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Spare parts inventory management solution
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| Achieve an optimal balance of spare parts
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It’s a difficult task to balance just the right amount of automotive spare parts inventory to improve customer service levels. IBM provides the spare parts inventory management solution to help you gain near real-time inventory information across the delivery chain—original equipment manufacturer (OEM), distribution centers, wholesalers and dealers—to help you reduce inventory costs while improving customer service levels.
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| Automotive experience and measurable results
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IBM can help you select the right tools, implement them and tailor them to your business environment. We have implemented the IBM Dynamic Inventory Optimization System, one part of the spare parts inventory management solution which complements existing plan applications, at more than 30 client sites. And we have measured a 30 to 60% inventory reduction with a business value of US$10-500M per year. In addition:
- We offer more than 2,000 IBM certified and globally distributed automotive consultants.
- IBM Research has developed unique analytic methods and inventory optimization algorithms to reduce inventory while increasing service levels.
- We employ 20 to 30 experts in inventory process consulting and systems integration to provide quick cost saving results.
- The unique skills and expertise of more than 50 application and domain experts, and more than 200 implementation specialists enable us to successfully roll out spare parts inventory management solutions for automotive companies.
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| Drive customer service with accurate inventory levels
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By gaining near real-time insight into automotive spare parts inventory along the end-to-end delivery chain, you can optimize inventory to improve customer service levels. The spare parts inventory management solution from IBM can help you:
- Reduce spare parts inventory expenses with inventory optimization tools and algorithms that enable you to decrease your holding costs while having the right mix of parts on hand for quick auto repair turns.
- Improve customer service by decreasing wait times and providing technicians with near real-time status on part availability and location to accurately inform customers of their vehicle and parts status.
- Calculate the safety stock, reorder quantity and stocking location for each individual part.
- Create and update demand forecasts for each SKU and location on a daily or weekly basis using methods that can help minimize forecast error.
- Measure and maintain automotive customer service levels using key performance indicators and near real-time monitoring with dashboards.
- Optimize the trade-offs between stock value, order quantity and frequency.
- Consider inventory carrying costs and order processing costs in setting spare part inventory targets and reorder quantities.
- Measure replenishment cycle time and variability for each part location to optimize inventory levels.
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| German company gains optimal inventory levels
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A major German-based corporation in automotive components had noticed that its central distribution center for filter products was "out of balance." The center was carrying excess inventory, but it was missing its targeted customer service levels. Forecasting and planning were insufficient. The company needed a solution that could consider specific planning requirements and calculate optimal inventory quantities for each of its products.
IBM consultants quickly went to work using the IBM Dynamic Inventory Optimization Solution from the IBM Center for Business Optimization. The solution makes use of highly sophisticated mathematical techniques that are designed to help companies with single- or multi-echelon networks manage their inventory to optimal levels while preserving or improving customer service levels. Proper inventory management also provides companies with the potential to reduce overall logistics costs, as well as increase asset utilization, inventory turns and customer satisfaction.
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| IBM—working hard to improve your bottom line
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In our work with clients in the automotive industry, as well as other industries, we have found inventory overages that range from 10 to 90%, with an average 41% above optimized levels. Finding the dollars hidden in your inventory requires experience, analytics, optimization and simulation. Through the implementation of IBM’s spare parts inventory management solution, clients have significantly reduced inventory levels, making millions of dollars of capital available while increasing customer satisfaction.
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Questions about this solution? Contact an IBM automotive specialist.
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