Riding the data wave

News Lucas Deal August 15, 2013

Hollywood has made a fortune thrilling viewers with the idea of Artificial Intelligence.

From HAL 9000 to Skynet and The Matrix, “smart” computer technology has been a mainstay of science fiction for decades.

While none of those films featured the sentient, all-knowing truck parts distribution interface, the idea is not as far-fetched as you think. And unlike those technological advancements, a smart inventory system works to benefit, not minimize, its users.

Heavy-duty truck OEMs and suppliers are currently offering all-encompassing parts distribution ordering and inventory management systems in the aftermarket. Relying on data collection from sales and inventory turns, customer trends and user input, this technology — called electronic vendor-managed inventory (VMI) — works by analyzing as much information possible about a parts distributor’s operation then supplies the most accurate and effective inventory possible.

Available from vendors for the entire aftermarket and through truck OEMs for dealers, VMI can improve parts ordering and acquisition strategies, reduce parts obsolescence and maximize inventory turn rate.

For aftermarket facilities looking for another edge to help service customers, electronic VMI is an excellent tool.

“In the aftermarket it’s all about how quickly you can get a part to your customer and get him up and running,” says David Gerrard, senior vice president of distribution at Navistar. “[Electronic VMI] address the issue of uptime. It assures [an aftermarket business] has the parts it needs to get a customer back on the road.”

The biggest advantage provided by electronic VMI is the ability for vendors to use custom data analytics to perfect the inventory required by an aftermarket distributor.

Edward Kuo, director of sales, motor vehicles at Datalliance, says his company’s VMI software works by compiling as much sales data as possible for every component from a vendor that a distributor sells over time. From there, the program studies how the distributor’s sales and turn rates vary depending on a number of factors — including customer base, location, date, sales promotions and services offered.

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