With Inact, Mercedes Benz has managed to reduce their passenger car inventory by DKK 3 million in less than a year.
Case: Mercedes Benz CPH
How Mercedes Benz CPH became champions of profitable growth
“We used Excel to create an overview. Doing the things we do now would be a jungle.”
– Interview with Warehouse Manager at Mercedes Benz CPH, Brian Aakær
Obsolescence and high inventory value
Why did you start the project with Inact?
Before, we were groping around in the dark. We had no overview and acted on gut instinct. With the analysis from Inact Now and the sparring from Inact’s consultants, we realized that 4% of our spare parts generate almost 60% of our revenue. It was a real eye-opener for us.
At the same time, the analysis showed that we had too much obsolescence and too high inventory value. On our high movers, for example, we had a large overstock of 90 days. We receive goods from Germany daily, so there was really no reason for that. With the analytics from Inact Now, we have clarified this. We wanted to do something about it without affecting our customers.
Inact Now helps us to execute
What have you been working on?
We have automated our analytics and we use the Checklist function in Inact Now in our work with out-of-stock, returned parts and obsolescence. The out-of-stock list is automatically updated and shows parts we’ve run out of, and we get it every month. I send it out to the Warehouse Managers, who go through it to make sure they have what they need that day. In addition, we have a list of potential return parts to help us put an end to obsolescence.
The list shows the items that have not been sold for over a month. We also work with lists of dead items. Especially those items that haven’t moved for 12 months. Checklists standardize and focus the way we work with obsolescence, e.g. in connection with campaigns, outreach sales, returns, etc.
Reduced inventory value by DKK 3 million on aftermarket and maintained the same high level of service
We used to use Excel to create an overview. It was a jungle to do everything we could do with Inact Now. That’s probably also why we’ve gotten such good results so quickly. We felt we were doing the best we could with the data we had. But when you don’t have the right management tool, it’s extremely difficult.
It’s almost like a wave that has been started. Once you can see results right away, you want to dive deeper into it, because there are so many possibilities.
Now we can actually see month by month how our KPIs are improving. If you can’t show results over a longer period, it’s hard to motivate employees. For me, my motivation would have disappeared if I had to keep sitting with all those Excel sheets.
Well supported by the Inact consultants
I would say that a lot of it is due to the fact that we have had a good dialog with the consultants at Inact. For example, they made an important little change in our inventory value report, and if they hadn’t, I doubt we would have noticed it ourselves.
Inact is extremely responsive to our requests and things happen instantly. It took less than an hour from the time I had expressed my wishes for a report to the time it was in Inact Now.
They’ve been very proactive in contacting us and that’s been important. I’m really looking forward to seeing what the future holds. We need to keep evolving – and we can’t stand still.
Results
Reduced inventory by DKK 3 million
Same high level of service
The most important thing at Mercedes Benz is that an appointment is an appointment. This means that when a customer books an appointment, spare parts must be available. Despite reductions in inventory, the company manages to ensure this good service.
Increased efficiency
Mercedes Benz uses Inact Now to automate their analytics and to get an overview that they can use to make correct decisions. Before Inact Now, they relied on time-consuming Excel sheets that were difficult to understand.
Mercedes Benz CPH
Mercedes-Benz CPH sells and maintains Mercedes-Benz cars, vans and trucks and the small smart in Greater Copenhagen and North Zealand. They have over 350 employees across six departments.
