrad. “When you hit an order quantity, it creates a pure pull system so that you are getting exactly what you need when you need it.”
With Conrad at the helm, the system first set up in 2006, was developed by a group that included representatives from Gates manufacturing plants, IT people to write programming, planning staff and schedulers in the plant. All had a role or level of involvement in inventory management, thus, all should have a role in developing the right solution. Within 90 days, Conrad said, the company started to see results.
“When we launched our pilot project, with just a few products in one of our manufacturing plants, we saw improvement in inventory levels and in the quality in the inventory,” Conrad said.
The system is now used across the board at Gates plants in North America and in Europe. The plan is to launch the system at Gates plants in Asia as well.
While the improvements in inventory and the recognition of winning the Polk Inventory Efficiency Award were gratifying, Conrad said setting up the system was also helpful in providing management with hard data answers to their questions during this difficult economic climate.
“It was incredible timing for us as well,” Conrad said. “We had some management changes in the company and of course, when that happens they want to look at your inventory and talk about your current inventory philosophies and we were really in a position to answer their questions with facts and data.”