Managing inventory properly brings savings

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UK and European companies are throwing away millions of pounds annually in lost revenues and missed cost savings by not optimising their aftermarket logistics strategies, according to Caterpillar Logistics division XPart.

John Stephenson, managing director of XPart, says: “Companies have fine-tuned their mechanisms for getting new goods to market quickly and efficiently, but very few have paid the same attention to the opportunities that the aftermarket presents, despite the fact that parts sales are often more profitable than original equipment. By managing inventory properly, getting the right information to customers and using the most efficient methods to deliver parts, savings can be tremendous.”

He also highlights the likely increases in logistics costs as a result of Block Exemption legislation. “Supplying many more outlets, each with smaller orders, fundamentally changes the systems needed to maintain high efficiency and high levels of customer service. XPart has invested considerable resources in helping our customers meet this need.”

Infrastructure requirements can be strikingly similar across different industries, allowing powerful economies of scale to be achieved by sharing resources between different organisations. XPart draws on a diverse and comprehensive range of client experience – Electrolux, Harley Davidson, Sony Ericsson, American Tool, MG Rover, Kodak, Perkins and TRW – to offer capabilities to automotive and industrial businesses.

XPart has developed a quick online assessment tool which allows companies to rate their current performance against industry best practice and identify the areas with the most potential for improvement. The system can be accessed at

Stephenson says: “Parts logistics has been ignored for far too long. Companies should make 2005 the year that they bring their aftermarket operations up to world class levels of performance, and start to reap the benefits in terms of improved customer satisfaction, lower costs and higher revenues.”

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