Using network design and optimisation to redesign an automotive aftermarket supply chain in Africa

With a high number of aftermarket parts, maintaining availability is difficult

Customer satisfaction in aftermarket part sales is a function of having the right parts available, while keeping costs competitive.

Servicing customers in east and west Africa from a single DC is not optimal
With an expanding footprint in Africa, serving customers all over the continent from a single DC is both expensive as well as detrimental to customer satisfaction.

Benefits for the customer

• A comparison of 4 scenarios with cost and KPI trade-offs.
• A potential 20% improvement in service levels and 10% reduction in global transport costs.
• Only an 8% increase in warehousing cost from a 1 to 3 DC model.
• An implementation plan with a 5 year return on investment.

Our DSV IO Service helped a global automotive OEM grow revenue and improve customer satisfaction.

With an unstructured network, it is hard to service customers

With 5 sources, 1 Parts Distribution Centre, 42 dealerships, 2 ERP systems and over 340K SKUs, the customer had a complex structure with no transparency.

Inventory availability is crucial to successful aftermarket part sales

By not meeting industry standards on inventory availability, the customer’s sales and inventory turnover was too low.

Benefits for the customer

• Detailed exception management dashboards and KPI reports improved service levels and led to a growth in profit across the network.
• Improved forecasting accuracy and inventory planning produce more accurate POs for the customer and its dealers.
• The implementation of the service directly led to a 24% increase in availability, a 9,8% reduction in inventory levels and revenue growth of 12,2%.