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A division of the NSG Group of Japan, Pilkington Automotive serves the Original Equipment (OE) and Automotive Glass Replacement (AGR) aftermarket sectors. The business line accounts for just over 40 per cent of revenue of the parent Group.
The NSG Group is one of the worlds largest manufacturers of glass and glazing products for the building, automotive and specialty glass markets. It acquired the UK-based Pilkington plc in 2006. Today, the expanded Group employs 32,500 people worldwide, with manufacturing operations in 29 countries and sales in over 130.
Pilkington Automotive provides glazing solutions for one in three vehicles in the world and supplies all of the major automotive groups including Toyota, GM, Ford, Daimler, Volkswagen, Renault/Nissan, PSA Peugeot Citroen, Honda and BMW.
Setting the strategy
Pilkington Automotives European AGR business comprises a complex network of large and small retail fitters across wholesale and distribution markets, each with acutely time-sensitive delivery requirements, ranging from next-week to same-day service.
The aftermarket network is supplied from a number of distribution facilities, including a large European Distribution Centre, five additional European hubs and an extensive network of over 60 smaller warehouses. Pilkington Automotive also sources about 95 per cent of its extensive product range from its own manufacturing plants.
Pilkington Automotives supply chain is complex due to a number of factors:
A large and growing product range with in excess of 10,000 stock keeping units (SKUs), covering windscreens, back windows, door glazings and accessories
Multiple channels to the market, with different routing options
As with many aftermarket operations, a large proportion of slow or sporadic moving products which are required to support the AGR business
Following a roll-out of an ERP system in 2004, the business reviewed its demand and inventory planning processes, concluding that it needed new processes and a best of breed planning system to complement its core ERP capability.
We found the previous forecasting solution to be lacking in several key areas, said Andrew Collum, Pilkington Automotives Forecasting Manager for AGR Europe. We therefore made the decision to look for a new demand planning tool that could help support the increasing complexity of stock management and product routing within our supply chain network.
For the selection process, Pilkington Automotive set up a project team, led by a special projects director. It assessed vendors solutions on functionality, support, and the ability to interface with their existing ERP system.
After careful consideration, the company decided that SCM Demand Planning from Infor, with its proven record of success, would be best placed to drive efficiencies and support business growth.
Of particular importance to Pilkington Automotive was Infors track record in supplying demand and inventory planning solutions for other customers with an after-market business. We have a multi-channel business and we wanted proof that Infor could support both the complexity and particular issues associated with our supply chain, commented Andrew Collum.
It was an essential prerequisite (of the system) that we could establish and maintain excellent availability of our vast range of products across Europe, many of which have low repeatable sales. Infors slow-moving algorithms in demand planning overcame the traditional problems we have seen when trying to forecast these sorts of sporadic demand patterns.
The ease of use of the system has also been a key benefit, continued Andrew Collum. We manage thousands of forecasted items and the exception reports are vital to directing attention to products that need our immediate attention. We can manage potential shortages or overstocks before they have an impact on our sales and profitability.
The Infor project kicked-off in July 2006 and Infor SCM Demand Planning went live at the European Distribution Centre in February 2007.
Pilkington Automotive transformed its planning processes alongside implementation of the system. Andrew Collum explains: Pre-implementation, there was a lack of ownership of the forecasting processes and limited co-ordination between key business functions. This resulted in low forecast accuracy at SKU level and inventory imbalances. Now we have a dedicated forecasting team with a European Forecasting Manager and a tool to continue the development of our S&OP capabilities. This provides much better co-ordination across the business functions and allows us to better anticipate and prepare for changes in demand and supply conditions.
Since adopting Infor SCM Demand Planning, Pilkington Automotive has seen a number of benefits around its Key Performance Indictors (KPIs) including better stock to sales ratios, improved distribution fill rates and an improvement in the quality of the forecasts provided to our global manufacturing operations. The solution has also been an essential tool in driving the companys S&OP process for long term planning.
Demand Planning offers the company a European view of demand in a single view, generating much more confidence in the supply chain plan.
Doing business better
Infor SCM Demand Planning has delivered on its promise, concludes Andrew Collum. It supports the forecasting and inventory management processes of what continues to be a very complex after-market supply chain.
The solution integrated readily with our existing ERP system and has supported our business processes for sales and operations planning. Combined with the other changes we have made in our business, we are in a position to respond better to customer demands and do so with lower investment in working capital.
Following the initial success of Infor SCM Demand Planning, Pilkington Automotive now plans additional roll-outs across Europe in 2009 and 2010.
Infor acquires and develops functionally rich software backed by thousands of domain experts and then makes it better through continuous innovation, faster implementation options, global enablement, and flexible buying options. In a few short years, Infor has become one of the largest providers of business software in the world. For additional information, visit www.infor.com