Automotive Part Fulfillment
The OEM and aftermarket automotive parts supply chain has evolved from single location, local independent retailers, to national chains with thousands of stores to eCommerce only auto parts retailers offering tens of thousands of SKUs to consumers.
The ability to manage tens of thousands of parts and then the ability to deliver the right item to the right place at the right time is crucial. With increasing demand and competition, the challenges of high-volume automotive part fulfillment supply chains continue to grow.
The order fulfillment process for automotive parts is vastly different from other industries as there are specialized requirements regarding the handling, storing and transporting of these items.
What are some of the challenges that face automotive parts fulfillment?
Automotive parts offer such a wide variety of products from large door panels and bumpers to smaller wiring harnesses and replacement bolts and screws – all of which require specialized handling and packaging. As eCommerce and omnichannel fulfillment options continue to grow, these supply chain challenges become more complex for third party logistics providers to manage.
Due to the variability of SKU assortments across brands, efficient material handling solutions are critical to efficiently store and handle automotive parts. The use of traditional pallet racking, and shelving can be augmented with cantilevered racking for oversized materials and pick-to-light solutions for smaller high-velocity parts.
Automotive recalls can also dramatically effect order and individual part demand volume. Shipping a high volume of replacement parts to dealers and consumers can put short-term stress on the automotive part supply chain.Third party logistics providers can often provide flexible storage solutions and variable cost models to address these unplanned situations.
Why is accuracy so crucial for automotive part fulfillment?
Accurate order fulfillment is critical to the success of traditional brick-and-mortar retailers and eCommerce brands. The ability to deliver the right part on-time and in-full (OTIF) is crucial to the success of any supply chain. Ensuring all parts are barcoded will assist in this effort and support real-time RF scanning for optimal quality results. Focusing internal controls and service level reporting on accurate order processing saves money on costly returns, maintains brand integrity and makes your entire supply run more smoothly.
How important is the packaging and handling of automotive parts?
Automotive parts come in various shapes and sizes. These variations mean that your standard warehousing, fulfillment, and transportation services may not meet the needs of every product. Protection and presentation are the two primary keys for packaging and handling. Depending on the part ordered, certain precautions may need to be taken to ensure that it arrives undamaged. No matter the circumstances, having your products arrive safely and ready to use at the destination is essential.
Packaging is an important consideration from both a branding and product protection standpoint. If an order is going directly to a consumer, the packaging and presentation is essential. If an order is going to a retail outlet, the carton needs to be labeled properly to avoid potential chargebacks.
Why is supply chain flexibility so crucial in the automotive part sector?
The use of third-party logistic providers can provide brands with flexible facility and labor solutions to meet variable demand activity. Access to shared warehouses and cross-trained labor can provide automotive part manufacturers with flexible and cost-effective supply chain options. Moreover, when logistics companies can prepare for seasonal or promotional marketing events by leveraging communication, forecasting and planning, it drives improvements in order cycle time.
How vital is reverse logistics for automotive parts?
Reverse logistics plays a vital role within any supply chain. No matter how accurate your processes are, or your inventory is managed, mistakes will happen. Whether through human error in the warehouse, or a customer ordering the wrong part, getting the parts back into the fulfillment center can be a time consuming and expensive process.
A returned product doesn’t merely follow the fulfillment process backward; a return authorization needs to be generated, return postage must be paid, the parts must be inspected, potentially repackaged, returned to inventory or disposed. You need an efficient and defined processes for each of these workstreams to mitigate or optimize costs.
Automotive recalls can also dramatically effect order and individual part demand volume. Shipping a high volume of replacement parts to dealers and consumers can put short-term stress on the automotive part supply chain. Third party logistics providers can often provide flexible storage solutions and variable cost models to address these unplanned situations.
How should automotive part inventory be maintained and tracked?
With a high volume of SKUs, poor inventory management can have a dramatic (positive or negative) effect on the part suppliers bottom line.
Original equipment manufacturers and third-party brands must balance fill rate with a disciplined SKU assortment strategy to keep inventory levels as lean as possible. Item activity level reporting from a modern warehouse management system can proactively help brands automate its replenishment cycle time allowing for fewer days of inventory on hand. This active inventory management will also help your fulfillment provider keep its slotting plan up to date and enable more efficient picking.
When you have accurate, visible, real-time inventory data, you can optimize your inventory levels and ensure precise order delivery, saving time and money.
Hazardous Goods Storage & Handling Compliance in the Automotive Part Supply Chain
Often, automotive parts require specialized storage and handling permits to comply with local, state and federal regulations related to fluids, chemicals, corrosives, batteries and airbags. Warehouses may be required to have ESFR or in-rack sprinkler systems, physical cages and specialized training for staff to properly handle and package hazardous or ORMD items.
Warehouse management and parcel management systems must be able to accurately identify hazardous goods and have the internal logic to determine which items cannot ship together in the same carton, which DOT compliant labeling is required and the best class of freight service for the goods within an order containing restricted items.