Thank you to our customers for an excellent year. In 2019 we saw some incredible results from our engagements. We’d like to take a moment to celebrate those and call to attention the actions that made a big difference.
With a Service Tier 1 engagement for a large dealer group, we were pleased to see a return on investment of 1781%! These results ranged from location to location but on average this is quite a success. Engagement from each roof top’s frontline staff, service management and executive management is always critical to successful engagements. At these locations we worked closely with their service director and as a team made repeated visits to each location, communicated daily through project management software and were able to focus front line team members on the basics of technician time (Service department inventory) management. Daily engagement with live data and commitments from each team equaled success.
Another smaller scale service engagement brought gross margin growth of 3.8% for one of our customers, while we averaged 1.7% average gross margin growth overall for our service engagements this year.
On the parts side, KEA has focused on improving first-time fill rate from inventory while also improving inventory true turns. The process is to first strengthen inventory accuracy, develop correct days supply and ordering patterns, enhance DMS utilization and maximize performance of the specific vendor managed inventory program (i.e. LPA, DIA, PartsEye, MDI, RIMPro, etc.) This process yields improved on-hand accuracy (shelf count vs. system count being accurate; correct bin location), identifying exceptions to bin location/stock class or source “rules”, finding exceptions to vendor managed inventory rules, pinpointing parts that should be on the shelf but are not, correcting open order issues and return issues, etc. The result is a very accurate inventory that has the right part on the right shelf in the right amount at the right cost at the right time. Real world results from our inventory integrity engagements yield 5%+ point increases in first-time fill rate from inventory and true turns improvements of ½+ turn. This means less frozen capital while also improving fill-rate. Other benefits are knowing with confidence that the on-hand count is correct (no one needs to “wait a minute while I check the shelf.”) This leads to being able to centralize phone rooms that do not have access to the inventories at multiple locations.
Back at KEA headquarters, our Business Intelligence team made strides with customers on custom analytics projects. We have focused heavily this year to analyze data to pinpoint outliers that become obstacles to
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. Whether that is looking at Inventory Health, Pricing Strategies, Economic Order Quantities, Service Throughput, or Cash Flow statements, we have been able to deliver specific actionable items to our customers during 2019. Recently, we’ve honed a financial analysis that details KEA Gross Margin and Expense benchmarks across all dealership departments. This provides many of our customers a clear path with ordered steps to reach 130% Total Absorption.
We made positive contributions both as the interim sales manager for a variable ops department, and as the interim CFO for a dealership this year. With both, we developed and solidified important departmental procedures while the dealerships recruited permanent placements for those positions. Additionally, we held leadership workshops and interventions, and performed custom business intelligence analytics projects. Next week, we’ll share the wide variety of projects we were engaged in this year.
We thank our 2019 customers and look forward to working with you in 2020 to help you achieve best in class performance!
