Sometimes it is cheaper to order spare parts directly from the factory, sometimes through a regional dealer and sometimes it is cheaper to store them elsewhere. The Dinalog Conversion Factory investigated the best solution for your company. The result is a practical tool that is now available for all companies with multiple locations and multiple suppliers.
This tool was developed in cooperation with Care Autoschade.Care Autoschade has more than 70 locations throughout the BeNeLux and it uses hundreds of thousands of spare parts a year to repair all the damage to vehicles. Care ordered these spare parts from local dealers who, in turn, placed their orders with regional warehouses. Care Autoschade wondered if this could be organized better and more cheaply. The study was undertaken by the Dinalog Conversion Factory together with Eindhoven University of Technology. The result is a tool that is useful for all companies with multiple locations and who place their orders with different companies.
A critical look at the purchasing process
In the original situation, the local dealers ordered the required spare parts independently from the regional warehouse. To check the efficiency and total cost of ownership of the distribution logistics and purchasing strategy, Care wanted to know when it was beneficial to purchase through another route to achieve a purchasing and distribution advantage.
Cross-docking, leverage buying and more besides
The tool that has been developed calculates the best way to order spare parts. Some product categories are best served with a cross-docking facility with the help of a logistics company, delivering a better service for the customer and making more efficient transport possible. Other goods were better purchased in bulk, through which significant cost savings through leverage buying could be achieved. The research has provided the Care Autoschade management team insight into the impact and consequences of another purchasing and distribution structure.
Jolt suppliers into action
Following a critical analysis of the current complicated purchasing system, Care decided to try an entirely different approach, replacing the coordination of many purchasing flows with a simplified method. Care currently works intensively with about 50 preferred contract partners. The dealers now have all the purchase details at their fingertips. This transparent approach has increased good healthy competition. Care: “This purchasing method has delivered savings, but at the same time it has also strengthened our relationship with our preferred suppliers”.
Generic tool available now
The software module that was required for the calculation of which spare parts were most cost-effective when ordered upstream, was developed on the basis of Dinalog Conversion Factory research. This software is available for all companies that have multiple locations and a diversity of suppliers.
The tool and extensive user instructions and description are available from Dinalog.
For more information on the conversion factory Coen de Lange firstname.lastname@example.org
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