Mighty Distributing Systems of America is one of the most successful companies in the automotive aftermarket. Mighty, with corporate offices located near Atlanta, Georgia, represents a respected and significant force in the international aftermarket.
Typical Mighty franchises function as specialty distributors of high-quality automotive aftermarket parts such as brake parts, filters, belts and chemicals to an increasingly sophisticated and professional installer marketplace. The success formula of original equipment quality parts, competitive pricing, professional marketing support and personal service continues to be a proven winner.
Mighty Product Center employs 90 people in Jackson, Tennessee and supplies its independent franchises in 46 states within the USA.
Mighty’s original concept revolutionized the automotive aftermarket with a two-step system - a direct shot from the manufacturer to the repair shop. The company’s technical experts establish product specifications that meet or exceed Original Equipment (OE) performance standards. Mighty sources OE quality parts from the same world leading manufacturers used by the US Big Three and other top automakers in Europe and the Pacific Rim. The service provided by Mighty’s franchises, along with this shortened supply chain, provided a competitive advantage that fueled a high rate of growth.
The automotive aftermarket is a multi-billion dollar industry in the USA and Mighty is a major player in the professional auto parts installer market. Its franchises purchase some of their parts from Mighty Product Center, and in turn supply 25,000 auto repair facilities that depend on Mighty for daily delivery of parts. This results in an order volume of 43,000 items on any given day.
Mighty needed to find a solution to cope with this volume, as well as handle distribution, inventory management and in particular warehouse management with radio frequency (RF) support.
Financials was another key issue. It was taking Mighty five days to close end of month financials - a costly and unacceptable situation.
Solution and capabilities
Mighty considered several vendors and reduced the list to three finalists before choosing IBS supply chain management software. Mighty chose IBS because of the software’s excellent functionality, stability on the IBM System i and DB2 Database, and the fact that IBS was the most financially stable company of the three finalists.
Mighty went live with IBS software during the busiest month it had ever encountered. After going through the implementation process, the new system was up and running with full functionality by mid-morning the first day.
IBS software is specially developed for the automotive aftermarket. Sales prices are under severe pressure and the responsibility is being laid on distributors. Furthermore, shorter lead times and delivery precision are becoming more and more essential for distributors like Mighty to continue to stay competitive.
Most of Mighty’s daily intake of 5,000 order lines are received electronically and do not require review by customer service staff. Orders go to the distribution center for disbursement to the pickers who, within seconds, see the order information on the RF device. Nobody ever needs to look at a piece of paper.
Mighty uses IBS software for inventory control as part of its inventory tracking system, which is linked to handheld computers to collect orders and monitor inventory movement. This allows stocking inventories to be customized by demand to ensure maximum inventory turns at the installer level.
Mighty also provides another value to its customers by offering them IBS software’s electronic order confirmation feature. When Mighty receives an order, an automatic acknowledgement notification is sent to the customer by fax or email.
Benefits and value
Mighty now sees a much better picture of how it is performing. The company is able to view its orders online and audit initial fill rates, as well as look at its profit and loss on a daily basis. In addition, IBS software automatically produces reports on order activity, margins, returns and recovery costs, as well as the balance sheet.
The flow of communication is much improved; it now takes only one day to close monthly financials. The improved automation has allowed Mighty’s staff to concentrate on more value-added activities for its customers.
IBS’ electronic order shipment confirmation is of significant value to Mighty’s customers. They now know the full details and arrival date of each order, which allows them to better plan their business.
The major impact of IBS software has been its ability to reduce overhead and planning inventory. In addition to reductions in overhead, Mighty has also gained a ten percent picking productivity improvement through the use of RF, as well as a decrease in picking errors.
Mighty forecasts a 2.5 year ROI in IBS software.