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Tenneco

How Tenneco Helps Customers Improve Profitability and Productivity through Effective Inventory Management

This leading provider of emission, ride control and brake products for the worldwide automotive market enabled major customer benefits – e.g. one customer saw a 39% increase in sales – and achieved stronger customer satisfaction by improving productivity and completing stock adjustments 75% faster.

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Challenge

Provide consultation and resources for inventory management that will meet local needs

Solution

IHS Automotive, driven by Polk – Automated INVision tool for quick and accurate recommendations

Results

  • Enabled major customer benefits such as:
    • One customer saw a 39% increase in sales
    • A warehouse distributor experienced a 10% sales gain
  • Improved productivity and completed stock adjustments 75% faster
  • Achieved stronger customer satisfaction based on quick turnaround and accurate information
  • Honored by industry experts as recipient of Polk Inventory Efficiency Award

Tenneco Improves Customer Profitability and Productivity

Serving both the worldwide automotive original equipment market and aftermarket, Tenneco Inc. has a long history of designing, manufacturing and distributing quality emission, ride control and brake products under such widely recognized brands as Monroe, Walker, DynoMax and Rancho. Tenneco’s aftermarket trade partners include major program groups, warehouse distributors and retail chains. Like others in the industry, many Tenneco customers face a common challenge: knowing which parts to stock to meet the needs of customers in their local markets.

Stocking the Right Parts to Meet Local Need

Tenneco views its customers as partners, and the Tenneco sales force works closely with its partners to help them analyze their inventories to determine appropriate stock levels to meet local market demand. But, Tenneco realized that the manual process its sales team was using to analyze inventories in customer distribution centers and stores was cumbersome and time-consuming. To provide increased value to its customers, Tenneco executives realized they needed both a faster process and more precise and consistent data to guide their inventory management recommendations.

Incorporating Registration Data into an Automated Tool

A cross-functional team at Tenneco representing sales, marketing, engineering and others, supported by IHS Automotive, set about to develop a solution to help customers maximize their inventory efficiency. The goal was to give the Tenneco sales team the information needed to make accurate and quick inventory-related recommendations to its customers. Tenneco also wanted to enable its sales team to focus on activities that supported incremental sales, rather than spending days poring over buyer’s guides, sales history and on-hand inventory.

INVision™, Tenneco’s inventory analysis optimization solution, was developed to address these issues. In addition to automating and greatly speeding up the process, this Excel-based tool provides fact-based insight into local market trends through the integration of IHS registration data. Rather than relying on global production data as Tenneco had done in the past (e.g., how many vehicles were produced that use the part), Tenneco sales representatives now know where those vehicles were sold, down to the US county and Canadian provincial code level. This information, along with sales history, helps the Tenneco sales team more accurately project demand for particular parts in a market based on the registered quantity of specific year, make and model vehicles that require the part and the replacement rate for it. Vehicle registration data is especially valuable in regions where there are significant differences among communities in a major metropolitan area in terms of vehicle ownership trends, e.g., a large concentration of foreign nameplates in one suburb, but not in another.

Tenneco is committed to helping our customers improve their businesses. That’s why we invested in the development of a solution to help them better manage their inventories so we can all be more productive and profitable.

Charles “Chuck” Osgood,
Manager - Training & Operations, Tenneco

The need to maximize the efficient use of store space by carrying the right parts for the local market is especially critical for retailers and warehouse distributors carrying exhaust-related products because many of these parts are large. Originally created for the emission control side of Tenneco’s business, the INVision™ solution was quickly perceived to be of value across the company’s broad product portfolio. Therefore, INVision was launched simultaneously for ride control and emissions control customers. Based on positive feedback and results from both Tenneco’s sales team and customers, INVision is now being rolled out across other Tenneco product lines.

In the past, Tenneco tried to look back at why sales had been lost to help customers make inventory decisions. But, this was challenging as many retailers and warehouse distributors don’t have good data on lost sales. INVision has helped Tenneco and its customers move to a more forward thinking approach of determining which parts to stock based on projected need tied to vehicle ownership and the replacement rate.

More Informed Inventory Management Decisions Yield Results

Both Tenneco and its customers have realized measurable benefits from the use of INVision, including:

  • Sales increase: One customer saw a 39 percent

    Screen shot from INVision™ Inventory Analysis Tool

    increase in sales of direct fit catalytic converters, a product category where effective use of floor space is especially critical because the parts are so large.
  • Higher sales: A warehouse distributor experienced a 10 percent sales gain across its distribution center and 15 company stores in the import welded exhaust assembly category in spite of a net inventory reduction due to improved analysis of sales opportunities.
  • Improved productivity: Using INVision, Tenneco sales representatives can now complete stock adjustments 75 percent faster.
  • Stronger customer satisfaction: Customers have been very impressed with the quick turnaround and high degree of accuracy of information from the INVision tool.
  • Industry recognition: Tenneco’s INVision solution won the 2010 Polk Inventory Efficiency Award from IHS Automotive in recognition of this innovative approach to meeting customers’ needs.
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