Saab Automobile Parts overhauled its demand planning and supplier relationship management systems after being sold by General Motors in 2010, enabling it to achieve 97.5 per cent product availability and improve supplier performance.
Saab Automobile Parts is based in Nyköping, Sweden and is Saab Automotive’s main warehouse and distribution centre for spare parts and accessories. The facility was established in 1969 when the Saab Car Division of Saab-Scania was created.
Saab manufactures cars for 60 countries worldwide with its primary markets including the UK, US, Sweden, Germany, the Netherlands, Switzerland, Norway, Australia, Italy and France. It typically produces 100,000 cars each year.
The company was acquired by Spyker Cars NV in 2010, having previously been owned by General Motors (GM) since 1989. The automotive manufacturer has 6,000 employees and is based in Trollhattan, Sweden.
Following its acquisition, Saab faced two options with regards to its demand planning and supplier relationship management systems.
One option was to continue its existing system on a paid-for basis, but the cost of “renting” General Motors’ systems simply wasn’t sustainable so the parts company decided to implement its own.
A timescale of six months was agreed for the data transfer, therefore Saab had to select and contract a supplier, and have absolute confidence that the solution could be implemented against the deadline – there was no contingency in meeting this deadline.
With 1,100 suppliers and 64,000 different parts, the specified systems had to be proven, scalable, robust and flexible.
Saab used Infor10 Demand Planning (Infor SCM Demand Planning) while it was part of General Motors, so it decided to work with Infor to implement Demand Planning, as well as Infor10 Supplier Commerce Portal (SupplyWEB) which it hadn’t used previously.
The teams then collaborated with Saab Automobile Parts AB’s IT department and agreed that while the timescale was achievable, it presented a number of challenges.
Firstly, Saab had a myriad of systems rather than a single ERP system, and secondly, data quality was inconsistent.
Finally, numerous third party hardware, software and consultancy providers were involved, which meant multiple teams were necessary and that some decisions took longer than may have otherwise been the case.
Kent Juter, business project lead, Saab Automobile Parts AB, said: “Having the right system to support our operations was fundamental, but of equal importance was the ability for Infor to implement quickly and to our timescales. Failing to meet the deadline simply was not an option.”
Saab Automobile Parts went live with Demand Planning, to include Demand Forecaster; Inventory Planner; and Replenishment Manager, and Supplier Commerce Portal, in November 2010 following a six month implementation.
Demand Planning helps Saab’s 12 planners to create a live picture of demand at any one time, using advanced statistical capabilities to track and shape demand for 64,000 different parts, minimising inventory and maximising service levels.
Since using the system, Saab has achieved measurable service improvements, hitting targets of 97.5 per cent based on product availability when an order is placed. It also helps fulfilment in maximising the number of orders which are picked, packed and shipped before 3pm on the same day as the customer request.
“Demand Planning helps us to manage expectations and deliver consistently high service levels. Without it, we simply wouldn’t be able to plan effectively and meet requirements fully,” Kent added.
Furthermore, the team now have greater control over the management reports which are flexible, intuitive and easy to use, helping to provide both relevant information and a single view of the truth in the creation of plans.
Efficient collaboration with suppliers is also crucial in meeting demand, and Supplier Commerce Portal supports Saab in managing relationships and communication with its network of 1,100 suppliers.
“Around 50 per cent of our suppliers use EDI and the remainder rely largely on email,” said Kent. “Supplier Commerce Portal facilitates effective collaboration with all of our suppliers regardless of the systems they use. For each order, Supplier Commerce Portal simply creates a file which then goes directly into the EDI or creates an e-mail containing the PDF.
“The level of efficiency facilitated by Supplier Commerce Portal means that we are already benefitting from reduced inventory and improved supplier performance.
“Looking ahead, we are considering a number of additional projects. One of those projects is ‘direct deliveries’ whereby the dealer places an order for a part and the system redirects the order straight to the supplier, who then dispatches the item. This clearly reduces inventory and expedites the order process.
“We are also preparing to use Demand Planning and Supplier Commerce Portal as we plan new warehouses within Saab Automobile Parts AB. The solution’s functionality in supporting multi-level warehouses will be integral in helping to meet this need.”