American Tire Distributors Streamlines Inventory Management and Order Processing across a Distribution Network That Services 37 States
 
 

American Tire Distributors Streamlines Inventory Management and Order Processing across a Distribution Network That Services 37 States

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American Tire Distributors is one of the nation’s largest independent suppliers of tires and wheels. It operates more than 95 distribution centers servicing 45 states. In addition, the company distributes tires to auto dealerships and large retailers. It has approximately 90,000 active customers in total.

To support its growing and expanding business, American Tire Distributors deployed Oracle E-Business Suite in 2005 to improve financials, procurement, and supply chain processes. Most recently, to overcome barriers to efficiency and accuracy posed by its manual, paper-based warehouse management system, American Tire Distributor implemented Oracle Warehouse Management. With Oracle, the company has modernized its warehouse management operations and reduced paper use. It has deployed the Oracle application and rolled out handheld RFID scanners in about one-third of its distribution centers and warehouses, with plans to complete the full rollout in the next two years. The new system has helped the company grow its market share and increase annual sales to more than US$2 billion.

 
 

 
 

Challenges

A word from American Tire Distributors

  • “Oracle Warehouse Management provides us with greatly improved flexibility and efficiency in our warehouse operations. We have been able to incorporate retail capabilities to our wholesale distribution capabilities with minimal effort, and user adoption has been tremendous due to the simplicity of the application.” – Tony Vaden, Vice President and Chief Information Officer, American Tire Distributors

  • Expand the company’s national leadership position in tires and wheels and support plans to grow revenue through organic growth and acquisition
  • Continue to operate the business in a profitable manner and maintain its reputation for fair and consistent pricing by identifying and capitalizing on ways to improve efficiency and reduce costs across a large enterprise that includes 98 warehouses with 8 million square feet of space and a fleet of more than 800 delivery trucks
  • Help the company efficiently maintain its promise of 24-hour direct store delivery and reliable tire and wheel stock
  • Automate inventory, which was previously done manually either once a year or once per quarter, to improve accuracy and warehouse efficiency
  • Gain more timely access to purchase order receipts to increase inventory accuracy

Solutions

Oracle Product and Services

  • Deployed Oracle Warehouse Management to enhance visibility and increase inventory and shipment accuracy with real-time tracking and validation of tire and wheel inventory movement
  • Integrated with Motorola handheld devices that automatically deduct products from inventory when they are picked for an order
  • Cut inventory variance from 1.8% to 0.7%
  • Reduced time required to process, pick, and approve orders, enabling trucks to get out of the warehouse and on the road faster
  • Provided customers with greater flexibility by enabling them to place same-day or next-day delivery orders later in the day—through improved automation in the warehouse
  • Improved employee efficiency by automating a manual-count, annual inventory process—enabling the company to complete the inventory process in half the time previously required
  • Reduced the back-office work of inventory reconciliation, which used to take several hours, to just seconds
  • Linked with the company’s logistics system to route orders from the warehouse to customer locations via the most efficient route
  • Gained insight into historical trends and quantities on hand through integration between the warehouse management system and Oracle Advanced Supply Chain Planning
  • Improved labor and skill utilization by reducing the amount of labor required to manage logistics in the warehouse
  • Supported a high volume of 14 million sales orders per year, approximately half of which are now entered online, and 2.6 million purchase order lines per year
  • Supported 4.1 million possible combinations of active-item and organizations combinations in the item master
  • Achieved rapid user adoption with just one day of on-the-job training due to the warehouse management application’s simplicity
  • Contributed to the company’s growth to beyond US$2 billion in annual sales

Why Oracle

American Tire Distributors knew that inventory and delivery are two qualities that set the company apart in the industry. As such, Oracle’s robust warehouse management module helped to drive the company’s selection of Oracle E-Business Suite. The tight integration of Oracle Warehouse Management with other Oracle E-Business Suite applications was also attractive as it eliminated the need to build and maintain custom integrations.

“For us, Oracle Warehouse Management was the crown jewel of our Oracle implementation, and it has been an invaluable addition," said Tony Vaden, vice president and chief information officer, American Tire Distributors

Implementation Process

After acquiring several Oracle E-Business Suite licenses through the acquisition of Winston Tire, American Tire Distributors decided to implement the solution companywide. It completed a phased rollout in 2003. Then, in 2010, the company went live on Oracle Warehouse Management. It has rolled out the system to 32 distribution center locations with a total target of 98 in the next two years.

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