Logistics improvement:A case study of automotive part distribution

Abstract

Spare parts distribution is one of the key processes in after-sales services of the automotive business. Nowadays, many automotive manufacturing companies are focusing on improving their after-sales services to gain higher competitive advantages over their competitors. Therefore, the after-sales business needs to improve continuously to provide better customer services. The case study company targets at improving its after-sales business processes every year to retain a high position in the market. At its service centres, vehicle downtime (i.e. breakdown and wait until the repair is completed by the service centre) is used as a key indicator to measure customer satisfaction rate. Currently, the vehicle downtime of the service centres is reported quite unsatisfactory due to unavailability of the required spare parts. Hence, after analysing the root causes of the problem, the after-sales service department comes up with an innovative idea of using night-time delivery service instead of daytime to improve the parts supply service. The result shows that the spare parts waiting time of the service centres is reduced around 124 hours per day and also resulting in 35% reduction of the transportation cost. In addition, the number of transportation routes is reduced from 11 to 5 routes.