Inventory management is vital for all suppliers in the automotive aftermarket and spare parts industry in order to operate efficiently and remain profitable. It entails a complex balancing act of ensuring enough stock is available for customers when they need to purchase, while simultaneously ensuring there is no surplus stock waiting in the warehouse for long periods of time.
In order to successfully do so, suppliers in the automotive aftermarket and spare parts industry today must provide wholesalers, retailers and independent repair shops with the correct parts in the shortest space of time.
However, the supply chain and distribution channels for automotive spare parts and accessories is complex as it consists of a myriad of moving parts:
- Different customer types
- Price and price sensitivity
- Market potential for specific products and
- Competition from a variety of local and international manufacturers
It is widely believed that once a company can navigate through these complexities and have the ability to forecast sales and estimate future demand to its most accurate number, it will significantly streamline the supply chain, enjoy more efficient operations and generate better sales thereby defeating the competition.
To say that forecasting sales and predicting demand in the industry is difficult would be an understatement. The fluctuation of prices, demand and even competition play a hand in making inventory management one of the most challenging components of the automotive aftermarket and spare parts industry.
How can companies overcome this challenge?
A business intelligence tool can help organisations analyse their data and draw insight from their data to make accurate forecasts and estimations to cope with the future.
First Line located in the UK, has almost 30 years experience in supplying high quality components to the automotive aftermarket. It currently manages a portfolio in excess of 30,000 live part numbers and supplies to 2,100 customers worldwide. To help manage their business and manage their inventory levels, First Line relies on Business Intelligence and analytics solution software.
Ian Boyle, First Line’s National Account Manager states “Our BI software allows us to efﬁciently analyse sales trends by customer, by product group and by individual item.” Boyle went on to say “The BI software also easily highlights those customers that do not take a product or product range, which, in a fast moving and complicated portfolio such as ours, gives fast feedback potential on business wins and losses”.The ideal Business Intelligence software should assist a supplier in analysing sales data and allowing them to segment it by customer demographic and geographic location at the very least. Separating sales data into these two segments can offer a supplier significant insights into future sales volumes and where those sales will take place. Items that sell well in one location may not necessarily sell well in another location.
By analysing current and historical data, suppliers can identify specific trends in sales and demand that will inform forecasts and estimations. Suppliers can then align their sourcing and distribution activities accordingly to these predications, to ensure the most appropriate level of stock is maintained, at the most convenient location.
Ultimately, suppliers will have the ability to better manage their inventory and ensure no sales opportunities are lost as a result of poor inventory management.
To learn more about how Business Intelligence software can assist you in operating a more efficient and profitable business, download our free ebook ‘Business Intelligence Guide for Automotive’ by clicking on the image below.
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