Optimising M&M Spares Supply Chain

10% increase in both forecast accuracy and revenue

15% decrease in inventory

10% increase in service levels

Improved productivity

With Blue Yonder capabilities, Mahindra & Mahindra Spares Business Unit (M&M SBU) now has greater visibility regarding demand, inventory, supply and distribution plans and are able to make more accurate and timely supply chain decisions. M&M SBU has been able to increase service levels by 10%, reduce customer response times by 40%, and grow business revenue by 10%.

Challenges

• The automotive and farm equipment manufacturing giant’s Spares Business Unit (SBU) witnessed lost sales revenues due to stockouts and tight working capital as a result of high inventory investment.
• Using manual Excel spreadsheets to create demand and supply plans was not adequate for the India-based enterprise, as the complexity and scale of business exceeded the capabilities of this method.
• To gain greater agility and responsiveness to ensure the availability of spares for different demand patterns of after-market needs, M&M SBU sought Blue Yonder’s solution expertise and advanced technologies. This assisted in achieving higher customer service levels and reducing operating costs.

Real solutions

“Blue Yonder provides comprehensive, scalable, cutting- edge technology enabled supply chain planning solutions for manufacturers, wholesalers and retailers across a diverse range of industries. Blue Yonder ’s unique selling point lies in the highly capable team of individuals who strive to provide excellent customer service, and are driven toward innovating and collaborating with customers like Mahindra & Mahindra to create agile and responsive supply chains for the future,” stated the head of Demand & Supply Planning, Mahindra & Mahindra Spares Business Unit.

By implementing Blue Yonder’s Luminate Planning platform, Mahindra leveraged the benefits of key demand forecasting, inventory management, and replenishment planning capabilities.

Scientific forecasting methods and multi-echelon inventory optimization models have increased forecasting accuracy and optimized inventory levels, leading to higher customer service levels, reduced inventory investment and increased sales revenues.

Key benefits

Labor-intensive processes, disconnected systems and Excel-based planning worksheets have been replaced with integrated, automated data exchanges between Blue Yonder’s planning platform and M&M execution systems. This enables the SBU to plan, execute and deliver goods in an organized and consistent manner.

Based on the implied uncertainty of the spare parts business in general, it is imperative to be agile and responsive by ensuring the availability of spares within the shortest possible turnaround time. Post the implementation of these processes, M&M SBU has realized an improvement in forecast accuracy of 10 percent.

Additionally, M&M SBU has created a closed-loop process for monitoring procurement and warehouse activities to support the fulfilment of the sales plan. This results in better planning based on a data-driven decision-making process.

Expansive capabilities

Mahindra utilized Blue Yonder’s software to create a research-based spare parts demand segmentation framework that has been validated by Blue Yonder’s artificial intelligence and machine learning models. The software performed a complete range of timeseries forecasting and reconfigured a complete range of stochastic inventory models.

After a successful implementation across the automotive and farm divisions, the solution has been extended to trucks & buses, two-wheelers, construction equipment, powerol, and Swaraj divisions in the past 12 months. Presently, demand forecasting, inventory management and replenishment planning for over 100,000 SKUs is managed using Blue Yonder applications, across a multi- tiered, nationwide distribution network of 6 central and 15 regional distribution centers throughout India.

Why Blue Yonder

“Blue Yonder understands our spares business well. They also understand the nuances of our industry, and this gave us a good basis to work from. The software provides recommended selections based on pre-defined demand and supply parameters. Planners are able to apply default recommendations or override based on additional information available.” – Head of Demand & Supply Planning, Mahindra & Mahindra Spares Business Unit