The single most important question that you can ask about any automotive supply chain is ‘what level of service are we delivering to the end customer?’
For over 20 years Unipart Logistics has been working with Jaguar to provide a high level of customer service by optimising the parts supply chain to the company’s 850 dealers around the world. The service provision includes sourcing, storing, processing and dispatching parts from seven warehouses to some 850 Jaguar dealers, in over 60 countries. The aim is to ensure that the right part is in the right place at the right time, 24 hours a day, seven days a week.
The Jaguar Global Control Centre is the focal point for managing, monitoring and controlling the complex Jaguar aftermarket parts supply chain. This state of the art centre brings together people, processes and systems to continuously improve each step of the supply chain and ensure they work together in harmony.
A key objective is to maximise the availability of parts to the dealers from the warehouses. Several years ago, however, Jaguar and Unipart started focussing more on the service provided by the dealer to the end customer. It was found that many dealers were not measuring how many cars they serviced right first time on time. On looking at their inventory it was found in many cases that they were holding the wrong profile of parts: some 50 per cent of the stock had not moved in the last year.
A system was developed to provide central management of dealer inventory and to set stock policy and profiles for dealers. As a result inventories have been reduced, and a 10 to 20 per cent improvement in availability has been achieved. Actual customer demand is now used to pull inventory through the chain.
It is difficult to forecast demand for parts in the aftermarket, with demand unpredictable and over 60,000 parts to manage. Furthermore, suppliers’ focus is often on supporting the production line rather than the aftermarket, which means the latter can often get overlooked. Fortunately Jaguar is excellent at emphasising the long term importance of the aftermarket to its suppliers.
After a vehicle has gone out of production it may be necessary to supply parts for anything up to 30 years. That can involve finding new suppliers who can produce parts in the small batches required.
A true logistics services partner should work with an OEM from a model’s development stage through to its launch, and the support should continue throughout the whole of a car’s lifespan. By providing a service for Jaguar classic models, Unipart manages the whole-life of the vehicle providing parts and specialist customer support and promoting the brand on vehicles such as the Jaguar E-Type.
New vehicle launches need a high standard of accessories and parts support and this needs to be planned well in advance. For example, the Jaguar C-XF, which won ‘star of the show’ award at the Detroit Motor Show, will be generally available in the first quarter of next year. Work has been underway for the last two and a half years with Jaguar to ensure high levels of parts availability to underpin the car’s debut.
A focus has been placed on reducing lead times between the national distribution centre in Coventryand regional warehouses across the world. Around 40 per cent of the parts shipped are destined for the US, which is serviced by two warehouses on either side of the country.
After ‘September 11’ a lot of deliveries were getting held up at ports. At first supplies were diverted to the US via Canada, but that was not satisfactory in the long term, so we set about gaining Customs Trade Partnership Against Terrorism (CTPAT) accreditation.
Now materials can be fast tracked through US customs which has allowed a significant reduction in lead times to this key market. Radio frequency identification tags have been used to speed container traffic through ports, cutting two or three days off the process in the UK and in New York by using tags to send manifest information at dockside security checks.
Transparency of information is essential to all of this. Several years ago our mainframe systems were replaced with an SAP enterprise resource planning system to give us a single version of the truth. Coupled with our own customer relationship management system and web-based catalogues and parts ordering, information handling across the business has been streamlined.
Ten to zero system
But transparency doesn’t stop there, it is key to our business relations too. For instance, a ten to zero system has been instigated with suppliers which involves identifying ten key aspects of our relationship with each supplier scored from ten to zero. The aim is to reduce the score in each area to zero by working together to the benefit of both parties.
With over 60,000 stocked parts to manage, reducing waste and taking inventories out across the supply chain is a top priority. Unipart Logistics has over 20 years of practical experience of implementing lean across the supply chain and has developed a unique philosophy of working embodied in The Unipart Way. This process is underpinned by a number of lean tools and techniques that allows us to improve quality and customer service whilst reducing costs and remaining flexible enough to relish the challenges that business volatility brings our way.
But continuous improvement never stops. A future focus will be on encouraging dealers to pre-diagnose the vehicles they are servicing or repairing and to place orders immediately with a preferred delivery date in order to improve availability and reduce the inventories they need to hold. To further streamline the process we are also looking to deliver all parts for a particular repair job together direct to the workshop, by-passing a dealer’s parts department.
Mike Varnom is director and general manager, Unipart Aftermarket Logistics. Email email@example.com