Inventory management and how to reduce excess capacity in the automotive aftermarket supply chain is not a new issue, but it is one that won't go away. To address the problem, the Richard DeVos Graduate School of Management at Northwood University is conducting an industrywide study on the dilemma that primarily affects aftermarket products manufacturers and distributors.
At stake is about $6 billion of excess inventory in the supply chain — and that number is conservative, according to Dr Tim Nash, dean of the school. “Using the findings of this study, the industry can work together in an integrated, systematic way to resolve issues that are impeding overall progress and profitability,” he said. “Not only will this study help uncover the key issues surrounding the industry's historically poor inventory management procedures, but it also will provide possible solutions to help the industry move forward in solving this dilemma.”
The study was initiated and is being facilitated by the Motor & Equipment Manufacturers Association (MEMA). It is also strongly supported by the Automotive Warehouse Distributors Association (AWDA), the Automotive Aftermarket Industry Association (AAIA), and the Specialty Equipment Market Association (SEMA).
According to Nash, Northwood has begun interviewing manufacturers, retailers, program groups, and warehouse distributors to clarify the key drivers of inventory challenges, identify root causes and best practices to address the problem, and define practical obstacles to implementation of best practices.
Northwood plans to present its findings at a special session during Automotive Aftermarket Industry Week, which will be held Nov 5-8, 2002, in Las Vegas NV.