Federal Mogul is a leading supplier of automotive aftermarket products in Australia and internationally. One of their popular brands in Australia is the Top Gun® range of ignition products. Other Federal Mogul brands in Australia include Champion Ignition Products, Ferodo Brake Pads and Payen Gaskets.

After installing Horizon Inventory’s advanced inventory management system, Federal Mogul is now achieving Top Gun® performance across thousands of products. They are reducing inventory, increasing service and delivering greater profitability. In fact the investment was cash flow positive in the first few weeks of implementation and needed just two weeks of I.T. and ERP vendor time.  They are now accepting 95-100% of the purchasing recommendations ... too good to be true? 

"When we committed to install micq-if we knew it could offer many benefits, but it gave us much more – it was cash flow positive just a few weeks after going live. It has given us the ability to see problems coming before they are even on our radar."

Michael Moulang,
Operations Manager - Australia

 

Inventory Management delivering performance

Horizon Inventory’s micq-if system can supercharge your ERP systems and inventory investment.

Like many, Federal Mogul has invested in a good ERP system so they could manage orders, invoicing and accounting.  The staff is very comfortable with the system and how it works and the practices were certainly well established.

However Federal Mogul knew they were not getting full value from their ERP investment. Inventory planning and inventory level optimisation are not core features of ERP systems. In Federal Mogul’s case, inventory management was manually intensive and introduced cost and risk into the business.  Stock turnover was sub-optimal and service levels on many parts were not being met.  Too much time and effort was being spent on low value transaction management and not enough on costs, service, strategy and policy.  They recognised that they had a lot of data but not a lot of useful and usable information.

Adding micq-if to the business only took a few months and has enabled Federal Mogul to generate significantly higher returns from its ERP and stock investments, including:

  • Purchasing that used to take a couple of weeks a month, now just takes a couple of days, allowing staff to focus on exceptions and improve ordering frequency.
  • micq-if provides a platform for all its purchasing, stock movement and kitting operations
  • Inventory optimisation has been taken to a whole new level e.g. supply planning considers over 20 variables, whereas traditional approaches consider maybe 4 or 5.  This leads to far better decisions and recommendations from the system.  Federal Mogul now has insights they could never have had just using the inventory management capabilities of the ERP system.
  • It has easily bolted-on to the ERP system, so that information flows seamlessly to and from micq-if, allowing each system to play to its strengths: the ERP system handling the operations and transactions while micq-if handles the complex inventory planning, management and optimisation.

For many items, inventory levels are dropping by more than 50%.  For others, outages are being anticipated and prevented.

When we committed to install micq-if we knew it could offer many benefits, but it gave us much more – it was cash flow positive just a few weeks after going live.  It has given us the ability to see problems coming before they are even on our radar.

Michael Moulang,
Operations Manager - Australia

 

Benchmark your capabilities against Federal Mogul’s

Michael Moulang and the team at Federal Mogul knew from the outset that they had too many of some parts, and too little of others.  They also knew that the tools they used, took too long to manage their ordering.
 
This is how Federal Mogul describes its original capabilities versus the productivity advantages and information it can now get from its inventory management system.
 
Question your performance. Which side of the table do you sit on?

Before

Now
We struggled with spreadsheets that had to plug the gaps in our inventory management approach.  Everything was treated the same.  Our ERP system was capturing a lot of data but we were failing to realise all its potential value. Things like Common Quantities are recognised from the patterns in our data.  This runs automatically, helping us pick up benefits on virtually every product in the range.
Our forecasts were simple averages and we struggled with what to do with ‘out of the ordinary’ orders.  It all took a lot of time and effort. micq-if produces forecasts that are very hard to fault.  Some of our products are seasonal.  It easily identified them and kicks out ‘quit stocks’ and other abnormals.
We had to treat each supplier with similar rules of thumb, in spite of the fact that some were clearly better than others. The analysis of supplier performance has been very easy ... in fact it will probably only take us a day or so once a quarter.  micq-if will then reflect the different levels of supplier reliability in our inventory targets.
It just took too long to manage our ordering.  We struggled to order more than once a month. We have been able to increase the ordering frequency for several of our major suppliers, giving us working capital and service advantages – all because reviewing POs is now so much easier and faster.  We now accept nearly 100% of the purchasing recommendations.
We have had a variety of different ways for managing our key production and stock management processes, many of which might have been previously considered as good practice. We now handle all our production planning and remote warehouse replenishment via micq-if.  The disciplined and scientific approaches are delivering benefits in terms of inventory turnover, service levels, productivity and information visibility.
Doing any sort of analysis or tuning of our processes and system was simply out of the question. The Levels and Supply Planning Tuners are easy to use and the results make sense.
I can see how we can adjust service levels, profitability and ROA. I have the information to make the right kinds of decisions.
We had problems in our processes and our disciplines – we knew we had to fix them. It helped us identify some holes in our processes and data ... and avoided about $100,000 worth of problems in just a few weeks.
micq-if is now helping us with the disciplines to fix things once and keep them fixed.
We run lean. We still run lean and we achieve far more.  We have done all this far faster than I originally thought possible ... just a few weeks after switching on.
The partnership with Horizon Inventory has been great.  They are committed to our success.

While Michael Moulang is very happy with micq-if and Horizon Inventory perhaps he is happiest with the endorsements from others ...

It is easy. I can trust its recommendations. It is fast!

Mohan Somasundaram,
Purchasing Officer

It is making money for us every day!

Steven Pumfrey,
Director Sales and Marketing

Find out more about how Federal Mogul supercharged its business and how you can too.

 

How Federal Mogul fired up

Michael Moulang reflects below on his and the team’s journey. You might identify with a lot of the issues and challenges he faced. You will see in the end how micq-if was an obvious and easy choice, one that Michael wishes they had perhaps made even faster, given the benefits they are now achieving.

And a final word ...

We should have done this ages ago!

Michael Moulang,
Operations Manager - Australia

Would you like to find out how you too could switch on the after-burners for your inventory management performance?  Move to a faster, smarter and far safer platform?

Please contact us