2. Parts Consulting VT-T-2 Jan 2002 Page 1 STOCKMANAGEMENT WITH DMS-AUTOPLUS

3. Parts Consulting VT-T-2 Jan 2002 Page 2 Stock related issues in Autoplus – Where does the parts information come from ? – What about prices and how are they calculated ? – How can I see this information ? – How do I re-order parts ? – What about stock management basics ? – How can I analyse my stock ? – What should be the target ? – How to make an inventory (stock taking) ?

4. Parts Consulting VT-T-2 Jan 2002 Page 3 Where does the parts information come from The main parts information from BMW Group is distributed in a ASCII-file named SA40 (Record Type 40). Further on some additional information is stored In another file: Family Code File (VTVCODE) Required Files : SA 40 VTVCODE

5. Parts Consulting VT-T-2 Jan 2002 Page 4 Data-flow BMW Group - Dealer DMS Importer using Autoplus Dealer using Autoplus Via Internet or via File Transfer The Importer himself is responsible to get the data ! Data

6. Parts Consulting VT-T-2 Jan 2002 Page 5 SA 40 File (Price Information) by ICS Web page ICS: (https://scf.bmw.de)

7. Parts Consulting VT-T-2 Jan 2002 Page 6 SA 40 File (Price Information) by ICS select SA40 File Download

8. Parts Consulting VT-T-2 Jan 2002 Page 7 Parts File Structure in AP2000 SA40 & VTVCODE SYSS\SF_70020 SYSS\SF_07020 SYSS\SF_01020 Import SA40: Menu 1-3-1 Pricing 1 Pricing 2 Importer Catalogue File Dealer Catalogue File Stock File Parts Prices & Family Codes Parts Receipt Price Update: Menu 4-2-6 New Parts Creation ~ 170.000 Parts ~ 5.000 – 9.000 Parts SA30

9. Parts Consulting VT-T-2 Jan 2002 Page 8 Pricing Influencing Factors Influencing Factors on VT-Retail-Pricing BMW Group Recommended Retail Price* (RRP) Pricing SA (Accessories) Price Positioning Primary Product Depreciation of older Vehicles Cost-of- Ownership Price Positioning of car manufacturing Competitors Insurance Rating Profitability of BMW AG and Importers Competitor’s Pricing of Parts and Accessoires Example: Part No.1214 1 703 276 Sensor RRP: EUR 38,60

10. Parts Consulting VT-T-2 Jan 2002 Page 9 Pricing Discount Assignment - Examples 41 00 8 205 093 Body Skeleton Euro 4481,47- / A 11 42 1 727 300 Oil Filter Insert Euro 6,13 - / I 11 12 1 734 624 Rocker Cover Gasket DM 7,11 / K Example: Part No. 1214 1 703 276 Sensor RRP: EUR 38,60 Discount Code: D = 20% Ex Factory: EUR 30,88 1214 1 703 276 Sensor EUR 38,60 / D

11. Parts Consulting VT-T-2 Jan 2002 Page 10 Pricing Discount Assignment – Coding Groups Target: All parts of one product group with the same discount code! Example: Part No. 1214 1 703 276 Sensor RRP: EUR 38,60 Discount Code: D = 20% Ex Factory: EUR 30,88

12. Parts Consulting VT-T-2 Jan 2002 Page 11 Pricing Discount Assignment Captive Parts Slow Moving Items High Priced Items Cost of Ownership Low Discount Competitive Parts Fast Moving Items High Discount Ex Factory Discount Code Criteria: VT-Retail Example: Part No. 1214 1 703 276 Sensor RRP: EUR 38,60 Discount Code: D = 20% Ex Factory = RRP – 20% = EUR 30,88 BMW Group Retail - Discount code (%) = Ex-Factory

13. Parts Consulting VT-T-2 Jan 2002 Page 12 Pricing Market retail price calculation 1.Common Way of Retail Price Calculation 2.Calculation using Retail-Factors based on coding groups

14. Parts Consulting VT-T-2 Jan 2002 Page 13 Pricing Common way of retail pricing VT-Retail Discount Code Ex Factory Market - Retail Mark-Up factor covers Landed-Cost, Exchange Rate, Importers Gross Profit and Dealer Discount. Example: 14% Dealer Discount Dealer- Net

15. Parts Consulting VT-T-2 Jan 2002 Page 14 Pricing Common way of retail pricing - Example Market- Retail Ex Factory VT-Retail Front Silencer E 23Example: A 200,90 245,- G 144,55 267,05 372,00 245,- G 144,55 267,05 245,- G 144,55 267,05 245,- 18121175015 735i 18121175333 728i 732i 735i 18121246146 728 728i 730 733i 18121178272 735i Same VT-Retail Price for identical items Different VT-Discounts due to cost problems Different Market- Retail for identical items

16. Parts Consulting VT-T-2 Jan 2002 Page 15 Pricing Disadvantages of common method In some cases it presents higher prices than what the customer is willing to pay. In other cases the price is too low. It does not allow simple adaptation to the market situation

17. Parts Consulting VT-T-2 Jan 2002 Page 16 Pricing Recommendation Calculation using Retail-Factors based on coding groups

18. Parts Consulting VT-T-2 Jan 2002 Page 17 Pricing Coding groups VT classifies the total parts range of more than 100.000 items into approx. 900 "coding groups" to simplify the pricing for comparable parts in one group. 12 Engine Electrical System Example: 12-10 Ignition 12-10-10 Distributor 12-10-11 Distributor Cap 12-10-12 Rotor Arm 12-10-13 Pulse Generator 12-10-20 Ignition Coil 12-10-31 Spark Plugs Single 12-10-32 Spark Plugs Set (4 pieces) 12-10-33 Spark Plugs Set (6 pieces) 12-10-40 DME Control Unit 12-10-49 DME Control Unit (Exchange) 12-10-51 Ignition Cable Sets/Wires 12-10-52 Spark Plug Socket 12-10-60 Transmitters 12-10-99 Miscellaneous Items The complete coding handbook can be supplied in 5 languages in printed form or on diskette. Example: Part No. 1214 1 703 276 Sensor RRP: EUR 38,60 Discount Code: D = 20% Ex Factory: EUR 30,88 Family Code: 121060

19. Parts Consulting VT-T-2 Jan 2002 Page 18 Pricing Parts Price Information BMW Group transmits the parts coding file on a monthly basis This information must be stored by part number and updated monthly in the master file ! The essential data fields published for automatic pricing are: Part NumberDescription BMW Group Retail BMW Group Discount... 12 13 1 404 309 12 13 1 703 825 12 13 1 730 766 12 13 1 734 468 12 13 1 402 440 12 14 1 703 276... Ignition coil Sensor... 95,00 38,60... E D... Family Code... 121020 121060... Example: Part No. 1214 1 703 276 Sensor RRP: EUR 38,60 Discount Code: D = 20% Ex Factory: EUR 30,88 Family Code: 121060

20. Parts Consulting VT-T-2 Jan 2002 Page 19 Pricing Retail Factor Table Example:Family CodeDescriptionRetail-Factor... 121011 121012... 121020... 121060..... Distributor Cap Rotor Arm... Sparkplug... Transmitters... 1.25 1.35... 1.10... 1.30... For each family code a "Retail-Factor" needs to be set in the local systems. Using the table with all „Retail- Factors“ the individual market retail prices are calculated on a part number level. Example: Part No. 1214 1 703 276 Sensor RRP: EUR 38,60 Discount Code: D = 20% Ex Factory: EUR 30,88 Family Code: 121060 Retail Factor: 1.30 Market Retail Price = 38,60 x 1.30 = EUR 50,18

21. Parts Consulting VT-T-2 Jan 2002 Page 20 Pricing Dealer Discount Table The relation between Market Retail and Dealer Net Prices is defined by the market discount. To classify each item to the market discount codes the BMW Group discount assignment should be adapted. ABCDEFGHIK 8101214161820212223 Example: Part No. 1214 1 703 276 Sensor RRP: EUR 38,60 Discount Code: D = 20% Ex Factory: EUR 30,88 Family Code: 121060 Retail Factor: 1.30 Market Retail Price: EUR 50,18 Dealer Net = Market Retail Price – 14% = EUR 43,15 Possible Dealer Discount Table

22. Parts Consulting VT-T-2 Jan 2002 Page 21 Pricing Recommended Market Retail Price Market - Retail factor RRP Ex-Factory Partner discount Dealer discount Dealer Net EUR 50,18 EUR 7,72 = 20% EUR 30,88 EUR 38,60 EUR 5,54 = 14% EUR 43,15 Example: Part No. 1214 1 703 276 Sensor RRP: EUR 38,60 Discount Code: D = 20% Ex Factory: EUR 30,88 Family Code: 121060 Retail Factor: 1.30 Market Retail Price: EUR 50,18 Dealer Net: EUR 43,15

23. Parts Consulting VT-T-2 Jan 2002 Page 22 Pricing General min. 95% Automatically calculated max. 5% Manually priced Number of line items => 95% automatic price calculation. => overall view, better control and flexibility to adapt to local and global conditions => competitive prices contributes to the global price harmonization => Higher customer satisfaction => Customer recovery

24. Parts Consulting VT-T-2 Jan 2002 Page 23 Pricing Targets Switch to retail price calculation using Retail-Factors based on coding groups Retail Price harmonization

25. Parts Consulting VT-T-2 Jan 2002 Page 24 Price Calculation in AP2000 CALCULATION OF LANDED COST PRICE CALCULATION OF SALES PRICE CALCULATION OF SALES PRICE (MARK-UP) CALCULATION OF SPECIAL PRICES (MARK-UP)

26. Parts Consulting VT-T-2 Jan 2002 Page 25 Pricing 1: Calculation of LC-Price

27. Parts Consulting VT-T-2 Jan 2002 Page 26 Pricing 2: Calculation of Sales Price

28. Parts Consulting VT-T-2 Jan 2002 Page 27 Pricing 1: Mark-up Calculation

29. Parts Consulting VT-T-2 Jan 2002 Page 28 Where do I see the information ?

30. Parts Consulting VT-T-2 Jan 2002 Page 29 Information by double-click on single item

31. Parts Consulting VT-T-2 Jan 2002 Page 30 Information by double-click on single item

32. Parts Consulting VT-T-2 Jan 2002 Page 31 Same Information in AP 4.0 (Menu 4-1-3)

33. Parts Consulting VT-T-2 Jan 2002 Page 32 Same Information in AP 4.0 (Menu 4-1-3 Page Down)

34. Parts Consulting VT-T-2 Jan 2002 Page 33 How can I see my Retail Factors by Family Code ?

35. Parts Consulting VT-T-2 Jan 2002 Page 34 Re-ordering with Autoplus  Creation/Modification of an order  Printing/Updating the order form  Transfer of the order file (E1,N1) via ICS  Manual Receipt in IT-System (without SA30)

36. Parts Consulting VT-T-2 Jan 2002 Page 35 Creation of an Manual Re-order

37. Parts Consulting VT-T-2 Jan 2002 Page 36 Printing/Updating of the Orders Automatic or manual order

38. Parts Consulting VT-T-2 Jan 2002 Page 37 E1, N1 File Transfer via ICS

39. Parts Consulting VT-T-2 Jan 2002 Page 38 Order Transfer via ICS Select file : K:\BMWCOMM\VTAVAUFT

40. Parts Consulting VT-T-2 Jan 2002 Page 39 Manual Receipts (without SA30)

41. Parts Consulting VT-T-2 Jan 2002 Page 40 Automatic Receipts using SA30 File –Download SA30 File via ICS –Import file in SA30 Program –Check and unpack parts –Update Autoplus stock

42. Parts Consulting VT-T-2 Jan 2002 Page 41 SA30: Download SA30 Files Download in k:\bmwcomm\

43. Parts Consulting VT-T-2 Jan 2002 Page 42 Import File in SA30 Program

44. Parts Consulting VT-T-2 Jan 2002 Page 43 Check imported File

45. Parts Consulting VT-T-2 Jan 2002 Page 44 Print unpacking slip, check and bin parts

46. Parts Consulting VT-T-2 Jan 2002 Page 45 Update Autoplus with SA30 Records

47. Parts Consulting VT-T-2 Jan 2002 Page 46 Stock Management Basics Situation TODAY TOMORROW C NC ORDERING STOCK

48. Parts Consulting VT-T-2 Jan 2002 Page 47 Stock Management Targets – Philosophy 1st Priority best possible service „customer satisfaction“ 1st Priority best possible service „customer satisfaction“ 2nd Priority minimal costs 2nd Priority minimal costs 100% of parts on stockno stock, no warehouse Solution: optimised structure of stock economic ordering economic stock-administration Solution: optimised structure of stock economic ordering economic stock-administration

49. Parts Consulting VT-T-2 Jan 2002 Page 48  easy to avoid dead stock  needs less capital  no need of high investments  reduces variable costs (employment, rent etc)  supports customer satisfaction  guarantees good service level  guarantees instant sales  supports efficient use of workshop capacity  supports strong position against competitors Stock Management Conflicts Conflict HIGH STOCKLOW STOCK

50. Parts Consulting VT-T-2 Jan 2002 Page 49 Stock Management Stock Management Process define budget figures ABC classification inventory analysis generate figures of actual situation generate figures of actual situation comparison of budget and actual figures evaluate differences and reasons why define figures of planned situation define and realise actions CONTINUOUS PROCESS

51. Parts Consulting VT-T-2 Jan 2002 Page 50 Stock Structure Necessary Stock stock – NOT stored specified by market demand central warehousesubsidiary / importer dealer stored stock stored stock specified by market demand stock – NOT stored A-parts

52. Parts Consulting VT-T-2 Jan 2002 Page 51 Forecast and order calculation Elements of parts planning FORECAST Calculation of future demand SAFETY STOCK To balance : – Variation of demands – Variation of demands within reorder period – Forecasting errors MINIMUM (Reorder point) A part has to be ordered by reaching this stock quantity MAXIMUM Stock (pieces) which should be covered by ordering

53. Parts Consulting VT-T-2 Jan 2002 Page 52 Calculation of the Minimum Lead Time: (maximum Value by Differences) 1st April 15th May 30th May Order Customs Depot 6 weeks 2 weeks Σ = 4 weeks + 8 weeks + 4 weeks Reorder period Review period Lead Time Safety Stock Forecast = 20 pieces / 4 weeks (weighted average) + on actual stock : >= 20 >= 60 >= 80 Review period (time between two stock orders) + Lead time = Reorder period + Safety stock = MINIMUM

54. Parts Consulting VT-T-2 Jan 2002 Page 53 Steps of parts planning 1.Forecast Calculation (monthly) Determination of future demands (units) per month Weighted Sales (pieces): M-01 30% M-02 30% M-03 20% M-04 20% 5 4 3 7 1.5 1.2 0.6 1.4 4.7 = Forecast + + + 2.Calculation of MINIMUM On reaching this quantity, it has to be ordered Review period (months) + lead time (months) = reorder period (months) 1.0 1.5 2.5 + safety stock (months) 1.5 = 4.0 x forecast 4.7 = 18.8 (pieces) minimum

55. Parts Consulting VT-T-2 Jan 2002 Page 54 Steps of parts planning 3.Total Stock (pieces) Stock on hand + quantity on order - cust. backorder - cust. Reservation = Total Stock 5 30 0 8 4.Compare MINIMUM by reaching MIN it has to be ordered Total stock > MIN Total stock <=MIN No order Order Quantity Calculation (5. + 6.) 8 < 18.8 Order

56. Parts Consulting VT-T-2 Jan 2002 Page 55 Steps of parts planning 5.Maximum (Planning Stock) Quantity which should be covered Minimum (months)/Reorder Point + Reorder Horizon = MAX (months) * Forecast (pieces) = MAXIMUM (pieces) 4.0 + 2.0 = 6.0 * 4.7 = 28.2 MAX 6.Order proposal MAXIMUM (pieces) - total stock= order quantity (calc.) 28.2 8 20.2 Compare order quantity >= 75% factory packing quantity = order proposal 20.2 25

57. Parts Consulting VT-T-2 Jan 2002 Page 56 Stock Structure ABC Classification Sales (pieces) Line items 80% 95% 100% ABC (Lorenzkurve) A,B,C N X Z D Parts with a history longer than 12 months in our DMS, classification according to several criteria Exceptions, parts that belong to stock unattached by classification criteria, like coded parts (DC), service parts (DK) New parts with less than 12 months history in our DMS, classification (NA, NB, NC) according to criteria as above Parts which cannot be classified in groups A – N Parts which cannot be classified in groups A – N due to data error

58. Parts Consulting VT-T-2 Jan 2002 Page 57 Stock Management Basics Assortment Classification (Example)

59. Parts Consulting VT-T-2 Jan 2002 Page 58 ASSORTMENT D  parts classified as D must be analysed separately whether necessary or not ASSORTMENT C  parts classified as C (and NC) should not be stored  ordering of parts classified as C (NC) by rush order (or by VOR order on customer demand) ASSORTMENT A and B  parts classified as A or B (and NA or NB) must be stored (to maintain a high service degree and customer satisfaction)  ordering of parts classified as A or B (NA or NB) regularly by stock order Stock Structure ABC Classification - Summary G E N E R A L  define ABC classification for all line items  update classification every month  check classification of new parts (NA, NB, NC) after 12 months

60. Parts Consulting VT-T-2 Jan 2002 Page 59 Automatic Reorder Proposal from DMS

61. Parts Consulting VT-T-2 Jan 2002 Page 60 How to Analyse the Stock General Requirements for an accurate analysis : 1.Physical and System Quantities are equal 2.Parts and Prices are up to date 3.Parts Supersessions are carried out in the system

62. Parts Consulting VT-T-2 Jan 2002 Page 61 Stock Analysis Figures Service Degree (in the same time frame) Example:

63. Parts Consulting VT-T-2 Jan 2002 Page 62 Stock Analysis Figures Turnover Ratio (Same Time Frame/ Value by Cost Price) Increase of Turnover Ratio means: Increase of Turnover Decrease of Stock -value

64. Parts Consulting VT-T-2 Jan 2002 Page 63 Example - Turnover Ratio Your Warehouse has a yearly Turnover of 900,000 € at Cost Price. Because of stock management improvements you could reduce your 300,000 € stock value by 100,000 € BEFORE: AFTER:

65. Parts Consulting VT-T-2 Jan 2002 Page 64 Stock Figures Rush-order percentage Remark: This calculation has to be made for A, B and C Assortment seperately ! Target Values: A-Assortment < 0 – 5 % B-Assortment < 5- 25 % C-Assortment > 85 –100 % (in the same time frame)

66. Parts Consulting VT-T-2 Jan 2002 Page 65 Success Control Targets 1.Line items without stock 1.A- Parts 2.B- Parts 3.NA- Parts 4.NB- Parts 2.Line items undercoverage 1.A- Parts 2.B- Parts 3.NA- Parts 4.NB- Parts 3.Order Situation 1.Rush Order Percentage 2.Rush order Percentag A-Parts 4.Excess Stock Value 1.A- Parts 2.B- Parts 3.NA- Parts 4.NB- Parts Actual Target =<1.5 % =< 10 % =< 5 % =< 15% =< 10 % =< 20 % =< 10 % =< 25% =< 30 % = < 5 % =< 10 % =< 15 % =< 10 % =< 20%

67. Parts Consulting VT-T-2 Jan 2002 Page 66 Success Control Targets 5.C-Stock Value 1.Yearly increase of total stock value 6.NC-Stock Value 1.Percentage of NA+NB Value 2.Percentage of total value 7.Turnover Ratio Total 1.A- Parts 2.B- Parts 8.Availibilty Total 1.A- Parts 2.B- Parts Actual Target 2 – 3 % =< 20 % =< 2 % 3 - 4 >= 4 2.5 - 3 92 – 95 % =< 97% =< 90 %

68. Parts Consulting VT-T-2 Jan 2002 Page 67 Autoplus – Success Control Tool

69. Parts Consulting VT-T-2 Jan 2002 Page 68 AP 4.0 as Success Control Tool (Menu 4-6-1)

70. Parts Consulting VT-T-2 Jan 2002 Page 69 Charts using standard Office Application The Data can easily be transferred i.e. to MS- Excel to create own charts Examples:

71. Parts Consulting VT-T-2 Jan 2002 Page 70 Inventory (Stock taking) What is an Inventory ? A numeric and physical counting of all stock items Why making an inventory ? Match the stock data in the System with the physical stock

72. Parts Consulting VT-T-2 Jan 2002 Page 71 Preparation of an Inventory  Inform Dealer Organisation  Capacity Planing (Counting staff)  Prepare Listings  Prepare Warehouse (Cleaning etc.)  Inform Workshop (Reduce open jobs)

73. Parts Consulting VT-T-2 Jan 2002 Page 72 Inventory in Autoplus  Creation of a count List(s)  Activate count List(s)  Manual, physical counting  Input results in Autoplus  Printing results/differences  Integrate count results

74. Parts Consulting VT-T-2 Jan 2002 Page 73 Creation of Count List(s)

75. Parts Consulting VT-T-2 Jan 2002 Page 74 Activating, printing the count list(s)

76. Parts Consulting VT-T-2 Jan 2002 Page 75 Manual, physical counting Manual count of the articles and entering the results in the count list(s)

77. Parts Consulting VT-T-2 Jan 2002 Page 76 Input/Print of the count results and integration

78. Parts Consulting VT-T-2 Jan 2002 Page 77 Thank you very much for your attention Contact: