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Universal Components Case Study
Demand Forecasting and Management, Procurement
Universal Components are leading distributors of truck and trailer parts. They were part of RAC plc (formerly Lex Group) and experienced first-hand the benefits of the group's demand forecasting system when implemented in 2000. However, a management buy-out in 2004 meant they needed to implement their own IT systems and, unwilling to forgo the benefits of a demand forecasting solution, Universal Components selected Entalysis Extensions to complement their new ERP system.
Order Fill Rate Increases by 15%, Stock Holding Reduces by 18%
Extensions went live in April 2005 with the aim of simply matching the performance of the previous system; the achieved results are listed below.
| Date | Order Fill Rate | Stock Holding | Notes |
|---|---|---|---|
| Apr 2005 | - | - | Extensions goes live. |
| Jun 2005 | +10% | +5% | In the short term, extra stock to meet new service levels arrives before excess stock of other products is sold. |
| Jul 2005 | +15% | same | Extra stock of long lead-time products arrives; sales of excess stock now balance stock increases. |
| Nov 2005 | +15% | -10% | Order fill rate maintained, excess stock continues to decrease. |
| Jun 2006 | +15% | -18% | As above. |
Performance as of February 2011
Universal Components have grown strongly since their management buy-out, acquiring European Truck & Trailer and OSL (seal division) in 2005, Pollard Beaumont in 2008, and Abal in 2009 to become the market leaders.
With each acquisition, Extensions was first integrated with the incumbent ERP system to realise immediate service level increases and stock value reductions before the acquisition was fully integrated and Universal Components' main ERP system (which already utilises Extensions) rolled out.
On average, each acquisition's service levels have improved by 7 percentage points while stock value has decreased by 44%.
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