tips to thrive in the aftermarket!

Transcription

1 4 tips to thrive in the aftermarket!

2 AFTERMARKET: A NEW BUSINESS MODEL TO DEVELOP The aftermarket: A fast-changing environment E-commerce is rewriting the rules of the market and 3D printing is set to disrupt the entire ecosystem. The spare parts industry has to adapt to new customer expectations. This new model represents a real opportunity if you incorporate concepts such as mobility, transparency and service. The goal is to be closer to customers and more responsive, with increased delivery frequency and a new approach to inventory management. Dynamic logistics optimisation is a key component of rising to the challenge of Aftermarket 4.0. Bruno Constans, Marketing & Innovation Director GEFCO THE AUTOMOTIVE AFTERMARKET IS A COMPLEX SECTOR WITH A WIDE RANGE OF PLAYERS: AUTOMAKERS, PART MANUFACTURERS, DISTRIBUTORS, STOCKISTS, SPECIALISTS, AUTO CENTERS, AUTO REPAIR SHOPS AND E-COMMERCE BUSINESSES. There are 3,000 spare parts manufacturers and 7,000 distributors (1) in the European Union. According to a McKinsey (2) report published in summer 2017, the aftermarket is set to grow by about 3% annually worldwide through Yet 42% of suppliers expect their service and maintenance business to decline in profitability over the next decade. Given this situation, logistics is set to become a key competitive advantage. Spare parts distribution networks were hit hard by the crisis but are now returning to growth. This trend will only take hold if retailers continue to redesign their processes using a customer-centric approach. E-commerce and digitalisation have led to massive changes in consumption habits in our everyday lives. You may be inclined to believe that because your customers are professionals, these far-reaching changes don t affect you. That s not the case. Like all sectors, the aftermarket has been profoundly impacted by emerging consumer habits and expectations. We re all consumers. Amazon has set new standards for transparency, service and efficiency from which the spare parts market is obviously not immune. In order to keep your promises, you have to react faster, more responsively and more accurately concerning the information provided to your customers and demonstrate boundless agility. Consumers rising expectations, omni-channel sales, new car technology, preventive maintenance and the new mobility experience are disrupting the automotive aftermarket. (1) Source FEDA 2017 ( (2) 2

3 1 THE GEFCO S VISION: TRACEABILITY IS VITAL! The challenge of the aftermarket is proximity to end customers. What goes on behind the scenes doesn t matter to them they just want their part as quickly as possible. Overcoming this challenge requires increased delivery frequency (up to 3 shifts per day), local inventory, short transit times and continuous optimisation of storage space. Each minute saved at each step in the process is important. Sharing information and real-time tracking have become standard. Without traceability, it is impossible to develop vital trust-based relationships with customers. Arnaud Levilain, Optimisation and Engineering Manager, GEFCO Be customer-centric SPARE PARTS MARKET IS MULTIDIMENSIONAL BY DEFINITION. ON A VERY BASIC LEVEL, DRIVERS INDIVIDUALS AND PROFESSIONALS ALIKE NEED THEIR CARS. WHATEVER REASONS THEY MAY HAVE, THIS NEED IS WHAT MATTERS MOST. All the stakeholders in the value chain from the manufacturer of the part to the mechanic responsible for its installation must be driven by a single purpose: meeting the end customers expectations. As such, the aftermarket is much more than just getting a part from point A to point B. This promise is multifaceted and each link in the chain must focus on: enabling professionals to meet their commitments simplifying the exchange of information between all stakeholders identifying and segmenting your customers needs anticipating and planning maintenance and service operations using predictive technology returning vehicles to employees in the shortest amount of time possible allowing mothers and fathers to pick up their children from school on time Everything hinges on responsiveness and transparency. To win this fast-paced race against time, it is essential to provide levels of service that match the priority level of each situation. Delivering spare part orders is an integral part of the promise you make to your customer. Linear deliveries scheduled once every 24 hours are no longer compatible with today s needs. Each type of part and each situation has its own degree of urgency. Customer delivery options are crucial: Delivery within 2 hours of ordering Order in the morning delivery in the afternoon Order before 6 PM overnight delivery, the following morning or afternoon Order before 6 PM time-definite delivery Comprehensive delivery options guarantee that you uphold your promise to your customer! 3

4 2 HOW TO DEAL WITH PROXIMITY STORAGE AND COST OPTIMISATION? Synchronizing data flows between the Warehouse Management Systems (WMS) and Transport Management Systems (TMS) helps to streamline the storage, transport and delivery of spare parts. No matter which technical system you use, you have to remain focused on adding value for customers. Implementing dynamic network design is key to improving the customer experience and optimizing costs in the aftermarket. Arnaud Levilain, Optimisation and Engineering Manager, GEFCO Extend your logistics network to get closer to your customers DRONE DELIVERY IS NOT YET COMMONPLACE. AND IT S A FACT THAT THE MINIMUM TRANSIT TIMES AT THE BEST COST IS KEY. ONCE THE PROBLEM IS CLEAR, YOU CAN FIND THE RIGHT OPTIMISATION SOLUTIONS. We have entered the era of data, a wealth of information that can be used to streamline logistics. Details from past orders can be studied to select improved storage sites for spare parts. The wider the network, the shorter the distance to the delivery destination. This reasoning also applies to the physical management of inventory. Make sure that the most commonly ordered spare parts are always available, but also optimise storage to limit handling operations. This will give you a leg up on the competition. Data analysis helps organise storage and supply in a predictive manner, by anticipating, foreseeing and adjusting to what s to come. There are key insights to be gained from your Customer Relationship Management (CRM) systems especially order histories from various customer profiles and vehicle data. Knowledge of your customers and their needs will lead to more efficient logistics. 4

5 3 Storage & Distribution: Synchronisation is the answer! Connectivity is omnipresent. When used properly, it can deliver extraordinary improvements. ACCELERATING TRANSIT TIMES TO IMPROVE THE SERVICE PROVIDED TO END CUSTOMERS AND SAVING SPACE TO OPTIMISE STORAGE COSTS. ONCE YOU HAVE SET THESE TWO PRIORITIES, YOU HAVE TO DO EVERYTHING IT TAKES TO MEET THEM. Connectivity is omnipresent. When used properly, it can deliver extraordinary improvements, especially in logistics. Real-time inventory management is not particularly revolutionary. However, cutting-edge technology such as the Internet of Things (IoT) and Radio Frequency Identification (RFID) are able to provide truly granular data. Inventory levels are accurate down to the last part and flows are tracked and analysed in real time so that logistics providers and customers know right away whether a product is available and the time required for its delivery. Better still, connected vehicles are being paired with predictive analysis to anticipate demand. This enables us to reduce friction in the supply chain and stay ahead of customers needs. Methodically tapping into these technological benefits requires a complete and detailed evaluation of your existing practices, to determine which projects to undertake first when redesigning your distribution processes. Clearly, the Holy Grail is to synchronise storage and distribution. Storage immobilises assets, takes up square footage and is expensive. By taking a smarter approach to synchronizing transport and logistics, you optimise inventory levels and shorten transit times while also reducing costs. 5

6 3 A GEFCO expert s opinion 3 questions for: Éric DESSUPOIU, Group Warehousing Manager, GEFCO Dynamic optimisation improves results WHY IS IT IMPORTANT TO CONTINUOUSLY OPTIMISE STORAGE PROCESSES? Reaching a high level of service quality is not an achievement in the aftermarket. It s the baseline. And the answer is not just continuous inventory optimisation. It s an ongoing quest to improve all processes, from ordering to delivery to the end customer. This holistic approach is crucial to preparing orders as quickly as possible and ensuring that as many trucks as possible depart on time with optimal loads. WHICH INDICATORS ARE THE MOST IMPORTANT TO MONITOR? You have to look at the number of SKUs per square meter, the rate of parts served by the following cut-off, the truck departure rate for each delivery shift and of course, the percentage of orders successfully delivered to customers. The most important aspect is your ability to manage your performance in real time. If you have a 99% on-time delivery rate, that might seem like a great achievement. But if you process 1,000 orders per day, that means 10 dissatisfied customers in a single day! Our aim is to truly achieve excellence in order to meet our customers expectations. WHAT DO YOU SEE AS THE MAIN PITFALLS TO AVOID? The main mistake is to think that there is no more progress to be made. You have to constantly re-assess what you ve set up in order to continue on the path to improvement. The amount of data available is growing day by day and we can use it to help part manufacturers and automakers predict seasonal peaks and other trends. A player like GEFCO views itself as a partner and not just a logistics provider. At GEFCO, we believe in the concept of extended enterprise and infinite proximity. By working together, we can ensure that the aftermarket value chain meets the expectations of drivers, who must always remain the key link. 6

7 4 SHARED LOGISTICS AND DISTRIBUTION: AN ECO-FRIENDLY OPTION! Pooled distribution is already a reality in some business sectors, such as retail and Fast-Moving Consumer Goods, as well as among some car manufacturers. Sharing a local logistics center makes sense for streamlining costs and resources, but nonetheless represents a revolution in mindset. There is another advantage that concerns us all: carbon footprint. Shared distribution is environmentally friendly. That fact alone should be enough to take the discussion forward. What about trying shared logistics? IF YOU ARE LOOKING FOR OPTIMAL CUSTOMER SATISFACTION AND LOYALTY, THEN THE DISCUSSION TURNS FROM BASIC COMPETITION, WHICH OFTEN DESTROYS VALUE, TO COMPETITION THROUGH DIFFERENTIATION. SHARED LOGISTICS OFFERS A SOLUTION TO YOUR NEEDS. Unity is strength! Shared logistics solutions can often provide better service to end customers, without stifling healthy competition. Some leading automakers have already taken steps towards pooling logistics to meet the demand for frequent deliveries in large-scale distribution networks. Increasing the number of logistics centers reduces transit times but each logistics center incurs operational costs that are only justified if there is sufficient volume. Sharing a local logistics center offers a garage replenishments solution with faster delivery at a lower cost. If you fulfill the requirements adequate data being the most crucial component shared logistics could be right for you. Arnaud Levilain, Optimisation and Engineering Manager, GEFCO Establishing multi-brand or multi-automaker storage centers increases logistics efficiency and lowers costs. At the same time, it also requires a major change in mindset more focused on the end benefit for customers than on beating the competition. 7

8 Aftermarket : new challenges, new solutions 4 MAJOR CHALLENGES New business models to be invented To be more efficient, be innovative. Market fragmentation and acceleration There is a growing number of stakeholders in the value chain you have to stand out from the rest. Delivery: keep your promises Real-time, transparent information is the keystone of delivery. Be customer-centric Drivers have a special bond with their vehicles. Make sure you are seen as a trustworthy stakeholder. 4 SOLUTIONS Market intelligence and creativity Constantly apply all the means at your disposal to understand and predict customers needs. Rethink your logistics organisation There are three key ingredients to the formula: optimise, optimise, optimise. Increase your logistics coverage To accelerate your delivery frequency at the lowest possible cost. Manage returns Optimise the flow of spare parts in both directions by ensuring end-to-end visibility for all stakeholders in the value chain. GEFCO S SOLUTIONS > No restrictions on shipment size or weight > Synchronised logistics and distribution for all your products, including hazardous and/or sensitive goods > Faster delivery: products arrive at your customers doorstep within between 30 minutes and 12 hours GEFCO IN FIGURES 10,000 daily delivery points 99.7 % on-time delivery rate 47 countries served 69 years of experience 8

9 GEFCO. Partners, unlimited At GEFCO, we believe long-lasting cooperation with partners is the key to shared growth. Building on 69 years of expertise and a strong heritage in the automotive industry, we design smart, flexible solutions for complex supply chains. Today, GEFCO Group is the N 1 European leader in finished vehicle logistics, and a top 10 global partner in multimodal supply chain solutions. With 300 destinations across five continents, GEFCO s global network of experts push back boundaries and respond with agility to the most demanding supply chain challenges. GEFCO s aim is to play an innovative and influential role in supply chain transformation to help customers meet their evolving technological, social and environmental challenges. The Group is proud of its ability to nurture innovation internally and with external partners to offer pioneering solutions in line with changing industry needs. Contact us Crédits photos : istock, Shutterstock. aressy.com - 06/