Cayuga Partners Solutions

Analytics – Service Parts Forecasting and Planning algorithms

Tools – Collaborative Dealer Parts Replenishment System

Project Description

Benefits delivered:

• To AGCO customers: Higher parts availability, reduced repair and downtime, lower operating costs.
• To AGCO Dealers: Higher parts availability and customer satisfaction – increased customer facing fill rate from 60% – 70% to > 90%; reduced inventory levels and lost sales; faster turnover; increased employee productivity and available warehouse space; lower inventory and logistics costs; improved repair shop utilization.  Dealer acceptance of system recommended orders has improved continuously to almost 80% in two years.
• To AGCO: Increased share of original spare parts orders; reallocation of inventory to dealers; improved product availability at central warehouse from POS data visibility; improved communications and dealer loyalty; increased machine sales due to better after-sales service; additional cross-selling opportunities; buy-back programs.  Planner acceptance of system recommended orders is now over 90%.

What we did:

We worked with agricultural equipment manufacturer AGCO International GmbH to develop and deploy a model-driven planning and control system for managing dealer service parts inventories in a multi-echelon, rapid response supply chain.  The Managed Dealer Inventory (MDI) system was the first step toward implementing a global supply chain management strategy. The system collects point of sale and inventory information from dealers, combines it with historical sales data, considers factors such as seasonality, part criticality, cost, etc., and generates “recommended purchase” suggestions back to the dealers to help them make buying decisions that optimize inventories: maximizing customer service levels while minimizing investments.  For a presentation on the system see: AGCO MDI Presentation

How we did it:

Cayuga Partners did the math that powers AGCO’s MDI “engine”, including advanced forecasting and inventory optimization algorithms.  Our excellent business partner in Europe, Barkawi Management Consultants, designed and developed the system architecture and infrastructure, performed dealer systems and data integration, delivered training to analysts and dealer personnel and provided overall project management for this ambitious, complex, rewarding program.

In 2015 Barkawi was recognized by Wirtschaftswoche with its “Best of Consulting Award” in Supply Chain Management for the AGCO MDI project.