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Case Details
Introduction
Problem Statement
Finding
Solutions Proved
Data Analysis
The After Training
Summary
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Introduction
This OEM Automotive company is a market leader in heavy-duty filter manufacturers for the automotive industry ( air, fuel, lube, and hydraulic filters ).
Problem Statement
The OEM automotive company faced significant challenges due to a complex pricing structure, inefficient sales strategies, and operational misalignments. These issues led to uncompetitive pricing, financial instability, and difficulties in meeting market demands, particularly in the aftermarket. Warranty disputes and a lack of focus on marketing further worsened the company’s market position.
Findings
Opereaze identified pricing inefficiencies, erratic sales patterns, financial risks from credit reliance, aftermarket neglect, and poor inventory management that weakened market presence.
- The company’s pricing was 15-20% higher than competitors due to overly complex pricing and discount schemes.
- A push-based sales model resulted in erratic ordering patterns, benefiting large distributors and causing end-of-month sales rushes.
- Heavy reliance on credit led to inconsistent pricing and increased financial risks due to bargaining by distributors.
- Aftermarket needs were neglected, causing delays, unpredictable sales, and a weak market presence.
- Poor storage of discounted items resulted in frequent warranty disputes, damaging customer trust.
Solution Provided
Opereaze implemented a simplified pricing structure, optimized inventory and delivery, enhanced marketing efforts, and aligned operations to stabilize sales and improve distributor management.
- Simplified Pricing Structure: Eliminated volume-based discounts, introducing a straightforward, cash-only attractive pricing strategy that benefits both the company and distributors.
- Inventory and Delivery Optimization: Established buffer stocks for fast-moving items, ensuring timely delivery for cash purchases and allowing multiple smaller orders for better distributor inventory management.
- Marketing and Support Enhancement: Developed marketing materials and hosted Below-The-Line (BTL) activities to boost groundlevel sales and support.
- Operational Alignment: Decoupled plant operations from sales orders by utilizing a central warehouse system to manage stock levels and fulfil based on actual demand.
Data Analysis
The After Training
After the execution was done, we trained the team for a dedicated period, hand-holding them and ensuring the team followed the process every day, as we believe that practicing techniques and methods can enhance the product activity in the long run and also make the team independent. Instead, a mere execution for a stipulated period can only help in the short run
Summary
In just 11 months, Opereaze helped this OEM Automotive Company achieve a transformative supply chain shift. By moving from a push to a pull-based system, distributor purchases aligned with actual sales, driving sustainable growth. Cash sales skyrocketed from the low 30% range to the mid-80%, while distributor sales surged by 200% to 300% within six to eight months. On-time delivery rates improved significantly, reaching the high 80% from the mid-50%, and distributor inventory days dropped from 65 to less than 20. Additionally, a renewed focus on marketing and promotional materials revitalized the sales team’s morale, further fueling success.
Customer Reviews of the Case
When Opereaze Consulting came on board, they reignited the confidence in our sales team. They transformed the strategies, thereby eliminating the month-end chaos of order pressures and stressful collections. Opereaze Consulting's approach allowed our team to focus on market development and distributor growth, with some growing up to 300% in just a few months. If you’re looking for a partner who can truly transform your aftermarket operations and bring sustainable growth, I strongly recommend Opereaze Consulting.
