June 2015 | Commentary | 3PL Line

It's Time for an Automotive Aftermarket Logistics Tuneup

Tags: 3PL, Supply Chain Management, Partnership, Cross-border Trade, Logistics, Third-Party Logistics

John Costanzo is President, Purolator International, 888-511-4811

In automotive repair shops across the country, demand for older model parts is matching demand for newer model regular maintenance parts. This is because the average vehicle on the road today is 11.4 years old, and expected to reach 11.7 years by 2019.

The result has transformed the aftermarket industry. Aftermarket SKUs are estimated in the millions, with original equipment manufacturers introducing 80,000 unique part numbers each year. Understanding how to manage inventory that large is vital to success.

This change comes at a time when other factors are putting pressure on aftermarket supply chains, including:

  • Expectations of shorter lead times.
  • Spotlight on quality, as parts recalls cause demand for quality control.
  • Parts complexity, as electronics and robotics require development of aftermarket parts and services.
  • Growth of hybrid and electric vehicles, which include unique parts and maintenance systems.
  • Increasingly global supply chains.

These challenges highlight the need for aftermarket businesses to take stock of existing supply chain processes.

The first step is to conduct an in-depth assessment of current needs and priorities. Does your supply chain include cross-border transactions? Do you have different warehousing needs? Are you able to meet customers' expectations with existing logistics solutions?

Next, consider your logistics partner's capabilities. As business needs change, is your partner adapting? Consider:

  • Service customization. An ideal logistics partner offers an individualized plan based on your specific needs, rather than a one-size-fits-all approach.
  • Innovative solutions. A provider should offer forward-thinking options, and back them with results.
  • Customer service. A quality logistics provider assigns a team of customer service professionals to work directly with an aftermarket business. Often agents solve a problem before the client knows the problem exists.

Stay Up to Date

It's important to stay innovative with supply chain practices. For example, route optimization software helps companies better manage distribution networks. The process calculates the most efficient service option, maps out direct routes, and matches available trucks and drivers. Some logistics providers do not offer route optimization in the normal course of building solutions.

Consolidating shipments is another source of efficiency that can reduce freight costs by as much as 10 percent. A consolidated shipment can cross borders as a single unit, reducing clearance wait times and fees. Once across the border, a consolidated shipment can be sorted and directed to appropriate distribution channels.

Aftermarket supply chains also benefit from smarter approaches to warehousing and distribution. Collaboration is becoming an increasingly common trend, as aftermarket players realize the efficiencies of combining forces with other businesses—sometimes even direct competitors—for greater efficiency.

Tremendous opportunities exist for aftermarket businesses to benefit from the innovations taking place in supply chain management. These changes come at an exciting time, as the aftermarket adapts to growing SKU inventories, globalized supply chains, increased performance demands, and a host of other pressures. One key to operating an optimal supply chain is making sure you have the right logistics partner for the job.

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