How One Big Three Automaker Improved Profits with a Second Look at Its Service Center Network
The Client
One of AER's longest standing clients in the automotive industry underwent a significant change in its approach to product lifecycle management (PLM). This major automaker decided to streamline its operation by bringing an auto electronics manufacturing network of over 25 service centers for radios and clusters under one umbrella. As a maker of one of the world's most well-known auto brands, the manufacturer did not have room for error when choosing its remaining partners.
The Challenge
As a major automaker that just re-absorbed its auto electronics business, the client faced a challenge to cut costs, reduce excess inventory and focus on an increasing quality in prodcuts and services. Coupled with the greater availability of overnight shipping at the turn of this century, it was time to consolidate the service center network.
The profit line on auto electronics was thinning, while consumer warranty costs rose, so the automaker made the decision to consolidate from a network of more than 25 service centers to 5, and later 2.
Find Out Why AER Made the Cut
The Impact
By delegating remanufacturing responsibilities to a dedicated electronics service center with the competence to handle the entire remanufacturing process - from order taking to remanufacturing, re-flashing, and distributing - the automaker saw significant impacts. The big three manufacturer needed a partner that could exemplify their strong emphasis on providing the highest quality products while upholding their industry reputation and AER delivered.
AER's sustainable manufacturing practices brought significant positive impacts for this automaker. New, lean remanufacturing process development resulted in quicker turnaround and lower backorder. In addition, high revenue rates, and significant profit margin increase within the first year were just a few benefits the automaker saw after a re-evaluation of its service network.
70 Million
Annual Revenue
50%
Profit Margin Increase
$160
Average Savings Per Unit
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