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Automotive Part Logistics: 3 Keys to Strategic Planning
Scott Hothem • July 16, 2014
Do you remember what a lengthy process it used to be to pick up a new movie from the video store? You would plan your evening commute to swing by the local video store on your way home. After rummaging through the hundreds of titles lining the wall, you finally come across the latest installment of Die Hard, or Terminator, or whatever Julia Roberts was doing at the time. You hand over your membership card and are on your way. That’s a lot of legwork for a two hour movie. Those were the days. Today, all you have to do is press the Netflix or Hulu app on your phone, tablet or even television remote to instantly connect to thousands of titles. This saves time on your way home, room in your wallet and space on your shelf.
The way we watch movies and TV isn’t the only thing to drastically change in the past 20 years. There has been a major overhaul in the way automotive parts are ordered, shipped, tracked and used. This evolution was by no means unsolicited. In the same way consumer demand and access forced video stores to go the way of the dinosaurs, customer expectations and market conditions have forced auto part fulfillment processes to become as streamlined as possible. As such, strategic planning in the automotive supply chain is more important than ever.
In spite of volatile revenue results stemming from the economic downturn in 2008, the automotive parts industry is expected to top $170 billion in 2014 according to a report from ibisworld.com. As markets thrive and supply chain functions become more complicated the need for strategic logistical planning needs to be a key priority. The balance between superior service levels and reduced logistics/inventory expenses can be accomplished through three strategy considerations:
- Transition from a “Pull” to a “Push” tactic- Years ago the best practice was for distributors, dealerships to order or “pull” a certain part when inventory became low. This method can be very time and labor intensive because it is reactive in nature and is often a last minute order. Today, to remain efficient and reduce the risk of a poor end-user experience, a “push” strategy is more effective. Instead of low inventory triggering an order, leveraging an Enterprise Resource Plan, an order is sent, or “pushed”, to where it is needed. Allowing technological platforms to maintain inventory and place orders reduces errors and redundant tasks from your labor force and other resources.
- Inventory forecasting- Changing the way that inventory is managed and organized can support these new complex supply chains. Shipping smaller quantities more frequently can increase the efficacy of the entire operation. A high velocity network keeps the supply chain running smoothly. Segregating part types by size, volume and frequency of use is key in optimizing and forecasting inventory. This can be achieved through a customized plan with strategic facility and SKU layouts and management, as detailed here.
- Technology- Many entities are still attempting to get as much as possible from aging and antiquated systems. Not only is this technology becoming increasingly less effective, it is also becoming more expensive to maintain. Your fulfillment technology is the pivotal element of the service parts supply chain. As the demand for replacement parts grows and the number of new model releases increases, legacy systems simply cannot handle the workload.
Integrating new technologies and supply chain functions into more sophisticated strategies is crucial for a supply chain that is fast, lean and cost effective. At Barrett Distribution Centers, the experience, capability and resources to optimize technology, process and warehouse design is at the core of our performance.
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Here's a helpful timeline/guide that is applicable for clients with a "classical" peak season in Q4: 🎯 Use Q1 to add 3PLs to your RFP discovery list/search. This master list should not be more than 7-10 providers. 🎯 You should have your preferred 3PL partner list dwindled down to three no later than end of Q1. 🎯 Use the beginning of Q2 for site visits (3 max)—engage with operations and folks on the floor. At this stage, "pricing gaps" should be somewhat narrow between 2-3 companies. Focus on who will "get the job done" and who you envision your company working with for the next 2-3+ years! This is super important. 🎯 Aim to award a verbal "yes" halfway through Q2, no later than end of May. You'll want to allow another 30-45 days to work through legal discussions. 🎯 Ideally, you should sign an MSA with your chosen 3PL no later than the end of June. This allows inventory transfers over the summer and ensures the new operation has ample "time" to touch the product, test systems, etc. 🎯 Go-Live by Oct 1—You really don't want to "go live" in November, two weeks before the major holidays/peak, etc. Launching by Oct 1 allows for at least a 30-day period before the ultra-craziness begins! The Right 3PL Can Make All the Difference—Let’s Chat If you're just about to start your RFP or need help with any of the above, contact us - Barrett would love to be your next 3PL partner to run your supply chain!
Franklin, Mass., Jan. 23, 2025 — Barrett Distribution Centers , a leader in third-party logistics (3PL) leader for over 82 years, is proud to announce its partnership with MISSION , a performance lifestyle brand. “Following a thorough search and review process, we selected Barrett based on their ability to provide a scalable, dependable and competitive Omni-Channel Warehouse and Managed Transportation Services solution,” said Lisa Lehan , COO of MISSION. “Their strategic location offers the foundation necessary to support our forecasted growth through D2C and B2B channels, making them the ideal partner for our next growth phase.” MISSION is dedicated to prioritizing comfort by providing a high level of cool in every environment, whether indoors or outdoors. As a performance lifestyle brand, MISSION focuses on innovative design to ensure that extreme heat and discomfort do not interfere with work, play, or daily experiences. The brand integrates heat health™, comfort, and performance into its offerings to facilitate peak performance during a variety of physical activities. MISSION’s journey is defined by action and a strong commitment to comfort and success. The brand prioritizes innovative cooling products that can be utilized across various activities. MISSION strives to achieve health and wellness goals through continual innovation, creating solutions that empower individuals to enhance their performance without allowing heat to hinder their efforts. “It’s a pleasure to reconnect with a fun, innovative and growing brand like MISSION,” said Mark Healy , VP of Customer Solutions at Barrett. “I’m proud to call Lisa Lehan, MISSION’s COO, a friend, and the entire Barrett team is excited and honored to support the next phase of MISSION’s growth.” Barrett is set to launch the MISSION operation from the Memphis region , home to its robust network of high-growth apparel brands and robotics-driven pick solutions. About MISSION Founded in 2009 by a group of world-class athletes and heat safety experts, MISSION is the leader in head-to-toe cooling and heat-relief product innovations that enhance performance and safety for anyone who works, plays, or lives in the heat. MISSION's goals extend far beyond providing comfort; they aim to revolutionize health, wellness, productivity, and performance in the face of heat challenges. MISSION is distributed nationwide in over 25,000 retail stores and online, leading the market with patented and proprietary technologies. MISSION is the founding partner of the National Heat Safety Coalition, a nonprofit organization dedicated to improving safety and performance in high-temperature environments for workers in the United States. Along with scientists, researchers, and industry leaders, the Coalition collaborates with public and private partners to set guidelines and raise awareness about heat safety standards. For more information, visit mission.com and follow us on Instagram @mission. About Barrett Distribution Centers Since 1941, Barrett has provided customized third-party logistics (3PL), direct-to-consumer (DTC) eCommerce fulfillment, omnichannel distribution, managed transportation solutions, and retail compliance for clients across all industries, with a focus on apparel & footwear, health & beauty, consumer packaged goods (CPG) and education. Barrett continues to be a leading 3rd party logistics provider in North America, known for superior execution, customer engagement, and direct access to senior leadership decision-makers. As a member of Inc.'s fastest-growing companies list 15 times, Barrett is big enough to do the job and still small enough to care about your business deeply. eCommerce brands interested in a new 3PL partnership may contact Barrett directly here . Official Release Here
Industry Challenge In today’s logistics landscape, companies face hurdles such as fluctuating customer demand, rising costs due to inflation, and supply chain disruptions. To stay competitive, logistics providers must prioritize cost reduction and service quality. This entails adopting modern tools to offer customers greater visibility into their operations and associated costs. By leveraging analytics and enhancing transparency, companies can improve efficiency, streamline processes, and deliver exceptional customer experiences. Barrett Specific Challenges Barrett, committed to customer satisfaction and operational excellence, encountered significant challenges: Customer Satisfaction : Customers demanded frequent and accurate visibility into supply chain operations, affecting our Net Promoter Score (NPS) and trust. Poor Visibility : Inadequate visibility across the supply chain caused delays and eroded customer trust, hindering proactive decision-making. Metric Visibility and Transparency : Limited visibility and manual metric calculations hindered meaningful insights and continuous improvement. Customer Communication/Working Relationship : Numerous inquiries strained resources, necessitating streamlined touchpoints and proactive communication. Feedback from clients underscored the urgency to revamp reporting and analytics for improved transparency and alignment with customer expectations. Solution: Modernizing Data Stack and Analytics Strategy To address these challenges, Barrett revamped its data stack and analytics strategy: Snowflake Implementation : Consolidating data into one platform improved visibility and decision-making speed across the supply chain. Tableau Cloud Partnership : Leveraging Tableau's embedded analytics product and APIs enabled seamless integration of dashboards into the customer-facing portal, providing real-time insights. Driving Value for Our Business and Our Customers Transparent Cost Breakdown : By providing customers with transparent cost breakdowns, Barrett enabled informed pricing decisions tailored to different channels and partners. Streamlined Communication: Improved visibility and collaboration streamlined business planning and cost forecasting, enhancing decision-making and alignment. Elevated Customer Experience: Self-service capabilities and responsive inquiries improved NPS scores, enriching overall customer experience. Revenue Growth : Enhanced offerings led to a 13% increase in close rate, equating to an estimated $20M to $30M in new business annually. Prevention of Missed Opportunities: Prior deficiencies in reporting tools and visibility potentially cost $75M annually. Feedback from prospects highlighted areas of improvement, emphasizing the importance of customer-focused metrics. By addressing these challenges and leveraging modern technologies, Barrett not only enhanced its own operations but also empowered its customers to thrive in a dynamic logistics landscape. About Barrett Distribution Centers At Barrett, we solve challenges and build solutions that drive transparency, efficiency, and customer satisfaction. If you'd like to streamline your supply chain or elevate your customer experience, c ontact us today for a complimentary supply chain consultation with a seasoned 3PL expert.
