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Inventory Management and Dealer Forecasting in the Automotive Industry

Posted on July 7, 2019 in Uncategorized

Automotive dealers have a number of objectives to meet with respect to stock levels. These include maintaining the right level of stock inventory, minimising stock holdings, keeping stock costs to a minimum and maximising efficiency in stock use. A consistent ordering process reduces business pressure to meet stock levels and allows dealers and distributors to manage the exceptions to stock levels as opposed to moving from one crisis to the next.

Without an efficient forecasting process in place a dealer will simply aim to minimize stock holdings. However, if dealers are not forecasting correctly, stock levels will be incorrect. There are obvious inventory costs in holding too much stock but at the same time, too little may require emergency orders. Dealers who require such emergency orders bear not only higher costs of stock purchase but also increased freight costs. In addition, dealers have traditionally decided not to order extra stock because, in the event that the dealer is unable to move that stock within a reasonable time frame, there may be a higher cost of managing and warehousing inventory.

An efficient forecasting system assists both the distributor and dealer to reduce costs by providing a consistent, predictable and reliable basis for stock inventory. There will always be unforeseen circumstances, but these can be managed as exceptions as opposed to normal business processes.

Distributor versus dealer forecasting
A new system, pioneered and functioning well in Europe, gives distributors, rather than dealers, ultimate responsibility for forecasting stock requirements. By analysing trends in stock ordering across all dealerships, the distributor is better able to forecast, taking a broad view of requirements, predicting the expected stock requirements of dealers and advising accordingly. For example, following the release of a new vehicle model, patterns may emerge in high volume metropolitan locations. These then provide valid information on trends as the volume increases in other locations, such as in country areas. The distributor can advise or make certain components compulsory when a new dealer starts up or a new model is introduced into a new area.

Under this new system a dealer is obliged to purchase a certain level of stock because the distributor wants to ensure that a dealer has a basic set of components for a particular vehicle model that will cover most situations. Distributors understand, through trend analysis, the frequency with which components will be used and are in a position to advise dealers about the components that are to be maintained.

There has been slight, initial resistance from the dealers in the implementation of this system. The major issue has been that the distributor is basically instructing the dealer as to the stock that has to be purchased. However, as the distributor now accepts a greater risk by allowing the dealers to return unused stock within an agreed period or to increase or in some circumstances reduce quantities, resistance has been greatly reduced.

The advantage to the dealer in agreeing to those recommendations is that many dealers today would not stock all the recommended parts due to the cost of maintaining inventory and the fact that it could not be returned to the distributor if it was not used over a given time. Essentially, the dealer manages the inventory risk and their behaviour reflects that risk.

Free flow of information within the network
The key to successful dealer forecasting is the free flow of information between the dealer and the distributor. Dealers provide information about their current stock levels and the demand for stock items and the distributor can understand the stock patterns that the dealer experiences. In a well functioning dealer forecasting system most of the risk of maintaining inventory is with the distributor, not the dealer.

The distributor has a broad visibility of stock levels across all dealerships and in certain circumstances it is possible to open up the visibility between all dealerships. A dealer enquiry for a part can reflect both the distributor stock and the dealer network stock. Generally, a dealer will be able to see only the distributor stock and if that has been exhausted, a dealer may be allowed to view the rest of the stock. Distributors encourage dealers to buy from the distributor first, and then buy it within the network. When buying within the network the supplying dealer accepts the order and is credited from the distributor. The receiving dealer is charged for the stock from the distributor. The distributor can then monitor the demand between the two, and adjust the system for that demand later on. The distributor can then analyse whether a dealership is using more of a particular stock than expected, and can adjust the dealer’s forecast accordingly.

Contingency for emergency orders
The primary goal in any stock control process is to reduce emergency order frequency. An efficient warehouse process, where dealers place more stock orders and less daily or emergency orders reduces pressure on the entire distribution and dealer network. The dealer forecasting system, together with an optional distributor buy-back strategy, goes a long way to achieving this.

Dealers are encouraged to stock a greater range of parts, based on the analysis gained from a consistent forecasting process so that they can fulfil their customer requirements efficiently and cost effectively. The distributor gains the benefit of knowing where parts are located throughout the dealer network and a more efficient warehousing operation.

There are some quite significant benefits to both distributors and dealers of a dealer forecasting system. Distributors and dealers in Europe that have engaged this model are experiencing significant upside to their business and are now more able to meet customer requirements as well as having a more consistent and predictable inventory process.

The free flow of information between the distributor and dealer is enhanced with a dealer forecasting system. Distributors understand the amount and frequency of all stock requirements in the system. There is an ability to move stock using both the distribution and dealer network. The dealer however has reduced risk in stock holdings and so is more likely to retain a greater variety and number of parts to satisfy customer needs.

Summary
Consistent and predictable information flow between a distributor and a dealer can be achieved through an efficient forecasting system. A distributor, having access to a broad view across all dealers, can provide in depth analysis of stock usage, inventory and future stock requirements. A distributor is then able to provide accurate advice to dealers on the type, amount and availability of stock required based on factual data.

Cost reductions throughout the supply chain process are realised for distributors and dealers through a more streamlined forecasting system. Facts can dictate how much stock is required across the entire dealer network and the expected usage rates by each individual dealer. Total stock inventory is reduced, availability immediately known and the ability for the distributor to deal with emergency orders is greatly enhanced. For both the distributor and dealer, inventory and warehousing costs are reduced while a reduction in frequency of emergency orders results in less freight and delivery costs.

Secure, Managed File Transfers for the Automotive Industry

Posted on July 6, 2019 in Uncategorized

Automotive manufacture is an area where Managed File Transfer really shines – in creating a solid transfer system, from production line, to sales floor, a company can produce unified results and create an environment of innovation and confidence, without the need for costly systems, projects or workflow management – MFT accomplishes all of these elements easily.

From Design to Production

When designing a car, or, even part of a car, it’s important to be able to collaborate as seamlessly as possible – that way, ideas won’t be lost in the rush of losing the moment to waiting for FTP to come back online – and teams can see who is working on what, when – ensuring that there are no missed developments or integrations into the design while the document is checked out. MFT also ensures that there is a full audit string to rely on should the need arise. This gives full transparency without stifling the creative process – which is essential to foster innovation and support the creation of better technology.

Production to Manufacture

Manufacture is a key area where MFT can help businesses increase workflow and productivity, and build a system around the best that technology can offer. MFT allows the distribution of plans, designs and technical specs over geographically distant locations – allowing for the best choice of locales based on budget, and quality. These factors can make the difference between creating a great product with a diversified manufacture process. MFT can also facilitate working through problems that arise from manufacture process, such as delays or the collapse of the company you subcontracted. It’s important to ensure that your agility matches your company’s needs however, which is why the auditing and workflow processes built into most MFT servers can ensure that you’re always protected, without overextending resources to set up with various companies.

Once the various parts and components are produced, MFT can support the group building and finishing the product, allowing for any changes that come up due to advances or technical / compliance needs to be met, without derailing the whole project. Managed file transfer can be the vital link in the chain allowing your company to meet and match the growing need to keep up with compliance without stifling progress or innovation.

Sales is Easy

And at the sales end of your production, rely on managed file transfer systems to support invoicing, sales, parts and more – each component in the consumer facing element of your company supported, logged and managed by easy file uploads, with security and easy access. Whether your product is being sold at a franchise you own, or an independent specialist, MFT can bridge the gap between big systems and tiny operations without compromising the internal structure of your company, allowing your motor vehicles to be available, whenever, wherever.

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Using the Best Specialty Mailing Lists for Automotive Industry Dealers Marketing Efforts

Posted on July 6, 2019 in Uncategorized

There are several specialty mailing lists available for the automotive industry to increase sales. Automotive dealer marketing efforts will continue to be successful if the correct lists are selected. Direct marketing will continue to out perform any other form of advertising including newspaper, radio and even social media. Selecting the correct list will give automotive retailers the advantage by permitting them to target specific audiences that would be interested in your specific vehicle.

These are the Best Specialty List Options for Automotive Retailers:

Exact Credit Database – this file allows auto dealers to select individuals with an exact credit score, which aids in sending out special offers dependent on certain credit levels. You can also select based on an individuals auto loan or lease is expiring. This allows dealers to time their advertisement perfectly just as their loan or lease is up.

Automobile Database – this list is extensive in the type of automobile each household owns. Dealers have the ability to select by exact year, make and model of the vehicle within the household. Dealers can target households that would be interested in their vehicle offer by targeting people who own competitive make and models.

Saturation Mailing List – dealers often want to target everyone in the area within a specific distance of their dealership. This file will ensure they are getting their mail piece into every household within a specific distance of their location. They also have the option of selecting an average income in each neighborhood.

Newly Married File – marketing to newly married couples is a great way increase automotive sales. Newlyweds are known to spend more money when recently married and combining their income for more purchasing power.

Business Fleet Database – dealers can greatly capitalize on targeting business owners that require a fleet of vehicles in their operation. Landing just one business who has a fleet of 20 or more vehicles can become a large revenue maker.

Bankruptcy File – this allows dealers to select people who have just been released from their bankruptcy and are ready to start rebuilding their credit.

Using these best mailing list options and focusing your marketing message correctly will help increase your sales and customer base. Anytime you are planning to buy mailing lists, be sure you have your marketing strategy completely planned out. These are only a few of the automotive choices available. You always want to be as specific as possible when creating a targeted list. It is essential to put the time and thought into creating the best mailing list and even spending a little more on a more accurate database.

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