In 2000, NewStream Enterprises, LLC (NSE) was contacted by a large brake original equipment manufacturer (OEM) with a major supply chain issue: servicing its aftermarket customers. NSE put together a value-add proposition to manage the North American Parts Distribution Center (PDC) for the OEM. The new relationship proved successful, ultimately decreasing lead time to the customer and increasing the OEM’s aftermarket sales, while maintaining high quality and on time delivery rates.
In the beginning of the program, the OEM separated its inventory held on consignment at NSE into three categories by lead time: A-parts had a 48-hour turn time; B-parts, two weeks; and C-parts, five weeks. Working from within the OEM inventory system, NSE provided customized supply chain management from receipt of product to order processing to transportation management in two locations: Springfield, Missouri, and Ontario, Canada. Additionally, a dedicated customer service representative was placed on site with multiple phone and fax lines specific to the OEM account.
As the relationship strengthened, the NSE team successfully streamlined the supply chain process for the OEM, transitioning to a 48-hour turn time for all stocked part numbers, with 80% of orders shipping the same day. Furthermore, technology allowed NSE to not only increase inventory accuracy, but also to increase quality for the OEM. The implementation of a wireless barcode scanning system featuring serial number tracking helped increase inventory accuracy to 100% on $2.6M worth of product. This scanning system also increased quality to 99.99% over 12,000 shipments, which covered more than 7,000 destination points, including OEM PDCs and direct shipment locations.
The decrease in lead time and implementation of the wireless scanning system have proved beneficial for the OEM. By utilizing NSE management expertise for its North American PDC, the OEM was able to increase its top-line revenues by 50% since over the life of the program.
NSE became a solution provider for this OEM’s aftermarket distribution needs. The program consistently is awarded a 100% customer satisfaction rating from the OEM and its customers. According to the OEM’s Chief Executive Officer, “The NewStream…performance enables [our OEM] to continue promoting ‘quality and service’ to our aftermarket customer base.”
After improving to a 48-hour turn time for all stocked part numbers, this customer saw 80% of orders shipping the same day, 100% inventory accuracy rates, 99.99% quality rates, and increased its top-line revenues by 50% for the first time ever.
A large brake original equipment manufacturer (OEM) came to us with a critical issue. They needed comprehensive supply chain management solutions to better service their aftermarket customers and make improvements on their KPIs.
NewStream Enterprises came up with a customized supply chain management approach, from receipt of product to order processing to transportation management to customer service.