SOMETIMES it's an advantage being young.
Hyundai Translead has been manufacturing trailers for the U S market for just seven years. Which is why putting the parts information for all of its trailers into a Web-accessible database will be merely a huge undertaking, rather than a gargantuan one.
The company, headquartered in San Diego, has been hard at work on an online parts catalog that eventually will contain drawings and complete bills of materials for every trailer, container, and container chassis that the company has ever built.
The software is expected to be ready by January 2002. When the system debuts, the software will be fully functional. However, it will not have a complete database of Hyundai trailers, containers, and chassis to access. The company will continue inputting data for its products even after the system debuts.
The software will give Hyundai dealers a virtual parts catalog designed to be always current and instantly available. To use it, Hyundai dealers will log on to the appropriate Web page. Once there, and with the proper password, they can access the parts area and locate the exact part the customer needs.
“This new system will get updated all the time,” says Dino DeCesari, national parts manager. “That means our dealers will have access to the most current information possible. With a paper parts catalog, dealers have to wait for it to arrive, and by the time a printed catalog gets there, as much as 10% of it is obsolete.”
The 10% obsolescence may seem high, but DeCesari points out that trailer manufacturers typically make between seven and 20 changes to their standard specifications during the course of a year. Add to that the length of time it takes to prepare, produce, and distribute a detailed parts catalog, and the catalog quickly can become annoyingly out of date.
For the purposes of its virtual parts catalog, Hyundai breaks its trailers into 19 subassemblies. By punching in the vehicle identification number of the customer's trailer, the dealer can get an exploded view of the subassembly for that particular trailer and a list of parts that create that subassembly. For each part in the drawing, the screen will show the one- or two-digit key number that identifies the part on the drawing, a description of the part, and its part number for the Hyundai parts system.
“Initially the online catalog will be available only to dealers,” DeCesari says. “Eventually, we will enable customers to use it, too. They will be able to order the parts themselves. The system will acknowledge the order and inform them of the closest Hyundai dealer based on their zip code.”
The e-commerce aspect of the system promises efficiencies for everyone. Much of the information that must otherwise be entered manually already will be in the system and will be inserted into the order form automatically when the customer of the Hyundai parts department clicks on his order. For example, the system already knows the customer's name, address, and other information by the user name he entered to get into the system. The accurate pricing also is there.
Like many other e-commerce systems, clicking on a drop-down menu enables the customer to put that particular part in an electronic “shopping basket.” When he has ordered all he needs, he enters his purchase order number and checks out. Doing so automatically sends an e-mail to the Hyundai parts distribution center which then sends a confirming e-mail back to the customer for review.
“The entire process is automated,” DeCesari says. “It saves labor, improves our accuracy rate, and enables parts departments and customers to speak the same language. The customer does not have to know the proper name for the part he wants to buy. He just clicks on the picture, and it goes into his shopping cart.”
Currently the system contains only Hyundai captive parts.
“We have been manufacturing trailers here for only seven years,” DeCesari says. “We don't have the data input problems of a manufacturer that has been in business for many years. As a young corporation, we recognize the importance of getting this information into the database quickly. Otherwise, we would have the same problems that older trailer manufacturers have. It's still a big job. But the fact that this system provides us with a parts catalog that is always current and instantly accessible makes the work worth it.”
The company plans to expand the database to include other aftermarket parts. The system will have a dropdown menu of manufacturers. Clicking on a specific manufacturer name will then cause that product line to pop up. The customer will select the part, specify the quantity, and add it to the shopping cart.
Adding aftermarket parts to Hyundai's interactive parts catalog is consistent with the company's plans for its parts business.
“We have been developing an aftermarket parts program for our dealers,” DeCesari says. “It's not just for our captive parts, and it's not just for trailers, containers, and chassis. We see a lot of crossover between these parts and parts that go on trucks and tractors.”
Lights are a good example. Trailer dealers can easily meet the lighting needs for truck, tractor, and trailer customers.
“Truck-Lite was the first product line that we brought on board,” DeCesari says. “The Truck-Lite people were good to work with, and the response from our dealers was great.”
Hyundai serves its dealers and customer base with parts distribution centers in Ontario, California (the Los Angeles area); Aurora, Illinois (greater Chicago); and Jamesburg, New Jersey (splitting the distance between Philadelphia and New York City).
Because each of these PDCs also meet the parts needs of automobiles manufactured by Hyundai Motor Company (the Hyundai Translead parent company), Hyundai Translead has PDC facilities and capabilities beyond companies many times its size.
“We have no requests to send trailer parts where we don't send automobile parts,” says Tim Hess, who heads up the Hyundai PDC in Ontario. “So in August 1999, we added trailer parts to our parts distribution centers.”
Hyundai Motor Company, itself a relatively new player in the North American automobile market, is experiencing strong growth at a time when overall sales are soft at best.
“Our car business is up 40% this year, and our shipping and receiving also are up 40%,” Hess says. “We constantly are being challenged by Hyundai Motor Company to find ways to automate the system and to refine our warehouse management.”
Mixing Cars and Trailers
Hyundai dedicates about 35,000 square feet to trailer parts in each of its three PDCs. However, the company did not just carve out a corner of its sprawling warehouses for trailer parts. Bulky items such as top and bottom rails are stored near the loading dock for ease of handling. But the location of other trailer parts, like those used on automobiles, are stocked according to size (small, medium, and large) and by how fast they sell. Underride guards are examples of what Hyundai classifies as a medium-sized part. Upper coupler assemblies and landing gear are considered large parts.
Hyundai analyzes the sales velocity of its 39,000 part numbers every 90 days. Best sellers within each zone are stocked in the most convenient locations. Parts bins have been built to hold a 12-week supply. Not surprisingly, the Ontario PDC turns its inventory 3.5 times per year.
“Our high-demand parts occupy 30% of our space,” Hess says. “Highest-demand parts are placed at arm level so that we don't have to stretch or bend down to get them.”
The Ontario PDC is designed so that no feet leave the floor.
“Warehouses have labor costs, and they have land costs,” Hess says. “You can reduce your land costs by stocking parts higher up. But once someone has to leave the ground, you lose productivity.”
When Do You Need It?
Orders placed with the Ontario PDC fall into one of three levels of urgency — stock, regular, and emergency orders. The company offers incentives to its dealers to place stock orders whenever possible. For example, if the price of a part has increased since a Hyundai dealer ordered it for stock, the dealer can return the part at the higher price.
Regular orders are those placed outside the normal schedule but not requiring immediate turnaround. Emergency orders received before 2 pm are shipped by 4:30 pm.
“Emergency orders represent 27% of our output,” Hess says. “That represents almost exclusively car parts. To date, we are getting very few emergency orders for trailer parts.”
Despite its 27% emergency orders, there is an eerie calm about the PDC.
“Our parts pickers only make between 7 and 10 trips per day through the warehouse,” Hess says. “We all operate by precise procedure and policies. With these policies and procedures, along with giving our employees the tools they need, the job gets done. We can fill even emergency parts orders with no stress.”