18
DCs across Europe
16,000+
Dealers
1,700+
Suppliers
400,000+
Aftermarket parts & accessories
A global automotive manufacturer runs 18 distribution centers across Europe and supplies more than 16,000 dealers with over 400,000 aftermarket parts and accessories, sourced from 1,700+ suppliers. Years of regional growth had left that network without a common design: distribution centers overlapped in function, and neighboring regions negotiated separate contracts with the same 3PLs and carriers.
So the manufacturer partnered with Solvoyo on network optimization for its global spares network, using Total Cost to Serve as the single objective. The redesign delivered €18M in short-term recurring annual savings and €11M in long-term net savings.
Overlapping Distribution Centers and Duplicate Contracts Across Europe
The spares network had grown region by region without a common design, and it supplied 16,000+ dealers from 18 distribution centers.
The network showed four problems:
- Regional distribution centers with overlapping functions
- A vast cross-dock network, some of it owned and some of it contracted
- The wrong inventory mix in parts of the network
- Separate contracts with the same 3PLs and carriers across different regions and countries
The costs behind these problems only show up when the network is looked at as a whole.
Aftermarket Parts Distribution Network Optimization Built Around Total Cost to Serve
Solvoyo built an analytics platform to optimize the global spares network against a Total Cost to Serve objective. The aim was to find savings through infrastructure consolidation, optimized product flow, and common contracts.
The work also included scenario modeling: more than 120 scenarios were run to refine the customer service strategy and the physical infrastructure needed to support it.
Savings were identified on two horizons. Short-term savings came from flow consolidation and optimization. Long-term savings were mapped to opening and closing distribution centers.
€18M in Recurring Annual Savings and €11M in Long-Term Net Savings
The network redesign delivered savings on two horizons:
- €18M in short-term recurring annual savings (4% of Total Cost to Serve) through flow consolidation and optimization
- €11M in long-term net savings (7% cumulative) through DC opening and closing decisions
What Does This Mean for You?
A spares network that grows region by region ends up with overlapping distribution centers, a mismatched inventory mix, and duplicate 3PL contracts. Modeling 120+ scenarios against a single Total Cost to Serve objective turned those problems into a concrete short-term and long-term savings plan.
If your own distribution network grew one region at a time, with each region negotiating its own carrier and 3PL contracts, a Total Cost to Serve model of the whole network is the place to start.
About Company
A global automotive manufacturer running 18 distribution centers across Europe, supplying more than 16,000 dealers with over 400,000 aftermarket parts and accessories through a network of 1,700+ suppliers.
Achievements
€18M recurring annual savings
€11M net savings from DC opening/closing
120+ scenarios modeled for network redesign
Don’t take our word for it
80% of IT tools investment fails if the partners don’t strive to continuously improve and adapt. That is what sets our partnership with Solvoyo apart.
With Solvoyo, we eliminated spreadsheets from the process and simultaneously increased process speed and planner efficiency across all regions.
By rationalizing our North American network, we provided improved service at lower costs through redesigning our network. Our project succeeded in shifting our “inventory-centric” perspective to one of “total-cost optimization.” We have since consolidated our depots in North America, leading to significant infrastructure cost savings as well as a sustained inventory reduction of $5 Million.
Solvoyo’s S&OP platform gives both the regions and the HQ the ability to maintain a supply plan harmonized with demand and inventory investment targets. We now identify supply plan discrepancies proactively. Along the way, we eliminated Excel from the process and simultaneously increased process speed and planner efficiency across the enterprise.
We see rapid changes in demand, and when the inventory is short, we adjust our production plans accordingly. The adjustment requires a lot of manual work, causing suboptimal plans and inefficiencies on the production site. With Solvoyo’s optimized plans, not only do we make easy and smart decisions but also respond to any rapid change at the speed of the market.
