How to Understand Why Auto Parts Distribution is So Inefficient
… consumption unless transportation lead times are particularly long.
This analysis of where parts of the field should be located goes by some names, including multi-echelon inventory optimization, re-distribution, and inventory re-balancing.
The independent dealer model continues to work against rational inventory pooling. AMR Research (now part of Gartner) does have a good point when they bring up this point in their paper Service Parts Planning and Optimization.
During the course of this research, we found SPP applications tended to be very tactical nature, solving specific inventory, fill rate, or service-level goals. Oftentimes service is still …