key performance indicators for monitoring dealer engagement

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Key Performance Indicators for

Monitoring Dealer Engagement

Peter Drakeley – Director of Professional Services, EWA


Syncron is the global leader in aftermarket service

optimization

• Dealer Management and

Aftermarket Specialist

– Inventory Management

– Price Management

– Analytics

• Customers are multinational

companies

– Active users in over100 countries

– R&D intensive, investing >20% of

revenue

– Over 425 man years invested in

Dealer IM development

Meet the Presenter:

• 8 years of experience in

Dealer IM implementation

• Leads global teams on

multi-disciplinary projects

• University of Birmingham –

MSci Theoretical and

Mathematical Physics

Peter DrakeleyDirector of Professional Services


Best Practice Dealer IM (Inventory Management) Program

• Needs to be seen as a strategic initiative by senior executives at the OEM and part of

the standard OEM – Dealer business model.

• High dealer adoption is a pre-requisite for a successful project.

• Using a dedicated Dealer IM software platform is a key success factor.

• Dealer terms and conditions must

incentivise adoption and differentiate

from non-program dealers.

• OEM parts sales model needs to

incentivise retail sales rather than

wholesale sales.

• Efficient and fast roll-out important to

minimize project cost.

• Investment in change management at

the dealer and at the OEM is a key success

factor.


Successful Dealer Inventory Management Programmes are

built upon a solid, process-driven foundation

Pre-Implementation Implementation Post Implementation

In pre-implementation, we focus on establishing a pipeline of dealers ready to join the Dealer IM programme.

During the implementation phase, Syncron and the OEM work together to implement Dealer IM into the network.

Post implementation support is required to ensure continued, correct engagement in the Dealer IM programme and to maximise value achieved from both the dealer and OEM perspective.

Dealer On-boarding:

• Raising RIM profile within the dealer network

• Establishing dealer interest

• Dealer readiness assessment

Dealer Implementation:

• Full RIM model for distributors

• RIM Light for smaller distributors and dealers

Dealer Engagement & Audit:

• Ongoing motivation

• Additional training

• Analyst support (OEM/Syncron)

• OEM support


There can be many causes of low levels of engagement and

poor adoption amongst the dealer network

1) Investment in Inventory Management capabilities are negatively

correlated with distance from OEM/PDC and the number of tiers away

in the Supply Chain.

2) Inadequate support during the on-boarding phase leading to an

undertrained and unprepared dealer.

3) Poor availability of parts from the OEM undermining the Dealer

Inventory Management programme.

4) Not having the right Dealer Inventory Management-associated

incentives.

5) Change of personnel at the dealer and an inadequate framework of

support.


Tracking and reporting data delivery and quality are

fundamental to maintaining dealer engagement

• In a large Dealer IM implementation the DMS integration is a critical

success factor. This needs to be stable, and actions need to be taken

rapidly if it is failing.

• Syncron comes with excellent reporting capabilities for monitoring the

integration as well as ensuring that integration issues are detected and

alerted immediately.


Standardising business KPIs is step one in understanding the

relative level of engagement of your dealers

• Large variation of KPIs

– Sales Value

– Service Level

– Service index

– Inventory Value

– Stock Turns

• Reports

– Risk of Run Out

– Excess Stock

– Alerts

– Inventory Follow Up


Syncron offers full support for system auditing –

Dealer Compliance Tracking

• Compliance measures the proportion of parts which have dealer applied overrides to the replenishment parameters.

• Low levels of compliance can indicate advanced system usage at the dealer level.

• Low levels of compliance can indicate that a modification maybe required to the standard system parameters applied for that dealer.

• Actively monitoring dealer system compliance encourages dealer / OEM engagement and continuous dealer IM process improvement.



Order Acceptance Rate Tracking

Choose type of KPI

Placed order linesRecommended order lines



Complete Order Audit

• A detailed order audit by order line enables visibility of all modifications the dealer is making to any order line.

• An order audit can be used in a real time analysis of engagement and also historically to review potential reasons for over stock / stock run out.

• The order audit should record:

• Whether an order line was confirmed or not.

• The types of order placed.• The original order line.• Any modifications made

and by what user.• Any notes on the order line.


Model One: OEM takes full control of dealer inventory

• Dealers own inventory

– Initial stock clean is usually

executed favourably to the

dealer

• OEM manages all aspects of

ordering

– Automated process

– Follow-up on the performance

of the dealers

• Obsolete stock buy back guarantee

• Stocking lists for new parts

provided by OEM

• Dealer may or may not have

access to an ordering portal

OEM Distribution Center

Dealer 1 Dealer 2 Dealer 3

Figure 1: OEM drives dealer forecasts and recommends new order levels

Forecasts & Order Recommendations


Model Two: Dealers retain full control of inventory

• Dealer owns and has full control of

inventory and ordering

• OEMs suggest replenishment

recommendations to dealers

• Obsolete stock buy back guarantee only

if certain conditions are met:

– Dealer places X% of orders

suggested by the system

– Access to high quality dealer data is

available

• Strict penalties need to exist for low

levels of stock order efficiency

• OEM requires audit and follow up on the

dealer performance

OEM Distribution Center

Dealer 1 Dealer 2 Dealer 3

Figure 2: Dealer drives forecasts and recommends new order levels

Forecasts & Order Recommendations


The less control the OEM has of dealer replenishment the

greater the level of engagement monitoring required

OEM Controlof replenishment

process

Necessary Monitoring Complexity

• Data delivery• Data quality• Business KPIs• Application logons• Compliance• Order acceptance

• Data delivery• Data quality• Business KPIs

100%

O%

Low High


Conclusions

1)Provide relevant support to the dealers post implementation.

2)Different levels of engagement tracking is necessary dependent on the level of OEM control of the inventory.

3)An automated alerts framework is required to effectively track engagement complemented by a pro-active dealer support team.

[email protected]


Key Performance Indicators for

Monitoring Dealer Engagement

Peter Drakeley – Director of Professional Services, Manager EWA

key performance indicators for monitoring dealer engagement

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