How automotive parts distributors can overcome volatility

Grant Ludema

Automotive parts distributors are experiencing tremendous pressure to meet customer needs despite having little control over their supply chain.

The lingering stress of the COVID-19 pandemic’s impact on production, fluctuating trade agreements, and unique demands such as the need for aftermarket parts have left distributors looking for a solution.

The automotive parts supply chain is long, with several entities involved from manufacturer to customer. Distributors need to have insight into where parts are in the manufacturing process, knowledge of potential shipping delays, and an understanding of what customers are going to need in the immediate future. In short, distributors need to be able to predict, react, and plan for what’s next.

Despite the complexity, technology offers an opportunity to ease the pain of uncertainty and embrace a dynamic supply chain.

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NetSuite ERP offers structure in unpredictability

While it might seem like supply chain volatility is easing, automotive parts distributors need an organizational structure to better manage upcoming orders.

Amid an ever-changing market and without total confidence in supply and demand, automotive parts distributors still offer significant upfront investments. They invest in buffer inventory because they know that a long lead time is the name of the game, which affects cash flow and the ability to make in-the-moment decisions about automotive parts that their customers might need.

This guesswork can be overcome with the right system and solutions specialist. NetSuite enterprise resource planning (ERP) solutions can offer structure and flexibility and answer questions like:

What supply do we have on hand and where?
Where are certain parts in the supply chain?
How much longer until we receive a specific part?
Can we use previous order information to predict future demand?

As a NetSuite Solution Provider, Crowe specialists have worked with NetSuite ERP and parts distributors to reshape the industry’s complexities into opportunities. We created the Crowe Parts Distribution Accelerator for NetSuite to help shorten shipping turnarounds, empower teams with a single solution, and optimize profitability and margins. This solution, built on top of NetSuite ERP technology and specifically for parts distribution, can be transformative.

3 ways NetSuite ERP can help automotive parts distributors despite supply chain woes

As distributors await automotive parts like chips, spark plugs, or batteries from manufacturers, NetSuite ERP can ease the mounting pressure that comes from waiting in a few ways, including:

1. Visibility

NetSuite ERP can track where parts are in the supply chain much more easily and efficiently than employees manually trying to monitor each contact. The system can cooperate with the technology used by manufacturers to update distributors once a part reaches a certain point in the delivery process. It can even send out timely alerts to customers once an item ships.

2. Automation

Manual entry and updates run the risk of error. To avoid this obstacle, NetSuite ERP automation can more accurately alert distributors to problems along the way. Whether an issue is with a part’s availability, production, or even labor constraint, the system can identify imbalances more quickly than its human users.

3. Forecasting

Predicting what comes next is one of the most difficult parts of automotive distribution. Who could have predicted the current reason for the supply chain challenges? To address and overcome these challenges, NetSuite ERP offers built-in capabilities that can home in on patterns associated with actual demand and anticipate future demand to give distributors better insight into purchasing for on-hand or just-in-time inventory. The system can also calculate based on historical data and adjust recommendations for seasonal demand. Even more, it can pivot its forecasted information if a user inputs data based on immediate changes in the market.

Why a volatile supply chain affects pricing

It isn’t simply inventory or shipping timelines that are affected by a volatile supply chain. Price volatility can be a direct result of just-in-time practices. Suppliers and manufacturers can’t give price relief, flexibility, or incentives when they’re unsure if demand can keep up.

Without addressing the supply chain issues in some way, high prices will continue to be passed along to the end customers, which could result in dissatisfaction and a possible drop in revenue. A real-world example is the recent dramatic increase in used car prices. The pandemic increased the difficulty in buying not only new cars but also their parts because of the disruptions in the supply chain.

We can help you set up an NetSuite ERP solution specifically for wholesale distribution.

Crowe has already developed several solutions for the NetSuite platform to address the challenges and barriers to growth for our wholesale distributor clients. We can do it for you, too, in less time than you might expect.

NetSuite consulting services

Easing uncertainty and overcoming volatility

Crowe specialists have spent time with automotive parts distributors to gain an innate understanding of their businesses inside and out. Our team includes a group of strategic thinkers who have built modules like the Crowe Parts Distribution Accelerator for NetSuite specifically for parts distributors.

From supply chain volatility to technology integration with manufacturing, NetSuite ERP features and Crowe specialists can help turn your biggest challenges into opportunities.

Interested in seeing the Crowe Parts Distribution Accelerator for NetSuite in action?

Schedule a demo

Grant Ludema

Consulting

+1 312 899 1510

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