Simplifying SpAre pArtS plAnning And diStribution
Industry Automotive Revenue rs 90.49 billion (uS$1.93 billion) Employees more than 2,500 Headquarters pune, india Web Site www.bajajauto.com SAP® Solutions and Services SAp® erp application, SAp Service parts planning for Automotive package Implementation Partner Hewlett-packard india Sales pvt. ltd. Key Challenges • improve spare parts availability • improve customer service level • reduce high levels of spare parts inventory • improve safety stock calculations • eliminate manual planning process • improve ability to handle increasingly complex spare parts planning and distribution Why SAP Was Selected • Ability to meet core business needs • Ability to handle both distribution and inventory management • ease of integration with existing SAp® erp application • Configurable and reliable solution • best fit based on evaluation criteria • Successful demonstration of solution concept Low Total Cost of Ownership • tightly managed, well-defined project scope • on-time, within-budget implementation • Simplification of existing it landscape • minimal support infrastructure required • no dedicated maintenance support staff required
bajaj Auto ltd., the flagship company of india’s bajaj group, is the world’s fourth largest manufacturer of two- and three-wheeler vehicles. its manual process for planning and distributing spare parts was inefficient and could not handle growing complexities. After implementing SAp® software, baja Auto’s planning and distribution process became more streamlined, leading to improved spare parts availability and greater customer satisfaction.
Implementation Best Practices • used proven methodology to define project road map • limited initial pilot project to a few items • Applied learning from pilot implementation to subsequent phases • ensured tight collaboration among corporate it, operations, and marketing • performed in-depth gap analysis with SAp erp based on mapping solution Financial and Strategic Benefits • Achieved payback on investment • gained higher share of spare parts market • improved spare parts inventory management • Achieved greater customer satisfaction through improved parts availability • eliminated cumbersome manual planning process • gained higher vendor engagement level • gained access to timely and accurate prepacking data • improved ability to react to changes in demand throughout the supply chain
Operational Benefits Key Performance Indicator Spare parts availability forecasting accuracy in domestic market productivity of production planning controllers inventory obsolescence rate
Impact +35% to 40% +40% +80%
Service level to export market +45% to 70% greatly reduced
SAP Business Transformation Study Automotive
“The SAP software has helped us cope with complex planning and distribution for domestic and export markets. It has also helped us increase sales and reduce the stress associated with manual methods.” Rajib Kumar Jena, Senior manager, management information Services, bajaj Auto ltd.
Managing Complexity in Spare Parts Planning
bajaj Auto ltd. is india’s largest manufacturer of two- and three-wheeler vehicles. Spare parts distribution, critical to the servicing of the vehicles, is handled through a network of 400 dealers and 15 distributors. Spare parts are distributed from four warehouses that are strategically located across the country. the process that bajaj Auto was using to manage the supply of spare parts across the distribution network was inefficient, did not produce accurate results, and was unsuitable for the increasing complexities of distribution. to keep track of its safety stock, amounting to over 14,000 different items, the company was using a cumbersome manual process that was neither timely nor accurate. And lack of visibility of order status resulted in inventory problems at sales outlets because needed items didn’t always get...