NAPA, DAYCO know how to keep things efficient

Jan. 1, 2020
Increasing inventory efficiency within the automotive aftermarket is one of the biggest challenges the industry faces. But the winners of this year's R.L. Polk & Co. Inventory Efficiency Awards, NAPA AUTO PARTS and Dayco Products, LLC, are doing

Companies receive R.L. Polk & Co. awards

Increasing inventory efficiency within the automotive aftermarket is one of the biggest challenges the industry faces. But the winners of this year's R.L. Polk & Co. Inventory Efficiency Awards, NAPA AUTO PARTS and Dayco Products, LLC, are doing just that by proactively creating and implementing process improvements relative to stocking and storing inventory.

Stephen Polk, chairman, president and CEO of R.L. Polk & Co., and Mike Gingell, its vice president of strategic markets, attended this year's Global Automotive Aftermarket Symposium (GAAS), where they presented NAPA and Dayco with the third annual awards.

"The purpose of this award is to create a process to drive best practices and to encourage knowledge sharing within the industry," Gingell says. "We also want to give companies that are making a positive impact on the inventory issue a chance to tell their story and to educate, motivate and inspire others within the industry to do the same."

NAPA received best-in-class honors in the retailer/distributor category for the development of an inventory classification system aimed at making daily stock adjustments at all NAPA stores. The Marketplace Inventory Classification System, or MIC, allows employees to evaluate store information, such as inventory sales, lost sales and total stocking levels. In addition to this data, the system integrates electronic catalog data, parts numbers, prices, POP codes and Polk data to select the correct inventory level for each store, which has resulted in a 7 percent sales increase and a decrease in inventory returns.

"In a previous panel discussion, George Witt (owner of Lincoln, Neb.'s George Witt Service, Inc.) said to do something every day to make your customers better," Samuelson says. "We think that MIC does that both for the store and for the installer."

He adds MIC has been a great learning experience for NAPA executives and store owners. "I'm pleased that the feedback about MIC has been so positive," says Samuelson. "NAPA stores now have the right parts on the shelf to sell, which has built confidence in the suggested inventories (from MIC)."

NAPA also uses this innovative classification system to suggest inventories for its dealer customers. For example, MIC recently allowed the company to suggest inventory for a new account with more than 650 locations and to process these requests in just more than a week. Add a 318 percent return on investment for this project alone, and the company clearly has a winning product on its hands.

Dayco beat out the competition to win the manufacturer category. The award recognizes Dayco's successful implementation of data and technology standards — such as PIES, ACES and IPO — which has resulted in inventory reductions of 27 percent, fill rates of 98.8 percent and inventory write-offs of less than one-tenth of 1 percent. This free flow of information translates into a 10 percent reduction in machine shop downtime and an ability to forecast customer demand more accurately and effectively.

Dennis Welvaert, president of Dayco's North American Aftermarket Division, explains that Dayco is a proponent of lean manufacturing methods and the development and optimization of sales forecast models. However, he says the implementation of industry standards took the processes and made them more efficient.

"Before we implemented the industry's data standards, our factories handled data one way, R&D handled it another way, and product management dealt with it a third way," says Welvaert. "The data standards force us to do it all the same way, which improves our company's internal communication and allows us to better support our customers."

In addition to presenting each company with an award, Polk made a $1,000 donation NAPA and Dayco's names to the GAAS Scholarship Fund.