Operating a commercial vehicle is all about up-time, and MAN has come up with a radical solution to improve spare parts availability to its dealers.
Christian Seemann, vice president supply chain management parts, MAN Truck & Bus AG explained the strategy to delegates at the Logistics & Supply Chain conference this morning.
MAN’s solution beat off competition from companies of the calibre of Shell, John Lewis and Sky to take the overall award in the 2016 Supply Chain Excellence Awards.
Seemann explained how MAN has transformed its parts supply chain to give best in class performance using a strategy entitled “[email protected]”. MAN’s initiative to re-shape its spare-parts supply network, meant that it, rather than the dealers, would take responsibility for the planning and supply of spare parts to the dealerships. The plan would require the dealers to have the utmost level of trust in MAN’s ability to correctly predict demand for parts at the sharp end, within the dealerships themselves. The upshot was that MAN would manage the inventory held at each and every dealership. The dealers would need to be absolutely confident that their customers would not be let down.
The over-arching idea was to reduce the ‘bullwhip effect’ across the spare parts supply chain by gathering big data volumes from all the locations involved to create a holistic view of inventory needs.
Seemann pointed out that it was vital to have all the information about all the stakeholders in the network. You have to be aware of what your partners’ strategies are.
Private capital dealers account for two thirds of total dealer network, so it was essential to get their support. Wholly-owned service operations account for the other third.
In 2015 MAN rolled out the system in Germany with 145 dealers and last year it started on the integration of service partners in Europe.
The results have been dramatic: [email protected] has had a massive impact on improving availability. “Dealers told us it has had a high impact on customer satisfaction,” Seemann said.
Not only has it exceeded its availability targets – the system has given MAN best in class performance. Not only that, almost a quarter of VORs were eliminated.
The system is now being rolled out across the rest of Europe, and the UK will be one of the countries to get the new system in May of this year.
But it doesn’t stop there. Seemann said MAN is now looking at its planning process, moving from planning on a historical basis. The next step is prediction of spare part demand, using telematics to provide information directly from the vehicles.
This is all about big data – finding the right prediction method to give even better up-time on the vehicle. The vehicle could tell the driver that he needs to replace a brake pad within then next two hundred miles. It could even book the vehicle into the dealer.
In the second session of the morning Alastair Charatan, supply chain director at SIG Distribution focused on Supply Chain Transformation, in particular building and executing an integrated supply chain strategy.