In the past, trying to decide what part numbers will create the best inventory to offer your customers was not only tedious and slow, but something akin to peering through a broken crystal ball. It can be tough to predict what part numbers will be needed most when the customers call. That murky, mysterious process is now a thing of the past for customers and members of the Uni-Select USA distribution group thanks to its eModeling system, first developed in 2006.

Uni-Select USA was recognized for its eModeling solution as one of two winners of the Fifth Annual Polk Inventory Efficiency Awards, presented at the 2009 Global Symposium last month in Chicago. The award was designed to recognize and reward outstanding automotive aftermarket companies for process improvements relative to inventory efficiency.

Uni-Select was the winner in the Retail/Distribution category. Gates Corp. was selected as the winner in the Manufacturing category.

"In addition to publicly recognizing companies that are successfully investing in process improvements relative to inventory management, the value of the Polk Inventory Efficiency Award is simply to highlight a major issue we are facing in the aftermarket – high levels of excess inventory and our ability to manage that inventory effectively throughout the supply chain," said Mark Seng, vice president, aftermarket and commercial vehicle for Polk. "As vehicles become more complex and include more sophisticated technology, the number of parts needed to service these vehicles increases. Knowing which parts need to be stocked where and – once on the shelf – managing that investment effectively is critical to the aftermarket’s success. Polk’s intention with the award is to drive best practices and encourage knowledge sharing across the industry in order to increase the aftermarket’s ability to attack this critical issue."

 
According to Rick Williams, director of Store Inventory Modeling for Uni-Select USA and lead manager on the eModeling project, the system was originally built for Uni-Select USA’s independent jobber customers. However, the program has been so successful it’s now used internally as well.
 
“First and foremost we allowed the customer to pick where they want their demand from,” said Williams. “They can pick from multiple warehouses or the entire company; there’s a lot of flexibility there. The next thing we did in addition to that pick, is to offer part numbers based on vehicle registrations in that market – numbers not already included that they might want to consider.”
 
Building upon that basic wish-list of information, Uni-Select added on other key features, such as store quantity and stock levels, warehouse and store demand and the ability to upload information up and down the system without any keypunching. And, the entire system resides on the Internet. All of the information is available in real-time and there’s no software to install and update.
 
“All this stuff is meaningful because now the user is looking at his own inventory and it gives him all the information needed to make a good, intelligent decision,” said Williams.
 
While the system was primarily based on customer feedback, Williams said he used his own experience spending a quarter of a century behind the counter to help shape the functionality and ease of the program.
 
“I spent 25 years as a store/district manager prior to my current position and struggled with these same issues,” said Williams. “It’s exactly what I’d want if I was in their shoes. We solicited feedback from customers. It was all built from their perspective.”
 
When asked how quickly Uni-Select started to see results from the program, Williams said the positive feedback was immediate. However, within nine months of building the system and using it corporate-wide, Uni-Select had identified $12 millions in returns.
 
“That’s a pretty big statement,” Williams remarked.
 
As for Gates Corp., the other winner of this year’s Polk Inventory Efficiency Awards, the beauty of its inventory management solution comes from its simplicity. Gates’ winning solution — an electronic ‘kanban’ system — was based on the highly successful kanban system at Toyota, where Tim Conrad, Gates’ director of global supply chain integration, worked for many years before joining Gates. Kanban is a just-in-time inventory control method that keeps inventories low by scheduling needed goods and equipment to arrive a short time before a production run begins.
 
For Gates, Conrad said the key to creating an effective system was eliminating the unnecessary complexity found in some other solutions.
 
“What we wanted to do is move away from trying to manage inventory with a forecasting system and get into a replenishment type system where we could set target inventory levels based on the supply chain cycle and send demand signals back to the manufacturing plant at a logical intervals, a logical interval being a lot size for example,” said Conrad. “When you hit an order quantity, it creates a pure pull system so that you are getting exactly what you need when you need it.”
 
With Conrad at the helm, the system first set up in 2006, was developed by a group that included representatives from Gates manufacturing plants, IT people to write programming, planning staff and schedulers in the plant. All had a role or level of involvement in inventory management, thus, all should have a role in developing the right solution. Within 90 days, Conrad said, the company started to see results.
 
“When we launched our pilot project, with just a few products in one of our manufacturing plants, we saw improvement in inventory levels and in the quality in the inventory,” Conrad said.
 
The system is now used across the board at Gates plants in North America and in Europe. The plan is to launch the system at Gates plants in Asia as well.
 
While the improvements in inventory and the recognition of winning the Polk Inventory Efficiency Award were gratifying, Conrad said setting up the system was also helpful in providing management with hard data answers to their questions during this difficult economic climate.
 
“It was incredible timing for us as well,” Conrad said. “We had some management changes in the company and of course, when that happens they want to look at your inventory and talk about your current inventory philosophies and we were really in a position to answer their questions with facts and data.”

"Every year we learn that there are many stories out there that need to be told," added Seng. "Stories of companies that are attacking the inventory management issue with innovative solutions. It might be at the factory working on raw materials or WIP inventory. It could be at a warehouse or retail location. Some cases we see stories of collaboration between trading partners working to reduce inventory across the supply chain. The companies that are nominated for the award show measurable business impact in many areas of their businesses. It could be simply lower inventory levels but could also include successes in reduced cycle times, lower return rates or reductions in costs associated with managing the inventory. We have learned that there is no shortage of examples of aftermarket companies demonstrating out-of-the-box thinking when it comes to this crucial industry problem.”

In addition to the award presentation at GAAS, Polk Inventory Efficiency Award winners are also asked to talk about their projects at the annual Aftermarket eForum, which takes place in July.

To view videos about this year’s winners, click here.