10. KPIs
KPIs are the manager’s powerful tool to measure the
performance of his department but he needs to set challenging
but achievable targets for all areas.
Part Sales KPIs: sales achievement against the set target , sales
per salesman , sales per category , GP and discount control
Parts Inventory KPIs: MOS (month of stock ),Inventory fill rate
DHL ratio to total stock orders , obsolete stock ratio to total
stock and stock turn ratio
Ware houses operation KPIs: Service rate from CPD to
branches , Service rate from branches to workshop , Job card
closing rate , Picking rate , binning rate.
15. How can we increase sales revenue and profit
Set sales target for each branch and each
individual and measure the sale with set target
on daily , weekly and monthly basis.
Apply parts Marketing methods
Gain the customer loyalty by close follow up
Train the sale staff for quality service
Motivate the staff with bonus or incentive.
1. Sales
16. INCENTIVE SCHEME
Monthly
Basic Amount: 50% of the basic salary(current scale)
Target achievement is mandatory
Target and Points
90-94%:0.8, 95-99% :0.9
100% : 1
101-107% :1.1
108-above:1.2
Other Factors
GP ( Gross Profit )
Target & Points
40% -44 :0.90,45-49:1, 50-54:1.1, 55- above 1.2
1 Sales
18. Stock Orders Process From Inventory Management to supplier
Print Suggested Orders
MAD X ( L/T + S/S + O/C)
Send PO to Supplier Excel File
Inventory controller
Edit the suggested order
Inventory controller
Prepare the PO from sugg.
Main Inventory controller
Inventory controller
Receive PI from Supplier
Inventory controller
Check prices and P.Nos.
Supplier to send final PI
Inventory controller
to confirm the order to Supp.
Inventory controller to
forward PI to logistic Mgr
3Operation
25. Parts Marketing
Setting up market drive
Strengthen after sale , sell more vehicles , sell more parts.
Mail shots , telephone calls and customer visits
by senior staff, inviting customers to our facility
for physical evidence of our excellent service ,
promoting the business benefits of the trucks
and promoting the quality of service and parts
that backs up the servicing, Promote genuine
parts which ensures the long life of the vehicle.
Motor show , invite customer for new launching ,
Branch directory , product and pricing
information , remain closed to the customer and
all that attract the customer loyalty ,
6 Marketing
26. Inventory
Maximize the availability of parts and minimize the
inventory cost, order the right part on the right time with
right quantity.
Ensure adequate parts availability
Ensure excellent customer service
Ensure efficient and smooth distribution of parts
to branches
Achieve adequate MOS
achieve highest inventory fill rate
achieve highest customer service rate
System ordering based on sale to minimize the risk
of obsolete stock
7 Inventory
29. Cost reduction
Maximum utilization of man power
Fill the operational gaps , fill gaps in the process.
Maximum utilization of space in the ware houses
Reorganize ware houses to save time and avoid loses
Set KPIs and targets to measure the performance of
each individual.
Minimize the inventory cost.
Stop cannibalization jobs
Minimize DHL orders , fill gaps in stock orders.
Reduce the non operational expenses
8 Cost Reduction
30. 1.JAC Manpower 2015 = 27 persons
Total cost of salaries = 1,121,150 SR JAC
JAC Manpower to date = 21
merged jobs together with the business running with the same frequency of output
which is reducing the cost to 926,225 SR and we can save 194,925 per year.
2.The current cost of cannibalization is 50 hrs per month X technician salary 10 = 500
SR P/M and 6000 SR P/Y.We will minimize and finally stop cannibalization jobs.
3.Current cost of parts shipping from CPD to branches and branches to branches is
15,000 SR/month,we will minimize this cost to12,000 in the next 2 months and
reduce further as much as possible in the next months to come.
4.DHL cost reduction is also the target but it is only possible when the stock orders
become stable specially for Gulf motors and Foton.
5.Current ware houses operational costs are high because of many items are located
in one location, the picker takes longer time to find the part . There is no location
sequence and the picker has to jump from one to other row , parts are not located
according to the ABC movement classes and this all leads to loss of time .We did a
picking test with the current situation. It took us 20 minutes to pick 10 items and we
had another test with 7 storage technique facilities on board , it took us 5 minutes to
pick 10 items . Time is money. A well organized and orderly ware house will ensure
accurate stock counting and protect against the losses.
8 Cost Reduction
31. Request to IT Department
1.Create pick slip option in all the branches , No part
to pick manually.
2.Divide the moving stock in ABC movement classes. Create
ABC movement classes based on movement. A, Fast moving
B, Medium moving C , slow moving.
3.Create multiple locations in the system.
4.Create alternate location in the inventory posting sheet
where the rough sheet items can be punched directly in the
system and get accurate result and save time as regular sheets
Set ordering parameters in the system for Gulf Motors and
AUC same as JAC based on the average sale of past 6
months = Order Level = MAD x(L/T+S/S)=MAD(4+4)
SOQ(Suggested order quantity)=O/L-(Stock O/H+O/O)
37. 1. One part one location
3. Store the parts based on A,B,C movement classes as
A. Movement class nearest shelves to dispatch area
B. Movement class nearer to dispatch area after A shelves
C. Movement class last rows of moving parts storage area
4. Store the parts based on weight , heavy parts lower shelves
light parts waist level , volume parts separate but near
5. Easy reach
7. Tag multiple locations for bulk parts
2. Location sequence serial
7 storage techniques
6. Vertical location for Exhaust pipes , Glasses
8CostReduction
38. 4
3
2
1
4 3 2 15
C01
4
3
2
1
4 3 2 15
B01
4
3
2
1
4 3 2 15
C02
4
3
2
1
4 3 2 15
B02
4
3
2
1
4 3 2 15
A01
4
3
2
1
4 3 2 15
A02
A0224
A0135
Sub-shelf 2
Shelf 02
Each location used for
only one parts number.
One part one location
Zone A
Shelf number 02
Sub shelf number 2
Location number 4
8. Cost Reduction
39. 1. One part one location.
ؤؤؤczationCCCPD2 Facility
Sample
