XL Parts, a distributor of automotive parts, has reduced inventory investment by 16% thanks to its implementation of an advanced inventory management, forecasting and redistribution solution from Custom Technology Solutions (CTS). Launched two years ago, the online solution enables XL Parts to control and manage inventory across all distribution locations, and as a result, inventory investment by location has decreased by almost 16% while revenue and market share have both increased by 40% from 2003 levels.
XL Parts makes an extensive inventory of products from its 21 distribution locations available to its installer customers. It faced the challenge of needing to improve internal controls and the performance of its inventory investment. The distributor implemented the CTS application, which has helped XL Parts make more intelligent decisions on procurement, allocation and inventory balancing.
“While we have reduced our average inventory investment per location, we have realized better service levels,” says Ali Attayi, CEO of XL Parts. “That benefits us and our customers.”
The virtual redistribution system in combination with advanced forecasting capabilities enabled XL Parts to affect $3.2 million in inventory optimization within its supply chain. It was able to identify true excess inventory, while the advanced forecasting and order point management system assisted in the procurement and deployment of the right inventory at the right location.
Benefits also extended to the company’s suppliers because the amount of unsold and other excess inventory returned to manufacturers has been reduced.
The system generated significant value for the distributor in the area of inventory balancing and right-sizing of inventory, points out Terry Bryden, general manager of XL Parts.