With 2,200 parts suppliers and more than a hundred thousand daily orders around the world, Mopar saw an opportunity to improve their referral parts shipping operation by increasing efficiencies and reducing costs.
Referrals are parts that are out of stock at regional warehouses. These parts make up 12 percent of Mopar's annual business. The company's system for referral parts had been redesigned dozens of times over 20 years to cut costs. The resulting process involved up to seven-days transit time for the dealerships without any tracking abilities and multiple touch points that increased the potential of in-transit damage to parts.
"It was a convoluted result," says Mopar Supply Chain Manager Bonnie Hedeen. "The process wasn't adding value for the customer, it was confusing them. It was time to remap the referral parts operation."
Mopar contacted UPS to help bring the system up to date and make it efficient. A team comprised of Mopar management and an enterprise team from UPS worked collectively to find solutions. The team was able to redesign the referral parts network, develop process changes and implement new solutions in only eight weeks. The supply chain redesign resulted in improved customer satisfaction by 20 percent and logistics costs reduced by 10 percent.
"Referral parts are critical to the business. We took a customer-first viewpoint: 'Make it reliable, predictable and "trackable."' The entire Mopar and UPS team made that their mantra," Hedeen says.
UPS integrated its UPS WorldShip™ shipping software into Mopar's existing system. The team fully integrated small package, as well as UPS Freight® and UPS Air Freight shipments into WorldShip. UPS assisted Mopar with designing their warehouse flow and operation layout. WorldShip systems and printers were also provided to Mopar. Thanks to a special barcode on each part, the WorldShipTM operators are able to scan and automatically populate the needed shipment data into the system without manual entry, providing a one-click process for multiple shipping methods that saves time, reduces errors and produces more efficient invoicing.
To make customer call response at Mopar efficient, the UPS Global Account Team developed a call center to handle any incoming customer requests. In addition, two UPS Supply Chain Solutions (SCS) management employees are exclusively committed to Mopar. This provides Mopar with a single point of contact to its logistics provider, UPS, no matter what their specific needs.
Multiple touch points have been reduced and shipments now go straight to the dealerships instead of going through a tedious multiple-warehouse and reconsolidation route. All referral parts are now tracked at every stage of the shipment. Time-in-transit has been reduced to a standard three days with options for UPS 2nd Day Air® and UPS Next Day Air® shipping, with that time varying for larger auto parts and assemblies that require UPS Freight.
"The crème-de-la-crème is the tracking capability," Hedeen says. Dealers are now able to get status updates on orders rapidly and accurately. With hundreds of thousands of Mopar shipments each month, tracking capabilities are of paramount importance.
In an effort to promote continuous improvement, Mopar and UPS have developed operations teams in Metro Detroit and Wisconsin to meet weekly and review their operating process for packaging, labeling, loading and sorting parcel and UPS Freight shipments. Due to this effort, dealership damage claims have been reduced by 40 percent.