American Tire Distributors Cuts Inventory Variance to Below 1%—Accurately Fulfills Millions of Tire Orders Each Year
 
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American Tire Distributors Cuts Inventory Variance to Below 1%—Accurately Fulfills Millions of Tire Orders Each Year

American Tire Distributors is one of the largest independent suppliers of tires to the replacement tire market, serving approximately 70,000 customers across the United States and Canada. The company offers a wide breadth and depth of inventory, frequent delivery, and value-added services to tire and automotive service customers. In 2013, it expanded its operations in Canada.

 
 

 
 

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 with minimal effort, and user adoption has been tremendous due to the simplicity of the application.” – Tony Vaden, Vice President and CIO, American Tire Distributors

  • Expand the company’s North American leadership position in tires and wheels and support plans to increase 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 108 US warehouses with 8 million square feet of space and a fleet of more than 900 tire-delivery trucks
  • Help the company efficiently maintain its promise of 24-hour, direct, store deliveries and a 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

  • 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 inventory in half the time previously required
  • Reduced back-office, inventory reconciliation work to seconds, a process that used to take several hours
  • Linked with the company’s logistics system to route orders from the warehouse to customer locations via the most efficient route
  • Improved labor and skill utilization by reducing the amount of labor required to manage logistics in the warehouse
  • Supported a high volume of 16 million sales orders per year, approximately half of which are now entered online, and 3.0 million purchase order lines per year
  • Supported 4.1 million possible combinations of active items and organizations 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 beyond US$3.8 billion in annual sales and supported expansion in Canada

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 CIO, 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 later went live on Oracle Warehouse Management, rolling out the system to 88 distribution center locations with the last 20 scheduled for 2014 deployment.

As the company expands in Canada, it has a pilot project underway to integrate Oracle Warehouse Management into one of its Canadian warehouses in 2014, targeting full deployment in 2015 and 2016. It plans to adopt the configuration used in its US operations as much as possible.